By Lorenzo Iipinge
With the ushering of the 8th administration there has been a renewed call for public entities to encourage local participation in public procurement.
Recently, Prime Minister Elijah Ngurare directed all state-owned enterprises to stop importing furniture and give priority to those that are manufactured locally – the kind of pronouncements that often generate headlines but fade quietly in practice!
Once the rhetoric fades, the question that remains is whether the pronouncements by the Right Honourable Ngurare amount to genuine procurement reform or are merely declarations lacking in practical effect.
The reality is that such pronouncements are only credible when considered in the context of the Code of Good Practice on Preferences (“Code”) as issued in terms of section 71 and 72 of the Public Procurement Act, No. 15 of 2015 (as amended) (Public Procurement Act).
It may shock some, but the Code was actually already launched as far back as 2023 by the then Minister of Finance and Public Enterprises, Honourable Iipumbu Shiimi, with its intent of is to promote, facilitate and strengthen measures to implement empowerment and industrialisation policies.
Succinctly, the Code exists to ensure that public procurement is not just about buying goods and services. The Code moreover aims to ensure that state spending serves as a tool to stimulate local economic development.
Before we talk about the “preferences” mentioned in the Code, one basic rule to be remembered is that the Code does not operate as an automatic entitlement system for eligible bidders.
A bidder must claim such preference and provide the necessary supporting documentation to prove the claim for preference and must in any event comply with all legal, administrative and technical requirements before any preference can actually be applied by any public entity.
Exclusive Preference
The first form of preference established by the Code is exclusive preference, which serves as a “gatekeeper” for public contracts. By defining exactly who is permitted to bid, the Code ring-fences specific opportunities for targeted groups, including, women-owned enterprises, youth entrepreneurs, and businesses owned by previously disadvantaged persons.
The above categories are not mutually exclusive. A single bidder may qualify under multiple designations. For example, a business can be owned by a Namibian woman, who is a youth, as defined in the National Youth Council Act, No. 3 of 2009.
In such an instance, the bidder can bundle their “advantages” with each qualifying category attracting a specified percentage, which are then added together to determine a final “margin of preference”. While this cumulative benefit is subject to an overall cap of 10%, it provides a significant mechanical advantage during the bid evaluation phase.
It is however important to note that these targeted groups are not granted exclusive access to all public procurement. The “gatekeeper” only opens for specific, ring-fenced categories of public procurement which, when plainly viewed, relate to routine and high-volume needs. As defined in the Code, these include, but are not limited to:
- Goods: Office furniture, bottled water, and school uniforms.
- Services: Cleaning, security, and catering services.
- Works: Basic construction projects and maintenance.
It is safe to say that government’s focus on these specific areas is a practical and well-considered move. These are sectors, which we can all accept that, local suppliers are already active and capable of delivering without needing highly specialised technology or massive global supply chains.
National preference
The second form of preference under the Code is national preference where procurement is “opened up” to all bidders, including foreign and large corporate suppliers, with margins of preference being awarded at the evaluation stage through a preferential scoring system based on prescribed criteria with overall preference being limited to 10%.
The extent of the preference is determined by factors such as Namibian ownership and control, employment of Namibian citizens, and the use of locally produced inputs or materials. The specific weighting criteria differ depending on whether the procurement relates to goods, works, consultancy services or non-consultancy services. Simply, a consulting firm with foreign ownership but employs Namibian citizens still stands to benefit from the national preference system.
Ultimately, the Code reshapes public procurement through a combination of restricted access and preferential evaluation; certain contracts are reserved for defined local suppliers, while others remain open but still reward measurable Namibian “characteristics” through margins of preference. In both instances, the system is designed to tilt competitive outcomes in favour of domestic businesses or businesses with some form of Namibian linkages, truly signalling a shift towards procurement as a tool for economic development rather than simple purchasing.
With that, the real obscurity now lies in how the “margins of preference” are practically applied and how compliance with the Code is enforced. Part II decodes this.
*Lorenzo Iipinge is a Legal Officer at a state-owned enterprise and holder of Bachelor of Laws (Hons) Degree from the University of Namibia and Postgraduate Diploma in Compliance from the University of Johannesburg.
