Namibia’s efforts to use public procurement to support local businesses continue to face major implementation challenges, with funding constraints, limited supplier capacity, delayed payments and weak compliance monitoring undermining the objectives of the Code of Good Practice, according to the Ministry of Finance.
Speaking at the Developmental and Empowerment Policies in Government Public Procurement event held at the Government Information Centre, the Ministry’s Deputy Director for Legal Support and Compliance, Amalia Shikongo, said both public institutions and local businesses face obstacles that limit the effectiveness of the procurement framework.
Shikongo said one of the biggest challenges is the limited understanding of the Code of Good Practice among some public entities, resulting in inconsistent implementation.
“There’s limited understanding of the code in some areas. That then affects their implementation or application of the code as it’s supposed to be,” she said.
She said financial constraints also make it difficult for public entities to prioritise local suppliers while balancing value for money and competitive pricing.
“They have got an issue of limited funding for public entities. It makes it difficult for them to balance value for money and competitive pricing with developmental objectives. Because of the limited funds, they will opt for competitive bidding rather than restricting it for local businesses,” Shikongo said.
She further identified delayed payments to suppliers as a major concern, warning that late settlement of invoices places unnecessary pressure on the cash flow of local businesses.
“Most of the times public entity bidders provide the services required, but then it takes longer for their invoices to be honoured. That affects bidders because at the end of the day it impacts their cash flow,” she said.
On the supply side, Shikongo said some local businesses lack the capacity to deliver the goods and services required by government, forcing public entities to open tenders to international competition.
“Sometimes there’s no capacity to supply or provide the services. If public entities find after market research that there’s not sufficient capacity within the local market, they will have to go for open advertised bidding, which is not just for Namibian suppliers but open for every bidder,” she said.
She also said many local businesses fail to participate in procurement opportunities despite being eligible.
“There is lack of awareness within the business community. Sometimes bids are advertised for identified categories, but even those categories themselves are not participating,” Shikongo said.
The ministry also acknowledged that limited staffing affects its ability to monitor compliance with procurement regulations nationwide.
“We need to do compliance and monitoring, but because we find ourselves limited in terms of personnel, we cannot carry out the required monitoring nationwide,” she said.
Speaking at the same event, Deputy Executive Director for the Procurement Policy Unit, Phineas Nsundano, said government’s procurement policies are designed to support local businesses without compromising quality or value for money.
“If you look at the Code of Good Practice, it specifically mentions that we are going to grant this advantage, but we will not compromise on quality, on standards and value for money,” Nsundano said.
He urged local businesses to use the procurement preferences to build sustainable and competitive enterprises rather than viewing them as guaranteed government support.
“The purpose of preference to local suppliers is for them to upscale themselves so that they can compete in the mainstream of the economy. But they should not take it as a form of government handout,” he said.
