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Black empowerment rule comes into effect

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By Rebecca Chimjeka:

James Chiutsi

Malawians wishing to do business with government can finally breathe a sigh of relief following a move by the Public Procurement and Disposal of Assets (PPDA) Authority to put into effect the piece of legislation which demands Capital Hill to acquire 60 percent of its procurement needs from indigenous black Malawians.

The matter has been outstanding since June 2017 when Parliament passed an addendum to the Public Procurement and Disposal of Public Assets Act, which forces government to buy a minimum of 60 percent of its procurement needs from black indigenous Malawians.

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The insertion of Clause 44 Subsection 10 of the Act was proposed by former Karonga Central member of Parliamnet Frank Mwenifumbo.

In a circular dated July 1 to all government departments and agencies including to the Chief Secretary to Government, PPDA director general Elias Hausi says all national competitive bidding of Requests for Quotation methods will have to follow the new regulations.

“In accordance withs.44 (10) of the Public Procurement and Disposal of Assets Act (No. 27 of 2017) which states that a procuring entity shall ensure prioritisation of all bids submitted to give preference to 60 percent indigenous black Malawians and 40 percent others for national competitive bidding, it has become necessary for the authority to issue these interim guidelines to ensure application of this provision. These interim guidelines shall take effect, immediately.

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“All indigenous black Malawians shall enjoy a margin of preference of up to 20 percent in all procurements carried out using National Competitive Bidding or Request for Quotations (RQF) method. This is provided that such procurements are determined to be of low complexity,” reads part of the circular.

It adds that for bidders to be considered for the margin of preference, they would be required to prove their business ownership by attaching to their bids or quotations, coloured copies of their Malawi National Identity Cards.

“All bids or quotations received shall be evaluated technically to ascertain compliance with technical specifications. Only those bids that meet minimum technical specifications shall proceed to financial evaluation stage. It is only at financial evaluation stage that the margin of preference will be applied.

“In order to facilitate participation of many black indigenous Malawians, PDEs shall ensure that lots packaged in such a manner as to make them attainable to Micro, Small and Medium Enterprises (SMEs),” Hausi says.

Indigenous Businesses Association of Malawi President Mike Mlombwa described the circular as long overdue.

“We have been waiting for such a circular since July 2017 when Parliament passed the insertion to the Act. We are happy that finally time has come for Malawians to easily do business with government.

“It is our prayer that the PPDA will be very strict on the use of national IDs so that the provision benefits indigenous black Malawians,” Mlombwa said.

Chamber for Small and Medium Business Associations President James Chiutsi said the coming into effect of the legislation is a welcome development saying the playing field has not been levelled since independence.

“It was very worrying that the implementation was taking long. But now our members are ready to reap the benefits of this Act.

“We, however, hope that more clarifications will be made on the procurement thresholds reserved for SMEs, just to ensure that there is clarity and that procurement entities don’t see any ambiguity,” Chiutsi said.

Despite living in political independence for 55 years, Malawians still languish in abject poverty as most business by government is controlled by foreigners.

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