The Malawi Institute of Procurement and Supply (Mips) has said Malawi could save about $650 million (about K1.1trillion) if ministries, departments and agencies embrace e-government procurement.
Mips Chief Executive Officer Feston Kaupa was speaking in Lilongwe on Wednesday during the 2024-25 pre-budget consultations meeting organised by Finance Minister Simplex Chithyola Banda.
E-government procurement is the use of information technology, especially the internet, by governments in conducting their procurement activities with suppliers for the acquisition of works, goods and consultancy services required by the public sector.
According to Kaupa, studies have been done on the benefits that government can reap from the adoption of e-government procurement.
He said the benefits include a price reduction of about 6.7 percent per annum.
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Kaupa said Mips is aware of the challenges Malawi is facing in adopting e-government procurement, including technical knowledge and the country’s ICT infrastructure.
He was, however, quick to note that the benefits of adopting e-government procurement far outway the costs.
“Much as we are talking of the economy being constrained, we can also achieve more savings by adopting e-government procurement,” Kaupa said.
The Mips boss added that Malawi could also benefit a lot from pooled procurement of goods and services, a task that used to be done by Central Government Stores in the past.
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“The benefits of pooled procurement are huge.
“But I think this can be expanded to other areas as well. Others would argue that this would take away business from small and medium businesses but the benefits that government would get by adopting pooled procurement for regularly used items are so huge,” Kaupa said.
He added that government could also save money by capacitating procurement committees so as to understand that lowest evaluated bids do not necessarily mean lowest priced bids.
According to Kaupa, the law says contracts should be given to lowest evaluated bids, which are not the same as lowest priced bids.
About 70 percent of Malawi’s total national budget goes towards procurement.
Finance Minister Simplex Chithyola Banda hailed contributions that stakeholders made during the meeting.
He said officials from the Ministry of Finance will scrutinise all the contributions made and see which ones should be incorporated in the 2024-25 budget.
