Minister of Trade Sosten Gwengwe has disclosed that regulations for the administration of preferential treatment for small and medium enterprise (SME) in the country have been gazetted.
Gazetting of the regulation—an approval of amendments to Public Procurement and Disposal of Public Assets regulations— means 60 percent of public procurement will be reserved for individuals and companies owned by indiginous Malawians.
“I can confirm that the SME Order has been sent to government print for gazetting. This will help in bridging the gap between the rich and the poor,” Gwengwe said.
The minister said Tonseled government was creating a vibrant middle class as a backbone of the country’s economy. The SME Order also stipulates that government procuring agents should only buy from local SMEs in line with the gazetted list of goods and services.
Gwengwe said time had come for indigenous Malawians— women and youth, in particular— to meaningfully participate in government procurement processes.
The most recent past Public Procurement and Disposal of Public Assets (PPDPA) Director General Ellias Hausi said the regulations sought to operationalise Section 36(1) of the PPDPA.
The Act shall ensure prioritisation of all bids submitted to PPDPA and the preference of indigenous Malawians in 60 percent of competitive bidding transactions to other nationals, who shall have 40 percent of the cake, among other things. In the 2019/20 financial year, it was estimated that, out of K890 billion of the government’s procurement budget, only less than 15 percent was taken up by indigenous Malawians.
The PPDPA dates back to October 2017, when the then Karonga Central Constituency member of Parliament Frank Mwenefumbo proposed a clause in the PPDPA Bill that 40 percent of government business in the country should be given to indigenous Malawians. He said this would help create jobs and boost the economy of the country. Mwenefumbo also indicated that the creation of more jobs in the country depended on the number of indigenous Malawians that were able to do business with the government.
Parliament passed the bill in 2017.