New e-procurement system ‘will boost Kenya’s attraction to investors’ says Kenyatta

Out-Law News | 14 Aug 2014 | 4:04 pm | 1 min. read

Kenya’s president has said the launch of a nationwide electronic procurement and payment system is expected to “introduce transparency, accountability and eliminate abuse” of the country’s existing procurement and financial management process.

Uhuru Kenyatta, who launched the ‘e-procurement’ system on 13 August, said: “This will make Kenya a more attractive destination for investment. Indeed, we take great pride in being the first African country to automate end-to-end procurement and payment processes in a devolved government system.”  

Kenyatta called on civil servants “to embrace transparency, accountability and prudent use of public resources to ensure Kenyans receive quality services”.

In addition, Kenyatta announced that the National Treasury is establishing a “government digital payments portal that will enable Kenyans to make payments to the government electronically instead of using cash”.

Kenyatta said e-procurement will save “substantial financial resources” and help to instil confidence among taxpayers that they are “getting value for money”.

The procurement of goods and services constitute about 50% of the Kenyan government’s annual budget, Kenyatta said. E-procurement will strengthen relationships with suppliers by providing easy access to documentation and “simplify the bidding process” while providing “clear audit trails and identification of the originator of all transactions”.

E-procurement is part of the modernisation of public financial management systems by the National Treasury, which Kenyatta said included the establishment of a ‘treasury single account’ (TSA), from which all payments will be processed in line with financial sector reforms including the 2012 Public Financial Management Act.

Kenyatta said that with the TSA in place, payments to suppliers “will now be expedited since the National Treasury will have a better view of its overall cash position”.

Kenyatta told business leaders in Nairobi earlier this year that the government had begun to digitise all payments to make it easier for the private sector to get public services and to “make contracts more transparent”.

The International Monetary Fund (IMF) said in July 2014, following a mission to Kenya, that enhancing the government’s cash management system was “of paramount importance to avoid undue pressure on payment flows and interest rates, and reduce borrowing costs for the government and the private sector”.

The IMF said the establishment of the TSA was a “priority area” for strengthening capacity-building in public financial management. “Controlling the wage bill at both national and county level and improving the quality and efficiency of public spending will be essential to create fiscal space for well-targeted social programmes and increasing infrastructure investment,” the IMF said.