Sound public procurement practices have a direct bearing on whether an economy grows or stagnates. The prices, at which government acquires inputs and the quality of services delivered to it, are matters that require constant scrutiny.
Ideally, the state should procure goods and services at competitive prices, of appropriate quality, and within agreed timelines.
Conversely, when government secures its purchases at inflated prices, accepts compromised quality standards and tolerates persistent delivery delays, it ultimately spends more than it should merely to keep state capacity functional.
Poor procurement practices are, therefore, likely to manifest in rising public debt, higher domestic interest rates, currency instability, weak economic performance and a shrinking tax base, among other adverse outcomes.
In many countries, public procurement is also used to pursue secondary objectives that go beyond securing the most efficient supply chains for the state.
These may include promoting small and medium enterprises (SMEs), or advancing the participation of previously disadvantaged groups such as women, youth and persons living with disabilities.
In South Africa, for example, companies seeking to do business with the state are generally required to demonstrate support for historically disadvantaged persons.
The Broad-Based Black Economic Empowerment Act (Act 53 of 2003) provides the legislative framework that validates these secondary objectives in public procurement.
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The downside of such objectives, however, is that they are not always aligned with the goal of maintaining efficient procurement systems. Preferential procurement can result in the selection of less productive, less skilled or less efficient suppliers whose contracts are effectively guaranteed, regardless of underperformance.
Given these potentially competing objectives, it is critical for policymakers to strike a sustainable balance.
An excessive focus on any single objective risks producing undesirable political or economic consequences.
Contemplating SCMR in Zimbabwe
In the public sector, supply chain management review (SCMR) refers to the periodic evaluation of government supply chains to determine whether they are performing optimally and in the national interest, or whether they have become problematic.
Such reviews are designed to identify issues including inflated pricing, procurement-related corruption, delivery delays and substandard goods and services.
The timing and frequency of SCMRs are determined by policymakers. Reviews may be conducted at predictable intervals or announced more sporadically, depending on the preferences and discretion of the responsible public officials.
An SCMR typically covers all levels of government — central, provincial and municipal — as well as state-owned enterprises such as the Zimbabwe Electricity Supply Authority (Zesa), Zimbabwe National Water Authority (Zinwa) and Air Zimbabwe.
Auditors assess the prevailing characteristics of public procurement within these institutions, identifying strengths and weaknesses and proposing strategies to address deficiencies.
A review of progress made in implementing previously recommended reforms is also a common feature of SCMR programmes.
Involving all organs of the state is critical, given their substantial influence on public procurement outcomes.
In South Africa, for instance, central government accounts for only about 24% of total public expenditure on goods and services, while state-owned entities, provinces and municipalities together account for the remaining 76%. Comparable data for Zimbabwe is regrettably not readily available.
Once an SCMR is adopted, auditors must examine a range of issues. One key area is the compatibility of procurement-related administrative processes across different arms of the state.
This includes assessing whether various institutions operate under distinct, incompatible procurement requirements, forms, and procedures.
Such disparities are undesirable, as they increase administrative complexity, raise costs and consume time for suppliers seeking to serve multiple levels of government.
They also weaken oversight and complicate the enforcement of compliance standards.
The legal framework governing procurement at different levels of government must also be assessed. In South Africa, for example, there are approximately 80 legal instruments and regulations that govern public procurement, applying differently across state institutions.
The Municipal Finance Management Act, which regulates municipal procurement, does not apply to central government or state-owned entities. This fragmentation makes government-wide training and capacity-building more difficult and costly, as it requires a larger pool of instructors and greater coordination.
It can also result in different prices being paid across the public sector for identical goods and services supplied by the same vendors, driven by variations in compliance costs, inefficiencies, or corruption.
Such complexity is particularly burdensome for SMEs seeking to do business with the state. It creates uncertainty around procurement standards and complicates dispute resolution when contracts are contested.
SCMRs also assess the enforcement of existing procurement laws and procedures.
Weak enforcement creates fertile ground for repeated violations by suppliers and public officials alike.
Bribery, nepotism, fraud, theft, conflicts of interest, abuse of information, waste and the misuse of public resources are all more likely under such conditions. Ultimately, these losses are borne by the taxpayer, reinforcing the importance of SCMRs.
Another key focus area is the suitability and integration of procurement-related IT systems across government. Auditors assess whether procurement systems are compatible with other systems, such as budgeting and financial management platforms.
Where procurement processes remain largely manual, or where IT systems cover only early stages of procurement, opportunities for fraud, errors, delays and weak accountability increase.
Lack of system integration also undermines the aggregation and analysis of government-wide procurement data, resulting in missed opportunities for efficiency gains.
SCMRs should further examine the impact of preferential procurement policies aimed at promoting SMEs, women, and youth. Where such policies result in persistent delays, inflated costs, or unfulfilled contracts, these outcomes should be clearly reported.
Human resource capacity is another critical consideration. SCMRs assess whether personnel responsible for procurement possess adequate skills and training.
South Africa’s 2016 SCMR found that procurement capacity was generally scarce across the public sector, with municipalities being particularly under-capacitated.
Such challenges have led some countries to establish central purchasing bodies (CPBs), which conduct procurement on behalf of multiple public institutions.
By aggregating demand and centralising expertise, CPBs can generate savings, improve transparency, and make better use of limited skills.
Finally, SCMRs evaluate the transparency of procurement systems. Tender documents, evaluation committee minutes, contract awards and implementation reports should ideally be made public.
The adoption of open contracting data standards, which enable the publication of structured, reusable and machine-readable procurement data, can significantly enhance oversight.
Subject to confidentiality constraints, the disclosure of beneficial ownership information and the publication of lists identifying performing and non-performing contractors are also prudent measures.
Conclusion
It is desirable for the state to periodically implement government-wide SCMR programmes. Such reviews help identify strengths and weaknesses in public procurement systems, while setting new performance objectives for government supply chains.
The financial savings realised can be redirected toward reducing public debt, expanding social protection, or supporting other development priorities.
At the same time, SCMRs provide an opportunity to optimise preferential procurement policies so that they contribute meaningfully to broader economic growth.
Tutani is a political economy analyst. — [email protected]
