Opinion: Use Procurement As Policy Framework To Fight Poverty And Redistribute Wealth

By Julius Peter Ochen

The Uganda attainment of relative peace and steady advancement of democracy as sustainable form of governance, created a crisis of expectations among the majority of the previously disadvantaged population. In an effort to reduce not only socio-economic imbalances but also meet the high expectations among the majority of the population, government pledged itself to rapid socio-economic development by placing alleviation of poverty and inequality at the center of its development agenda. To correct the many inherited policies and practices, government undertook procurement reform that was espoused as having significant potential for socio-economic transformation.

Public procurement has been consistently used world over to further public policies in a wide range of fields. The role and potential of public procurement in delivering desired policy outcomes in society is now the 21st century wealth redistribution tool increasingly being adopted by capitalist in the low developed countries. Public procurement largely has strategic aspirations, and its potential to deliver on wider societal issues is attractive to policy makers, except for Uganda

This is because procurement in the public sector can play unique roles in the execution of democratic government especially if the benefit of public shillings trickles down to more households through participation in public procurement. Government procurement is and has, for example, often been used to promote aims which are, arguably, secondary to the primary aim of procurement in most developed countries. Examples include using procurement to promote social, industrial or environmental policies.

Unfortunately for Uganda case, government procurement system since enactment of the Public Procurement and Disposal of Public Asset Act in 2003, has largely favored large and established businesses which have made it very difficult for small enterprises to enter the procurement system.

To date, there is no specific policy framework in place to enhance the participation of new and small scale enterprises in public procurement. The procurement policy and guidelines are purely transactional with stringent requirements for participants. It’s therefore not surprising that over 50% of startup businesses dies before marking One year due to lack of stable business opportunities.

In 2006 and 2011 respectively, Parliament undertook major amendments of procurement Act, but this still felt short of addressing the participation of micro-enterprises in public procurement. World over, government spent over 20% of their GDP in public procurement. For Uganda case, of the 32 trillion shillings budget in the financial 2018/2019, more than 5 trillion is being spent through public procurement. How much of this trickle down to Ugandans in the lower end of the economy is something that should have already interested policy makers.

During the implementation of NAADS programs, government created village procurement committee at all Parish levels. This was perhaps intended to enhance participation of the ‘wanahinci’ in the spending of public funds but never to enable them tap the benefit of such public fund since requirement for bidders remained higher and stringent, disadvantaging the active poor at the tail end of the economy.


Ordinarily, micro procurement of certain threshold, say below 1 million shillings should simply require small enterprises with trading license and bank account to participate. But what is the current practice; one must have certificate of incorporation, certificate of TIN registration, Six months banks statements, Three years audit reports, trading license and many others; leave alone the cost of purchase and preparation of bid documents that are always submitted in multiple copies.

Sustainable economic development can only be achieved through inclusive participation of the population in driving economic factors of their community. By denying micro unit enterprises opportunity to participate in public procurement, the economic benefit of such participation is then confined to already establish enterprises. Something needs to be done urgently.

The Writer Works With Ministry Of Information, Communication Technology And National Guidance, And A Student Of Research And Public Policy Of Uganda Christian University – Mukono





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