GRN aids local bidders with procurement contract expenses

Business Reporter

IN the face of growing reports that Namibian businesses and entrepreneurs are often excluded from multi-million-dollar procurement contracts due to their inability to undertake such substantial projects, the Namibian government has issued a new directive.

This directive will lead Public Enterprises and Financial institutions to provide financial support by paying for supplies or services eg. buying of bricks or hiring of trucks for local businesses that win state procurement contracts.

This week, the finance ministry came under fire after its review panel in the Ministry of Finance and Public Enterprises recommended awarding a N$340 million road construction tender to the Chinese company Zhong Mei Engineering Group. The company has been accused of failing to pay taxes on the N$1 billion it earned from public contracts.

The awarding of the Usakos and Karibib contract to Zhong Mei Engineers has been criticized for neglecting local contractors, who only received about 20% of the N$340 million road contract.

“It has come to my attention that a number of Namibian registered business enterprises encounter challenges and hindrances, particularly when accessing credit or funds to fulfill their contractual obligations after winning procurement contracts from public entities,” Finance Minister, Iipumbu Shiimi said.

He further added that, as a result, bidders are informed that public entities have been directed to allow these suppliers, contractors, and service providers to enter into cession agreements for the transfer of payments due to them as outlined in the procurement contracts.

“In addition, public entities have also been informed that they may be required to co-sign the cession agreements as creditors. This arrangement will ensure that public entities commit to paying any dues owed to the suppliers, contractors, or service providers into the nominated bank accounts stipulated in the cession agreements,” Shiimi said.

However, he noted that financial institutions will only enter into cession agreements for the transfer of payments owed to suppliers, contractors, or service providers based on their satisfactory performance of the procurement contracts.