What You Need to Know
Treasury Cabinet Secretary John Mbadi has announced that the electronic Government Procurement (eGP) system will be fully enforced in Kenya starting July 2023. This initiative aims to eliminate procurement loopholes that have led to significant public resource losses. The government plans to enhance transparency and accountability in procurement processes across its institutions.
Africa-Press – Kenya. There will be no exemptions for the electronic Government Procurement (eGP) system from the next financial year, Treasury Cabinet Secretary John Mbadi has confirmed.
Mbadi spoke during an interview on the evening of Sunday, April 12, where he was reiterated that the government would crack down on procurement loopholes , which have continued to drain public resources, effectively placing a strain on the treasury.
According to Mbadi, the government has already granted limited exemptions in the current financial year but will fully enforce the system beginning in July.
“If we can have a system like eGP, which is rolled out fully, we can close these procurement loopholes. I know we gave some exemptions this year, and I am saying this today, next financial year, there will be no exemptions for eGP,” Mbadi stated.
The electronic Government Procurement (eGP) system is a digital platform designed to manage procurement processes across government institutions, from tender advertisement and bidding to evaluation and payments. One of the core functions of the digital system was to boost transparency and accountability.
While the government has been rolling out the system as part of a broader public finance reforms, some institutions were granted exemptions which saw several government entities temporarily allowed to continue using manual procurement systems as they prepared for onboarding.
Mbadi noted that procurement remains one of the biggest areas where public funds are lost, particularly through inflated costs during the sourcing of goods and services.
He went on, “Where we waste money is actually on the procurement side, where instead of procuring a hall for Ksh15,000, you procure for Ksh50,000, and the surplus is shared in between.”
On the issue of inflated expenditure, Mbadi acknowledged that the government had limited room to cut costs, particularly due to pressures from the rising wage bill and salary demands.
“We have limited space in terms of cutting expenditure. You look at our wage bill. We are getting pressure from CBA, the security sector, and in terms of increasing salaries and the inflation index,” Mbadi said.
Mbadi further explained that cutting recurrent expenditure also presents challenges, warning that aggressive austerity measures could negatively affect businesses and economic activity.
Instead, the Treasury has opted to focus on rationalising development expenditure by reviewing projects that are not commercially viable.
Mbadi addressed the multiple supplementary budgets presented during the current financial year, admitting that he is not a supporter of frequent budget revisions.He, however, explained that this year’s supplementary budgets were necessitated by several factors, including omitted donor-funded projects and emerging salary obligations.
“Poor planning. We left out some donor-funded projects which we had to expand. Number two is Personnel Emoluments. Some CBAs had been suspended by court, and we became liable, and we had to pay,” Mbadi explained.
Meanwhile, The Treasury has expanded its domestic borrowing target by 52.29% or Sh570 billion in the current financial year ending June 30, signalling a further squeeze on households and businesses in the credit market.
The electronic Government Procurement (eGP) system was introduced as part of Kenya’s broader public finance reforms aimed at improving efficiency and transparency in government spending. Historically, procurement has been a significant area of concern, with numerous cases of inflated costs and mismanagement of public funds. The government’s decision to fully enforce the eGP system reflects a commitment to address these challenges and ensure better accountability in the use of public resources. This move comes amid ongoing pressures from rising wage bills and the need for fiscal discipline in managing public finances.
