Tag Archives: public procurement

Ethiopian Public Procurement Law applicable only to the private sector

“this Proclamation does not apply to contracts a public body enters into with another public body for the provision of goods, works, consultancy or other services at cost.”

The Ethiopian Federal Government Procurement and Property administration Proclamation No.649/2009 Article 3(2) (b)

In developing countries like Ethiopia, the provision of services to the citizen is one of the central functions of government. To fully realize it’s in providing services which meet the standard of the best quality, but at the same time with the minimum cost, the government in Ethiopia, uses the best mechanisms available, which may generally be categorized in to two. First, in areas where the private sector is considered to be at an infant stage, the government directly involves itself in the management and operation of the provision of services. The provision of electricity, telecommunication and water for instance, is under the exclusive control of government. Second, in areas which do not require direct involvement of the government, the provision of public services will be realized by involving the private sector for carrying out works and providing goods and services. Even in the second case, the government is not totally out of the picture. Public enterprises and other government business organizations equally participate in this process. Similarly, the direct provision of services by the government, to some extent allows the participation of the private sector. To a certain degree, the private sector plays a role in carrying out public works and providing goods and services in areas under the exclusive control of the government

Irrespective of the role played and the level of participation of the government or the private sector, the provision of the best quality of services with a minimum cost, requires an efficient and effective system of public procurement. “Public procurement is a central instrument to ensure an efficient management of public resources. Promoting good governance in public acquisition system aims at providing best value to its citizens through processes that are transparent and results-oriented”

Irrespective of variations in the existing political, economic and legal environment peculiar to a specific country, an efficient and effective system of public procurement is ultimately built upon four basic pillars: procurement laws and regulations, procurement workforce, procurement process and methods, and procurement organizational structure. Ideally, procurement laws and regulations should be clear, consistent, comprehensive, and flexible. (Khi V. Thai, procurement: concepts and practices, in International handbook of public procurement ed. Khi V. Thai p6-9)

Generally speaking, the regulatory framework of public procurement as tool in the formulation and implementation of an effective and efficient system of public procurement should be guide by some internationally accepted basic principles. These principles are: transparency, accountability, objectivity, fairness and non-discrimination.

The principle of transparency helps to attract a greater number of participation, thereby encouraging competitiveness. It also makes the whole procurement process open and fair, thus avoiding the possibility of favoritism and discrimination. Transparency also makes it easy for procuring entities and officials to be accountable. Most importantly, it is an effective tool to curb corruption.

The Ethiopian procurement law is still at an infant stage. In recent years, the Federal government has taken measures to revise the existing law, so as to make it responsive to the growth and expansion of the quantity and quality of provision of public services. Each year, a significant portion of public money is allocated as a result of  award of contracts for the construction of public works, supply of goods and provision of services.

Until 2005, there was no comprehensive procurement law at a national level. There were only few articles in the civil code regulating the procurement procedure. In 2005, the Federal government enacted a law providing a detailed procedure of Public Procurement (providing the procedures of Public Procurement and establishing its Supervisory Agency Proclamation No. 430/2005.) This law also establishes a federal agency empowered with regulating the procurement of works, goods  and services by Federal agencies. Another significant change introduced by this law was that it tried to embrace the basic principles of transparency, accountability, fairness and non-discrimination as its guiding principles.

After four years of the issuance of this law, it was revised and replaced by a new law (The Ethiopian Federal Government Procurement and Property administration Proclamation No.649/2009.) This second proclamation comes with more detailed and clear procedures. It has also widened its scope by providing for the regulation of public property, which was not dealt by the previous proclamation.

In addition to the legislative reforms taken by the legislative organ, the issuance of secondary legislation by the executive organ is also another significant development in the process of creating an efficient and effective legal framework. As a supplement to proclamation no. 649/2009, the Ministry of Finance and Economic Development issued a Federal Procurement Directive in June 2010. A month later, in July 2010, the Council of Ministers issued a regulation providing for public procurement and property disposal services establishment (regulation no. 181/2010)

Since procurement is not an exclusively federal matter, some regional states (e.g. Amhara regional state) including the Addis Ababa and Dire Dawa administrations have followed the footsteps of the federal government in devising their own procurement laws.

So far so good!

From the above brief assessment, you see only the positive side of Ethiopian procurement law. Yes it is true; efforts have been made to make the law clear, comprehensive and flexible. It is also true that the current law embraces basic principles of public procurement. But, it seems,  something big, something fundamental went wrong!

Just look into the scope of this law. According to article 3 of The Ethiopian Federal Government Procurement and Property administration Proclamation No.649/2009, the law is exclusively a federal law and its applicability is limited to Federal Government procurement and property administration. By way of exception article 3(2) (a) excludes procurement affecting national security or national defence. This is acceptable taking in to consideration the sensitive nature of such type of procurement and similar form of exclusions also exist in most jurisdictions. The exclusion also is not absolute because the type of procurement procedure is still to be decided by the Ministry of Finance and Economic development through consultation with relevant authorities.

Then comes article 3(2) (b). This article reads: “this Proclamation does not apply to contracts a public body enters into with another public body for the provision of goods, works, consultancy or other services at cost.” According to article 2 of sub article 6 of the proclamation, Public Body means any public body, which is partly or wholly financed by the Federal Government budget, higher education institutions and public institutions of like nature. So, public bodies are not subject to procurement procedures if they intend to participate in the provision of goods, works, consultancy or other services at cost. They will simply get awarded of a contract without competing with the private sector.  In effect, they will get preferential treatment. Doesn’t this then destroy the principle of fairness and non-discrimination? What is worse, no alternative procedure which ensures transparency and accountability, is devised for  contract of public works, goods and services if it is between two public bodies.

As a result, the procurement proclamation which professes to be rooted in the basic principles of transparency, accountability, fairness and non-discrimination, almost destroys itself by including such ‘suicidal provision.’ Remember, the government widely participates in every activity of undertakings related to carrying out public works, supply of goods and provision of services. When a public body gets a preferential treatment, it surely will not be competitive. This makes achieving the basic objectives of the procurement proclamation unattainable. The ultimate objective of any procurement legislation is the provision of the best quality of service with a minimum cost or to use the statement in the preamble of the proclamation, it is “the utilization of the large sum of public money spent on procurement in a manner that ensures greater economy and efficiency.” In the absence of competition, this is doomed to fail.

The proclamation seems to advance competition, but, as article 3(2)(b) of the proclamation has made it clear, public bodies are an exception to competition. Not only that, they are an exception to the principle of transparency, accountability, fairness and non-discrimination.

2009/10 (2002 E.C.) Council of Ministers Regulations

Regulation no. 160-2009 National Lottery Administration Re-establishment

Regulation no. 161-2009 Coffee Quality Control and Transaction

Regulation no. 162-2009 Irrigation Development Investment Incentives

Regulation no. 163-2009 Wildlife Development, Conservation and Utilization

Regulation no. 164-2009 Council of Ministers Income Tax (Amendment)

Regulation no, 165-2009 Ethiopian Postal Service Enterprise Establishment

Regulation no. 166-2009 Work Permit Fees (As Amended)

Regulation no. 167-2009 Federal Hospitals Administration        Corrigendum no. 8-2009

Regulation no. 168-2009 Registration and Administration of Charities and Societies

Regulation no 169-2009 Acess to Genetic Resources and Community Knowledge Communitynity Rights

Regulation no. 170-2009 Ethiopian Electric Power Corporation Re·Establishment

Regulation no. 171-2009 Financial Intelligence Establishment

Regulation no. 172-2009 Re-Organization of the Management of the National Bank of Ethiopia

Regulation no. 173-2009 Classification of Tourist Facilities

Regulation no. 174-2009 Catering and Tourim Training Center Establishment

Regulation no. 175-2009 Genet Hotel Enterprise Establishment

Regulation no. 176-2010 Ethiopian Meat and Dairy Technology Institute Establishment (Amendment)

Regulation no. 177-2010 lnfomtttion Technology Park Corporation Establishment

Regulation No. 178-2010 Sesame and White Beans Transaction

Regulation no. 179-2010 Army Foundation Establishment

Regulation no. 180-2010 Textile Industry Development Institute

Regulation no. 181-2010 Leather Industry Development Institute

Regulation no. 182-2010 Metal Industry Development Institute Establishment

Regulation no. 183-2010 Metal and Engineering Corporation Establishment

Regulation no. 184-2010 Public Procurement and Property Disposal Service Establishment

Regulation no. 185-2010 Defence Construction Enterprise Establishment

Regulation no. 186-2010 Defence Construction Materials Manufacturing Enterprise Establishment

Regulation no. 187-2010 Construction Design Enterprise Establishment

Regulation no. 188-2010 Repealing of the Regulation for the Implementation of African Peer

Regulation no. 189-2010 Ethiopian Food Medicine and Health Care Adminstration and Control Authority Establishment

Ethiopian Broadcasting Authority Directives

                             Directive No. 01/2008

WHEREAS, Commercial Radio Broadcasting Service is an alternative broadcasting service in providing education, entertainment, information to the public and it is found essential to develop and expand this service; and
WHEREAS, it is essential to ensure fair utilization of the limited radio wave wealth of the country by allocating Commercial Broadcasting Service equitably and ensuring fair competition; and
WHEREAS, it is essential to establish a system of controlling and monitoring the service in a transparent and accountable manner,
NOW, THEREFORE, this Directive is issued pursuant to Article 47 of Proclamation No. 533/2007.


Community Radio Broadcasting Service Directive No. 02/2008

Community Radio Broadcasting Service Directive

Whereas, a community Radio Broadcasting Service plays a significant role in fulfilling education, information and entertainment needs of a community which the commercial and government broadcasting service do not cover;

Whereas, it is necessary to expand and develop the service in order to fulfill the needs for information, education and entertainment of each nation, nationality, and people for our country being the home to various nations, nationalities and peoples;

Whereas, it necessitates the appropriate usage of the limited radio frequency resource that belongs to the people in common;

Now, therefore; in accordance with Article 47 of the Broadcasting proclamation No. 533/2007, it is hereby issued as follows:

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Broadcasting Service Grievance Handling Directive No 03/2008

Whereas, it is very important of the community participation in developing the broadcasting service to play in political, social, economic role, one of the participation indicators are providing the grievance on the broadcasters;

Whereas, it is essential to set the grievance handling procedure in order to provide the broadcasting service listener or viewers grievance and information about broadcasters and get the necessary decision;

Now, therefore; this directive in accordance with Article 47 of the broadcasting service proclamation No 533/2007 it is hereby issued.

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Subscription Broadcasting Service Directive No. 04/2009

Whereas, providing service of foreign broadcast programs with payment to the society is an option of fulfilling the need of information, entertainment and education to the society;

Whereas, it is essential to follow up and control this broadcasting service option in the manner of transparency and accountability;

Whereas, it is necessary to issue the license to the applicants, who need to provide service of foreign broadcasting service to customer, by ascertaining, checking their competency;

Now, therefore, in accordance with article 47 of the Broadcasting Service Proclamation No 533/2007 it is hereby issued.

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WHEREAS, to achieve better transparency, efficiency,  fairness and impartiality in public procurement and to enable the utilization of the large sum of public money spent on procurement in a manner that ensures greater economy and efficiency by addressing problems  encountered in the course of implementation of the proclamation determining the  procedures of public procurement of the Ethiopian Federal Governmemt and establishing the Supervisory Agency during the years in which it was enforce;

WHEREAS, it is necessary to ensure that an organization enabling the realization of the economic benefit and efficiency flowing from bulk purchase is in place;

WHEREAS, to ensure that public property  in which a significant amount of public money is invested, is utilized in such a manner as to enable the government device maximum benefit therefrom and modernize the administration thereof, it is necessary to introduce an integrated public property administration;

NOW, THEREFORE, in accordance with Article 55(1) of the Constitution of the Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follows:


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