African Development Bank’s Procurement Reform

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On October 14, 2015, the African Development Bank (AfDB) approved a major reform of its procurement framework. The Bank had undertaken the development of a more dynamic procurement framework to respond to changing circumstances, including the need to support ever more complex development objectives in its member countries, while maintaining its fiduciary standards. The AfDB’s rules and procedures, which govern the acquisition of goods, services and works by its member countries in Bank-financed projects, were perceived as too long, prescriptive, complicated and lacking the needed flexibility, particularly for complex procurement. Another factor prompting the reform was the need for better risk management and engagement with member countries on anti-corruption.

Similar to the World Bank’s recent procurement reform, the AfDB has made value for money a centerpiece of its revised framework, based on a fit-for-purpose approach to procurement. The reform will allow for full use of the procurement system of borrowers for certain contracts, customized methods and procedures for more complex procurement and third-party systems in other cases. The new policy will also encourage capacity building in the member countries and the use of e-procurement systems.

According to Vinay Sharma, Director of the AfDB’s Procurement and Fiduciary Services Department, the procurement reform will increase country ownership of Bank-financed projects and will give the AfDB “much greater legitimacy [in] working with borrowers in the improvement of their governance systems”. In addition, the new framework will increase the use of technology in African public procurement, which will lead to more transparent, effective and efficient use of resources. The Director expects the reform to “position the Bank to be the partner of choice for borrowers on the continent”.

The AfDB, which was established in 1963, is one of five multilateral development banks (MDBs), along with the World Bank, the Asian Development Bank, the European Bank for Reconstruction and Development and the Inter-American Development Bank. The significant harmonization of the procurement policies of the MDBs’ was one of the external emerging trends that contributed to the reform of the AfDB’s procurement policy.

Another factor in the reform was the increase in the use by member countries of procurement policies to support socio-economic objectives, including the promotion of local industries. The Bank found that current preferences have not been effective. As a consequence, the reform provides for consideration of other means of supporting national industries, such as set-asides, offsets, simplified bidding documents and procedures and suitable evaluation criteria.

The AfDB’s procurement reform will become effective on January 1, 2016.

Jean Heilman Grier

October 19, 2015

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