Government asked to amend law on procurement

Published on 14/05/2009

By Benson Kathuri

The new public procurement law should be amended to give small and medium enterprises (SMEs) monopoly to supply certain goods and services.

Industrialisation Permanent Secretary John Lonyangapuo said the country should follow the Indian example, where SMEs provide more than 45 per cent of all goods and services to the Government.

The PS said the move would create tens of thousands of jobs, mainly targeting the youth.

He, however, said there was no enabling policy or provision in the procurement law to give the SMEs an edge over other suppliers.

“Should that happen tomorrow, thousands of our youths would be employed,” Lonyangapuo told a delegation of Indian Government officials and entrepreneurs visiting the country.

Imports budget

Currently, the Government spends more than Sh70 billion annually to buy goods and services from the private sector, through the public procurement process. However, most items including furniture, are mainly imported from Asia though they can be produced locally by SMEs.

He said the Government should also consider giving credit guarantee to enable commercial banks to give cheaper credit to local entrepreneurs.

Most entrepreneurs in the informal sector are unable to access capital to start and expand their business as most banks required security like title deeds in order to give credit. Parliament must, however, debate and approve these policy initiatives before they can be implemented.

Industrialisation Minister Henry Kosgey said the Government must address unemployment among the youth, poverty and inequality.

Distribution of wealth

“Vision 2030 identifies challenges that must be addressed in the short-term including the serious problem of youth unemployment, poverty and inequitable distribution of wealth,” he said.

The Indian delegation led by Dinesh Rai, the secretary in the ministry of small, micro and medium enterprises, promised to help the Kenya Industrial Estates to build capacity to help SMEs.

The partnership will seek to modernise and strengthen the sector. This will include builing of business incubator centres, which will be set up for demonstration and training on technology.

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