Hopes are high among stakeholders that the 60/40 provision in the Public Procurement and Disposal of Assets Act will be fully implemented following commencement of consultations on Administration of Preferential Treatment Regulations, 2020.
The provision stipulates that 60 percent of the government procurement contracts should be given to locally-owned indigenous businesses while the remaining 40 percent is given to foreign owned.
Although the PPD Act was passed three years ago, it has failed to materialise.
The consultations were launched in Blantyre for the Southern Region by the Ministry of Trade through the Public Procurement and Disposal of Assets Authority where it was also revealed that out K648 billion government procurements in the 2019/20 National Budget allocations, only 15 percent went to indigenous companies.
Speaking during the event, the Minister of Trade, Sosten Gwenge, said local businesses face stiff competition from foreign-owned companies during biding stage.
He added that a lot of guidelines have been put in place to make sure that the regulations benefit anyone including Small and Medium Business Enterprises (SMEs).
“The regulation have come up with a threshold on Small, Medium and Micro businesses and we will be doing an assessment and give them a colour coded license so that if someone has a green licence for example, we can take that one to bid in the list of goods and works that have been specifically reserved for such a licence,” Gwengwe said.
Indigenous Business Association of Malawi president, Mike Mlombwa, welcomed the development saying that it will go a long way in uplifting businesses of Malawians.
However, he asked the government to make sure that the people who are given businesses really own the businesses and are not just being used.
The Small and Medium Enterprises Development Institute spokesperson, Alinafe Mpoka, said SMEs should be patriotic.
Mpoka added that there should be stiff punishment for any macro business which will be found using SMEs to win businesses meant for them.
The regulations would be gazzeted before next meeting of Parliament.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.
- Inflation to average 27.1 percent in 2024 – The Times Group - March 1, 2024
- Airtel Africa, Cisco in digital drive deal – The Times Group - March 1, 2024
- National Bank of Malawi ranked best on regional ladder – The Times Group - March 1, 2024