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Give tenders to those who produce goods

By Mark Bichachi | February 19th 2020 at 12:00:00 GMT +0300

Finally, the government is paying up all pending bills. It will certainly increase cash flow and thereby spur economic growth. Paying businesspeople on time enables them to pay their employees and suppliers.

As someone who has suffered the agony of waiting for bills to be paid, I have learnt the hard way not to put my eggs in one basket. It is true that a diversified portfolio is what has kept many a business afloat in tough times. The fact is that if the government does not pay, most Kenyans will go broke.

You see, if most of our businesses depend on the government, then it means most of our businesses depend on taxes. As such we are simply taxing ourselves into prosperity. This statement is in itself an oxymoron. You can't take from the people to make tenderpreneurs rich. That is a dangerous thing, especially as the country embraces austerity measures.

SEE ALSO: Treasury to sanction county over pending bills

Austerity measures in a country where most of us depend on tenders will mean less and lower-value tenders. This will result in the same problem we are trying to fix; less money in the economy. Yet, the government remains the biggest business entity anywhere. Everyone fights to do business with government.

Easy business

And the more everyone seeks to trade with the government, the more the incentive for corruption so as to gain an advantage. It sucks in everyone. This is why some civil servants have been known to work only during the tendering time. They are there essentially to render service to those who wish to corrupt the process - the so-called tenderpreneurs.

Tenderprenuers are the bane of public tendering and business.

With help from the public official, the tenderpreneur ensures that the paperwork with the exaggerated costs is legally done. So you won't catch them.

SEE ALSO: Ministries face budget cuts over unpaid bills

Tenderpreneurs poison the business environment by promoting corruption and other underhand dealings to gain an advantage. This ends up inflating the cost of tendering both to the government and to the business. The net loser, though, is the average Kenyan who has to pay more for less every time a tender is floated.

Tenderpreneurship only benefits the few who can manipulate the process.

Tackling the menace of tenderpreneurship calls for practical solutions.

First we must ensure that all entities that trade with the government have at least 50 per cent of their revenues generated from other sources. This will force these entities to diversify their portfolio.

This will void the briefcase companies that exist only to tender. Indeed, it is true that these companies do nothing more than search on Google and quote prices. That does not constitute productivity and that should not be rewarded.

SEE ALSO: Government payments, support from CBK lift lenders’ liquidity

In the same regard, these businesses should manufacture the goods they seek to deliver. It is not right that most tenders are of direct benefit to factories in China, Turkey or Europe, while our youth remain jobless. We can’t have towels imported from China with our own money.

Research sector

Tendering companies must channel some percentage of their profits into research and development to foster innovation. Kenya's research sector is woefully underfunded and businesses will never invest in it unless they are forced to. Kenya, and Africa as a whole, is heavily reliant on research in the West to solve problems locally. We may be proud of M-Pesa but it is not Kenyan-owned and it also depends on telecommunication technology that is foreign.

Neither your phone nor the mast it is connected to are made in Kenya. This overdependence on Western technology ensures Kenya will forever export tonnes of coffee to compete with Germany, which is outputting 'tonnes' of technology.

It does not take a genius to figure out that innovation is what needs to happen for any nation to prosper. China, South Korea and Japan before them did not only industrialise, but they also innovated. Huawei, Samsung and Sony are companies that today are leading in technology sales and their turnover is in billions of dollars.

We must, therefore, begin to learn from the Asian giants. We must begin to innovate for ourselves. Today, China is leading the world into 5G technology. Will 6G come from us?

Tenderpreneurs should pay for research, sponsor a university or pay some funds into national research institutions. Such monies will lead to innovations that could make both the businesspeople and the country rich.

If Kenya is to change and become less corrupt, we do need to take a second look at tendering and government bills. Tenderpreneurship should mean more than flashy cars and selfies at clubs in Dubai. An awarded tender should mean more research and development, more jobs and more stable businesses.

Mr Bichachi is a communications consultant. [email protected]

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