In an unprecedented move the government has halted the awarding of new tender contracts and feasibility studies for such tenders until a review of the current budget to re-prioritise capital projects is finalised.
This comes just hours after President Hage Geingob said in an interview on Voice of America’s Straight Talk Africa show that he was shocked the courts overruled his decision to halt a N$7 billion airport tender after it was discovered that procurement procedures were not followed.
Geingob, who is currently in the USA to, amongst others, attend the 71st session of the United Nations General Assembly, vowed to appeal that court decision when he returns to the country early next month.
However, in a letter written on Monday to the chairperson of the Tender Board of Namibia, Ericah Shafudah, Finance Minister Calle Schlettwein announced government’s new position on the awarding of new tenders.
“No tender awards should be made, until such a time that the financial year 2016/17 budget review and the re-prioritisation of capital projects are finalised,” explained Schlettwein.
“All new tenders for feasibility studies for capital projects and, or, surveys envisaged under the operational budget should be put on hold.”
“Accounting officers should ensure that these directives also apply to new capital projects that are funded under the national budget but fall under the execution mandate of the various public enterprises under the respective ministries and agencies.”
Schlettwein stressed that these measures are aimed at placing public finance on a sustainable path as government adjusts to a changing macro-fiscal environment.
He continued: “These measures are to be implemented with immediate effect.”
The minister’s directive means all public tenders that have not been awarded so far would be placed on ice, until such time that the moratorium on new tender awards is lifted.
Before he left for the UN, Geingob said the government has undertaken measures to curb wastage.
He said the government took action to stop any tender that it suspected was processed using some unethical method.
He further indicated that there would be forensic investigations in certain cases.
He was responding to questions on the negative economic outlook on Namibia issued by the international credit rating agency, Fitch Ratings, which maintained was not a result of carelessness by the current administration but a result of the slowdown of the global economy.
Government is currently on a collision course with teachers at public schools who are demanding a salary increment of eight percent, against government’s proposed five percent. Government says due to the current drought in the country and the slowdown of the global economy, it is not in a position to meet the eight percent demand, which would cost government an estimated N$600 million.