GOVERNANCE AND THE DIGITAL ECONOMY IN AFRICA TECHNICAL BACKGROUND PAPER SERIES Adoption of eGP in Africa GOVERNANCE AND THE DIGITAL ECONOMY IN AFRICA TECHNICAL BACKGROUND PAPER SERIES Adoption of eGP in Africa Hunt LaCascia, Justin Valentine, Travis Mells, Vineet Surapaneni, Kelly Flanagan, Maria Delfina Alcaide, and Michael Kramer Technical Background Paper: Adoption of eGP in Africa Copyright © 2022 The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org Disclaimer This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. Rights and Permissions The material in this work is subject to copyright. Any queries on rights and licenses, including subsidiary rights, should be addressed to: Office of the Publisher The World Bank 1818 H Street NW Washington, DC 20433 USA Fax: 202-522-2422 E-mail: pubrights@worldbank.org. Technical Background Paper: Adoption of eGP in Africa Acknowledgments This Background Note was prepared under the leadership of James Anderson (Lead Governance Specialist) and Hunt LaCascia (Senior Procurement Specialist, Governance Procurement), by a team including Justin Valentine (Valent – Procurement Consultant), Travis Mells (Valent – Procurement Consultant), Vineet Surapaneni (Valent – Procurement Consultant), Kelly Flanagan (Valent – Procurement Consultant), Maria Delfina Alcaide (Governance Data Consultant), and Michael Kramer (Fraud and Anti-Corruption Consultant). The report benefited from the inputs of the following World Bank colleagues who kindly agreed to serve as peer reviewers: Sunday Esene Osoba, Knut Leipold, Khalid Bin Anjum, Rajesh Kumar, Hiba Tahboub and Carey Kluttz from the Open Contracting Partnership. The Background Note benefited immensely from the participation, assistance, and insights from other experts. The team is especially grateful for the support of the Global Governance Practice (GGP), the and the prior work of governance, finance, and procurement colleagues in both the GGP and Operations Policy and Country Services (OPCS). We are grateful to Richard Crabbe for editorial services and Maria Lopez for cover design. iii Technical Background Paper: Adoption of eGP in Africa Abbreviations Abbreviation/Term Full Terminology/Definition ADB Asian Development Bank AFR-E East Africa AFR-W West Africa CapEx Capital Expenditure COTS Commercial-Off-The-Shelf CPB Central Purchasing Body CSR Corporate Social Responsibility EAP East Asia and Pacific ECA Europe and Central Asia eGP Electronic Government Procurement Electronic procurement, referring to the process of requisitioning, ordering, and eProcurement purchasing goods and services online FCV Fragility, Conflict, and Violence GDP Gross Domestic Product GNI Gross National Income GPPD World Bank's Global Public Procurement Database GUI Graphical User Interface HW Hardware IADB Inter-American Development Bank ICT Information and Communications Technology IDA International Development Association IFMIS Integrated Financial Management Information System IIAG Ibrahim Index of African Governance IOT Internet of Things KPI Key Performance Indicator LCC Lifecycle Costing LPTA Lowest Price Technically Acceptable LTA Long-Term Agreement iv Technical Background Paper: Adoption of eGP in Africa MAPS World Bank's Methodology for Assessing Procurement Systems MEAT Most Economically Advantageous Tender MENA Middle East and North Africa MPB Multilateral Development Bank NDI Non-Developmental Items OCDS Open Contracting Data Standard OECD Organisation for Economic Co-operation and Development OLC World Bank's Open Learning Campus OpEx Operating Expenditure P2P Purchase-to-Pay PaaS Platform-as-a-Service PFM Public Financial Management PII Personal Identifiable Information PPP Public-Private Partnership SaaS Software-as-a-Service SAR South Asia SLA Service-Level Agreement SME Small- and Medium-Sized Enterprise SPD Standard Procurement Document SSA Sub-Saharan Africa SW Software Total Cost of Ownership: an estimate of the total costs associated with a solution over TCO the whole of the operational life, including final disposal USD United States Dollars VfM Value for Money v Technical Background Paper: Adoption of eGP in Africa Table of Contents 1 Introduction ...................................................................................................................................1 2 eGP Definition and System Characteristics .......................................................................................3 2.1 eGP Business Models .................................................................................................................... 4 2.2 eGP System Acquisition Approach ................................................................................................ 5 3 Impacts of eGP on Governance ........................................................................................................8 4 Preconditions for Successful eGP Adoption ....................................................................................11 4.1 Electronic Government Procurement (eGP) Readiness Self-Assessment................................... 11 4.2 Open Contracting Playbook ........................................................................................................ 13 4.3 Methodology for Assessing Procurement Systems (MAPS) ....................................................... 14 5 eGP Adoption Progress Across Africa .............................................................................................17 6 Solutions and Recommendations for eGP Adoption .......................................................................24 7 Bibliography .................................................................................................................................30 ANNEX I: African Countries with Procurement Law Clauses by Procurement Practice Area ................. 32 ANNEX II: GPPD Key Terms and Definitions .......................................................................................33 List of Figures Figure I. E-Publication and Corruption Correlation 9 Figure II. E-Tendering and Corruption Correlation 10 Figure III. Readiness Self-Assessment Framework Output (Illustrative Example) 13 Figure IV. MAPS Analytical Framework 15 Figure V. Number of eGP System Implementations in Africa by Region / IDA / FCV Designation 18 Figure VI. African Countries with eGP Implementations 18 Figure VII. Representation of the Number of eGP Module Implementations in Africa by Country 19 Figure VIII. Pre-Award eGP Module Implementations by Region 20 Figure IX. Post-Award eGP Module Implementations by Region 21 Figure X. Supporting Feature eGP Module Implementations by Region 22 List of Tables Table I. African Countries with Current World Bank eGP and Data Analytics Efforts 2 Table II. eGP Modules and Definitions as Defined in the World Bank’s Global Public Procurement DD 4 Table III. Common eGP Business Models for Deployment and Operation 4 Table IV. SaaS/COTS/Custom Build System Acquisition Considerations 6 Table V. External and Internal Challenges to eGP Adoption – Lesotho Case Study 10 Table VI. eGP Readiness Self-Assessment Strategic Foundations and Components 12 Table VII. Four Components of the Open Contracting Reform Design and Management Framework 14 Table VIII. Potential eGP Implementation Stakeholder Groups 25 Table IX. eGP Funding Strategy Options 27 Table X. Critical Success Factors to eGP Implementation 28 vi Technical Background Paper: Adoption of eGP in Africa 1 Introduction The objective of this paper is to provide information on Electronic Government Procurement (eGP), a digital technology that can help public procurement organizations optimize spend, improve the performance of supplier markets, and minimize corruption in the procurement lifecycle. This paper aims to: ● Detail the impact of eGP on governance. ● Describe the preconditions that are required for successful eGP implementation. ● Provide country case studies that illustrate the benefits of eGP implementation. ● Review the progress of eGP adoption across Africa. ● Provide solutions and recommendations for countries that are interested in upgrading existing or introducing new eGP solutions and/or modules. Public procurement is central to the issue of government corruption, fraud, and abuse. Public procurement accounts for between 10 percent and 25 percent of public spending globally. Corruption in public procurement is estimated to consume between 10 percent and 30 percent of capital investment project costs, significantly inflating total costs and delivering less value to governments and the citizens they serve (World Bank 2020b). Misaligned or imprecise public procurement can be wasteful and lead to the acquisition of substandard goods and services that create unintended costs. By not meeting the actual needs of the procuring entities, misaligned goods and services eventually cost procuring entities more than initially estimated. Procuring entities may need to re-procure the same items, resulting in increased costs, in order to receive the goods and services that address their needs. As of March 2021, the World Bank was managing 47 projects with a value of over US$443.8 million aimed at the improvement of eGP and data analytics systems within client countries globally. Of these projects, 19 are located in Africa with a combined eGP value of US$ 250.4 million as shown in Table I below. Table I. African Countries with Current World Bank eGP and Data Analytics Efforts Total eGP Instrume Approval Closing Country Value Value Description of Intervention nt 1 FY FY $ Million $ Million P155121 – Economic Governance and Citizen Engagement Burkina Faso IPF 30.0 1.5 2016 2022 Project, development of e-Procurement. P149176 – Strengthening Institutional Capacity for Burundi IDA 22.0 1.0 2015 2021 Government Effectiveness Project. P151155 – Strengthening Public Sector Effectiveness and Cameroon IDA 31.0 7.0 2018 2023 Statistical Capacity Project. P164302 – Enhancing Government Effectiveness for Improved Cote d’Ivoire P4R 100.0 15.0 2019 2024 Public Services, e-Procurement implementation. P162904 – Djibouti Digital Transformation of Public Djibouti IPF 15.0 9.5 2018 2023 Administration, including e-Procurement component. P150922 – Public Financial Management Project, Ethiopia IPF 33.0 3.7 2016 2021 development of e-Procurement. Gambia IDA 35.0 3.0 2020 2025 P166695 – Gambia Fiscal Management Development Project. Ghana IPF 97.0 5.0 2013 2023 P144140 – E-Transform Project, piloting of e-Procurement. P157662 – Economic Governance Technical Assistance & Guinea IPF 22.0 1.0 2017 --- Capacity Building Additional Financing Project, development of e-Procurement tools. Kenya P4R 150.0 21.0 2018 2023 P161387 – Governance, development and rollout of e- 1 IPF = Investment Project Financing; P4R = Program-for-Results Financing; IDA = International Development Association Grant. 1 Technical Background Paper: Adoption of eGP in Africa Procurement P165000 – Integrated Public Financial Management Reform Liberia IDA 19.0 1.5 2019 2024 Project II, development of e-Procurement. P169413 – Digital Governance and Identification Madagascar IDA 140.0 56.0 2021 2024 Management System Project (PRODIGY). P160533 – Digital Malawi Program Phase I: Malawi Digital Malawi IPF 72.4 4.0 2017 2022 Foundations Project, feasibility study and piloting of e- Procurement. Mauritania IDA 24.8 5.2 2016 2022 P146804- Mauritania Public Sector Governance Project P158346 – Strengthening Agri-food Value Chains Program- Morocco P4R 200 10.0 2017 2023 for-Results, development and rollout of e-Procurement. P162009 – State Fiscal Transparency, Accountability, and Nigeria P4R 750.0 70.0 2018 2023 Sustainability Program-for-Results, rollout of e-Procurement, and use of open contracting standards. P163540 – Fiscal Governance and Institutions Project, rollout Nigeria IPF 125.0 28.0 2018 2023 of e-Procurement, and use of open contracting standards. P133424 – Public Financial Management Improvement and Sierra Leone IPF 32.0 3.0 2014 2021 Consolidation Project, e-Procurement introduction. P130871 – Regional Communications Infrastructure Program Uganda IPF 85.0 5.0 2015 2022 Phase 5, rollout of e-Procurement. Under a new policy commitment for IDA19, 2 the World Bank will support at least 50 percent (38 countries) of International Development Association (IDA) countries to implement eGP and conduct detailed procurement data analytics in order to increase the efficiency of public spending and mitigate corruption risks. Currently, 19 IDA countries have implemented some form of eGP; 19 additional countries will be engaged to implement eGP as part of the IDA19 policy commitment. 2 See http://ida.worldbank.org/replenishments/ida19. 2 Technical Background Paper: Adoption of eGP in Africa 2 eGP Definition and System Characteristics Definition of eGP: Electronic Government Procurement (eGP) is the use of a transactional information system by government institutions and other public sector organizations in conducting and managing their procurement activities and relationships with suppliers for the procurement of works, goods, and services required by the public sector. eGP provides the following public procurement benefits: ● Compliance with laws and standards leading to improved governance. ● Improvement in data collection, analysis, accounting, and monitoring, potentially leading to increased savings. ● Standardization of public procurement processes resulting in improved effectiveness. ● Automation and systematization of the procurement processes, leading to a reduction in processing times and administrative costs while adhering to internationally recognized best practice procurement principles such as Value for Money (VfM). ● Reduction of the prices of procured goods and services as a result of increased competition. ● Improvement in productivity while reducing fraud and corruption. ● Creation of economies of scale which improve local and regional economies. ● Increased participation of small and medium enterprises (SMEs) in the procurement process. ● Improved alignment with development goals as public expenditures are fairer and more balanced. ● Improved decision making-abilities by policy makers, regulators and practitioners. ● Enhanced environmental sustainability through reduction in the use of paper and polluting by means of transport. eGP should not be considered as a monolithic, single piece of technology, rather it should be considered as an aggregation of different types of procurement modules and functionalities that are fit-for-purpose designed to automate procurement processes. The following table provides the names and definitions of the most common eGP modules used in systems around the world. Table II. eGP Modules and Definitions as Defined in the World Bank’s Global Public Procurement Database (GPPD) 3 eGP Module Name eGP Module Definition eProcurement Plan Used to create and publish annual procurement plans at the beginning of each fiscal year. This module commonly allows bidders to be aware of the nature, timing, and volume of the planned public procurements. ePublishing/Notification Supports the publication of public procurement advertisements so that these are aka (eAdvertisement) available to any interested party. eTendering/eQuotation Provides online support for the submission of bids. eEvaluation/Awarding Supports the electronic opening (decryption) of bids, their partial or complete evaluation, and the notification of the outcome of the process. eReverse Auctions Provide an online real-time purchasing technique, enabling bidders to successively submit bids of lower value. This module features mechanisms for the automatic evaluation of bids. eContract Management Supports the management of contracts. This module commonly includes features to manage contract documentation, contract amendments, key performance indicators (KPIs), tasks, and deliverables. 3 See https://www.globalpublicprocurementdata.org/gppd/. 3 Technical Background Paper: Adoption of eGP in Africa eCatalogues Supports the creation of catalogue workspaces and the ability to browse electronic catalogues and create/ manage cart of items to procure. ePurchasing/P2P Support the preparation of requisitions and the management of purchase orders. Occasionally this module is also referred to as Purchase-to-Pay (P2P). eRegistration /Vendor The management of profiles, attestations and/or performance of suppliers, Management contractors, constructors, bidders, etc. conducting business with public sector entities. eComplaints eProcurement system module to receive and manage complaints. eSignature Advanced electronic certificate authentication: use of electronic certificates for supporting the user authentication process (i.e. login); OR Document electronic signing: use of electronic certificates for supporting the electronic sign off of documents uploaded onto the eProcurement system (e.g. bids); OR Action electronic signing: use of electronic certificates for supporting the electronic sign off of crucial actions performed within the context of the eProcurement system (e.g. contract award). eIntergrity module Detects bid irregularities for fraud and corruption via automated analytics and flags for procurement officers to investigate. eReporting/Business Uses data stored in the eGP system to produce data visualizations of procurement Intelligence metrics and key performance indicators (KPIs). While each country’s existing eGP infrastructure and deployment objectives are unique, it is recommended that countries proceed on an overall journey of increased automation incorporating the above modules into an eventual holistic eGP system. 2.1 eGP Business Models As country governments consider eGP implementations, an initial focus should be placed on the business model under which the system will be deployed and operate. Table III below references the most common business models used by governments to establish eGP systems. Table III. Common eGP Business Models for Deployment and Operation eGP Business Model eGP Business Model Description Government Owned and The government owns and operates the system, which is built by its own Operated information and communications technology (ICT) team. Alternatively, external partners may be used during the development or support phases of the project, but these partners have no rights to any part of the system. They are compensated for their services based on contracted fees. Government-Managed The system is operated, supported, and owned by a third-party partner, but the Service government retains ownership of all the data and support services, such as a user help desk and training. A dedicated unit within the government is responsible for managing the service, including the performance of the third-party partner as well as any other government departments that provide support services such as training. Public-Private Partnership The system is owned and operated by a third-party service provider. The intention (PPP) of this model is that at some time in the future, as specified in the agreement, the service will be transferred to the government. In the interim, the service provider is compensated either through a fixed monthly fee or transactional revenues based on the usage of the system. 4 Technical Background Paper: Adoption of eGP in Africa When implementing any of the above business models, the government is exclusively responsible for developing a plan that ensures sustainability. Long-term sustainability outcomes rely on political and leadership commitment to change management efforts, with a long-term outlook and focus on project and organizational sustainability. Operations may become sustainable through a combination of fixed capital funding and ongoing operational revenue generation. From a human resource perspective, a combination of government employees and specialist service providers can be used to ensure seamless operations. These providers may be involved in many aspects of the system, including technical operations and maintenance, end-user training, and end-user support through a dedicated help desk. Regular upgrades to the underlying technology platforms should be planned to ensure that the system continues to operate over a lifetime that exceeds that of the physical technology components. With the continued evolution of the Software-as-a-Service (SaaS) business model as a standard in the deployment of enterprise technology applications globally, it can be expected for the government-managed service business model to comprise a larger share of future eGP implementations. 2.2 eGP System Acquisition Approach Table IV below presents a summary of the key attributes of eGP system acquisition approaches, including implementation of a SaaS, commercial-off-the-shelf (COTS), or custom-built solution. Table IV. SaaS/COTS/Custom Build System Acquisition Considerations 4 Attribute SaaS COTS Custom Build Quality ● System based on an already ● System based on an already ● Software is owned by tested and used eGP tested and used eGP government. platform. platform. ● Software is built for purpose. ● Vendor has know-how on ● Vendor has know-how on ● System development know- analyzing, configuring, and analyzing, configuring, and how would be accumulated. rolling out eGP systems. rolling out eGP systems. ● Government may have ● Mature product as a ● Mature product as a difficulties in retaining foundation for a system that foundation for a system that Information and can be maintained virtually. can be maintained locally. Communications Technology ● Lower risk of technological ● Lower risk of technological (ICT) experts in its team since obsolescence. obsolescence. the private sector can offer ● Limited customization ● System may impose more competitive salaries. because of the other users of functional constraints as it is ● The possibility of risks to the the platform. already pre-built. success of system ● System may impose ● System may adopt standards development. functional constraints as it is that may be incompatible ● Lack of proven skills (offset already pre-built. with existing government by including foreign ● System may adopt standards systems and/or specialists). that may be incompatible infrastructure. ● Potential of fragmented with existing government ● Risk of lock-in by module developments between systems and/or vendors, mitigated by agencies unless carefully infrastructure. simplicity and serviceability managed by the steering ● Risk of lock-in by module of modules. committee. vendors, mitigated by ● Moderate risk of lock-in by simplicity and serviceability local developers (mitigated of module. by systems portability). 4 http://www.eprocurementtoolkit.org/documentation (E-Procurement Preparation) plus added case research. 5 Technical Background Paper: Adoption of eGP in Africa ● If government has proven, internal ICT capacity, high- quality product can be achieved; otherwise, in- house development may be risky. Time ● Core system functions are ● Core system functions are ● Time required for the already available in the already available in the development of from-scratch vendor’s eGP platform. vendor’s eGP platform. implementation can be ● Very short period required ● Relatively short period expected to be more than for relevant and practical required for relevant and for a COTS-based system. functionality to be practical functionality to be ● If government has proven operational. operational. internal ICT capacity, ● Vendor may require more ● Vendor may require more analysis, development, and time than in-house staff to time than in-house staff to rollout of the system can be understand the country- understand the country- achieved in reasonable time; specific requirements. specific requirements. otherwise, excessive time may be required. Cost ● Economies of scale created ● Purchase would only be for ● Maintenance/evolution of by a shared service often the functionality for which the system will be cost make it a very cost-effective there is capacity to utilize. efficient, since all required choice. ● Low initial implementation expertise related to the ● Purchase would only be for costs. system architecture will the functionality for which ● Low-risk system already exist. there is capacity to utilize. development and ● Government may need to ● Low initial implementation maintenance costs. make special financial costs. ● Government will be arrangements for retaining ● Low-risk system contractually bound to the experts for the development development and vendor and system; if a clear and maintenance/support of maintenance costs. financial arrangement is not the system. ● Government will be defined right from the start, contractually bound to the maintenance/evolution cost vendor and system; if a clear may be large. financial arrangement is not ● At the end of the contractual defined right from the start, term with the vendor, maintenance/evolution cost process for contracting and may be large. migrating to a new eGP ● At the end of the contractual system may be costly. term with the vendor, process for contracting and migrating to a new eGP system may be costly. Security ● Solution must be hosted in ● Solution can be hosted on- ● Solution can be hosted on- and vendor’s IT environment, premises or in domestic premises or in domestic Access which often resides outside cloud to control access and cloud to control access and of client country’s conform to national data conform to national data geographical borders, which privacy laws. privacy laws. may violate security or data privacy laws. 6 Technical Background Paper: Adoption of eGP in Africa A country’s current and forecasted IT technical capacity is also an important factor in considering different types of system acquisition models. SaaS systems are the easiest to manage over time as the majority of the system IP and support resides with the system provider or a third party service provider. COTS systems may require more in-house IT expertise to manage the system and any customizations. Custom-built systems require the most internal IT capacity as the systems must be maintained by the implementing agency and meet operational standards such as continuous uptime, which requires both technical expertise and personnel resources. Armed with a better understanding of eGP from both a definitional and system attribute perspective, governments can proceed to look at how eGP directly impacts governance and some of the challenges eGP implementers face due to that impact. 7 Technical Background Paper: Adoption of eGP in Africa 3 Impacts of eGP on Governance eGP has the potential to have a significant positive impact on governance. This impact can be attributed to the close relationship between procurement and governance. Public procurement accounts for between 10 percent and 25 percent of global public spending and, cumulatively, governments spend US$10 trillion on public contracts every year (World Bank 2020). eGP is, by definition, a vital component of how governance maintains legitimacy and delivers services to citizens. While public procurement varies among government levels and from country to country, human discretion is the primary means by which corruption enters the public procurement process. Existing tools and methods used in procurement provide a significant degree of responsibility and choice to procurement officials. In general, corruption in public procurement results in a substantial net-loss in terms of governance and the economy. Not only does corruption effectively increase the cost of procurement and capital projects and reduce return on investment, but it also has several immediate consequences that have secondary effects. For example, a corrupt procurement process around facility construction may result in inaccessible services that affect the citizens that the facility is intended to serve. Also, substandard infrastructure can increase the likelihood of accidents and cost governments more over the infrastructure’s lifetime in the form of higher maintenance and legal costs. eGP is a potential solution to decreasing the rate of corruption in public procurements. End-to-end eGP solutions can standardize procurement processes while simultaneously improving transparency around the process as a whole. The shift to digital platforms for procurement activities can also enable greater oversight and reveal trends via data that can readily be generated and analyzed, as opposed to languishing in a paper-only format. Real-time monitoring of the procurement process and transactions via eGP can also serve as a check against corruption or, at the very least, as a means to prevent corrupt practices from spreading and taking hold of the procurement process. It should be noted, however, that eGP is not a silver bullet against corruption. Studies indicate that eGP has variable impact on the rate of corruption (World Bank 2020). For example, it appears that increased prosecutions for corruption in public procurement do not necessarily lead to lower levels of corruption These studies, however, also indicate that eGP adoption in high-corruption locations is in its early stages. For example, the mixed impact of initiatives, such as the introduction of eGP in Albania and the expansion of external audits of public procurement in Chile, indicate that initial assessments are vital to ensuring that eGP has a significant, positive impact on decreasing the incidence of corruption in public procurement. The variation in impact can be attributed to the differences in governance environments, technical aspects of particular eGP systems, capacity of procurement staff, and resistance to reform. Additionally, the increase in transparency and other positive changes, such as a reduction in contract delays and an increase in supplier performance, demonstrate that eGP has substantial benefits even if its impact on corruption is less than expected. The data indicates varying impact on corruption in African countries between ePublishing/Notification, the marketing and advertising of bidding opportunities, and eTendering, the competition and procurement of goods and services via online platforms. Fifty-five African countries were surveyed to determine whether they are currently using ePublishing/Notification and/or eTendering functionality, or plan to do so in the next two years. The information received was compared to the prevailing perception of corruption in the respective country. The results are presented below in Figure I. 8 Technical Background Paper: Adoption of eGP in Africa Figure I. E-Publication and Corruption Correlation 100 90 (100=very clean; 0= highly corrupt) Corruption Perceptions Index 2020 80 70 60 50 40 30 20 10 0 -0.5 0 0.5 1 1.5 ePublishing implemented, under development or planned 2021 (1= Yes; 0= No) Further analysis showed that ePublishing/Notification is negatively and moderately correlated with the level of corruption, as measured by the Corruption Perceptions Index (CPI) 5 of Transparency International. The coefficient of correlation becomes stronger if the implementation of ePublishing/Notification is interacted with the level of accountability of the country, as measured by the Voice and Accountability indicator of the Worldwide Governance Indicators, 6 and the Checks and Balances indicator of the World Economic Forum. Figure II. E-Tendering and Corruption Correlation 100 90 Ease of Doing Business 2019 (100= highest; 0=lowest) 80 70 60 50 40 30 20 10 0 -0.5 0 0.5 1 1.5 eTendering implemented, under development or planned 2021 (1= Yes; 0=No) 5 Perceived levels of public sector corruption, according to experts and business people. 100 is very clean and 0 is highly corrupt. 6 See https://databank.worldbank.org/source/worldwide-governance-indicators. 9 Technical Background Paper: Adoption of eGP in Africa In contrast with ePublishing/Notification, eTendering is positively and moderately correlated with government efficiency, as measured by the Ease of Doing Business score of the World Bank Group. This contrast gives a strong indication that merely advertising procurement opportunities does not serve to address or combat corruption; and offering and managing tenders electronically does somewhat help to mitigate corruption in the public procurement process. Case Example – Barriers to eGP Entry in Lesotho Lesotho is one African country that has already implemented eGP systems. Lesotho’s experience with eGP highlights a number of challenges and lessons learned in the eGP context. Lesotho’s eGP story began in 2010, when the country first began implementing eGP solutions. The country has noted a number of external and internal challenges to eGP adoption, detailed in the table below. Table V. External and Internal Challenges to eGP Adoption – Lesotho Case Study 7 Challenge Type Description External • Lack of government / political leadership. Challenges • Legal and regulatory infrastructures and a lack of definitive government policy to implement eGP. • Unreliable IT infrastructure. • Socio-economic and cultural barriers. • Lack of awareness and training on eGP systems. Internal • Management support and leadership. Challenges • Lack of staff training / ICT expertise to conform with eGP-related regulations. • Resistance to change from employees. • Old IT infrastructure in need of upgrade. • High installation and operation costs for eGP system. • Minimal benefits. Despite these challenges, it was noted that eGP adoption had a number of perceived benefits, including automation, customer satisfaction, transparency, and accountability. Lesotho’s experience indicates that while parties easily conceive of the benefits that eGP represents, there are a number of challenges, both external and internal, that complicate eGP adoption. The common threads in terms of challenges are a lack of leadership and focus, lack of training or awareness, and aging IT infrastructure. 7“The Role of Institutional Pressures in the Adoption of e-Procurement in Public Institutions in Developing Countries: The Case of Lesotho,” The African Journal of Information Systems, Vol. 11, Issue 3. 10 Technical Background Paper: Adoption of eGP in Africa 4 Preconditions for Successful eGP Adoption Definitive policy and strategic frameworks that provide clear rules and guidelines to users drive effective use of eGP systems. Policy that mandates the use of eGP under defined conditions is the most effective for organizational buy-in and adoption. An integrated approach between whole-of-government and e- procurement initiatives can create a functionally coherent network of policies and standards, minimize competing priorities and objectives, and promote balanced benefits for all stakeholders. Governments face a number of key challenges during eGP implementation and adoption. According to studies conducted in Europe by consulting firms Accenture (Masson and Margot-Duclot 2018) and PricewaterhouseCoopers (PwC 2016), these challenges include the following: ● Excessive controls on spending and burdensome procurement procedures that can lead to delays that inhibit the adoption of new technologies. ● Governments may be locked into fixed, long-term contracts with obsolete technology systems that impede commercial partnerships with new software providers. ● There is a significant digital skills gap, as recent Accenture research has found that 59 percent of agencies in Europe have trouble finding people with the right skills to support innovation. ● Sales cycles are lengthy, as selling technology to government and the public sector requires sourcing leads, submitting proposals and organizational and financial data, and waiting for official and public comments and frequently delayed outcomes. Prior to implementing eGP, governments should conduct a readiness assessment. This is a systematic analysis of an organization’s ability to successfully implement transformational processes or change. It identifies the potential challenges that might arise when introducing new technology and accompanying procedures, structures, and processes within a current organizational context. As part of a readiness assessment, a gap analysis is performed to identify gaps or risk areas that should be addressed and remedied before or as part of the implementation plan. There are a number of readiness assessments that are oriented specifically towards eGP and which can be leveraged as existing resources to jump start governments on their eGP journey, including: ● Electronic Government Procurement (e-GP) Readiness Self-Assessment, jointly developed by the Asian Development Bank (ADB), Inter-American Development Bank (IADB), and the World Bank. ● Open Contracting Playbook, developed by the Open Contracting Partnership. ● Methodology for Assessing Procurement Systems (MAPS), jointly developed by the World Bank and the Organisation for Economic Co-operation and Development (OECD). A primer on each of these assessments is provided in the sections below. 4.1 Electronic Government Procurement (eGP) Readiness Self-Assessment The Electronic Government Procurement (e-GP) Readiness Self-Assessment, jointly developed by ADB, IADB, and the World Bank, is a fit-for-purpose readiness assessment that is “intended to assist a jurisdiction to conduct a high-level review of its procurement environment to determine its level of readiness to make a transition to eGP in a sustainable manner” (ADB, IADB, and World Bank 2004). A summary of the strategic foundations and accompanying components of the readiness assessment are 11 Technical Background Paper: Adoption of eGP in Africa presented below in Table VI. Each component is assessed on a scale from 1 (no readiness) to 4 (adequate degree of readiness). Table VI. eGP Readiness Self-Assessment Strategic Foundations and Components Strategic Foundations Components Institutional Capacity • Government Leadership: vision, sponsorship, resources, The capacity of government to set directions stakeholder and implementation support. and lead and resource the changes required. • Human Resource Management: education, skills development, expertise, and career development. Governance • Planning and Management: strategic planning and re- Putting in place the rules, management engineering of management protocols and processes. support, and performance monitoring and • Policy: setting intent and guidelines that can be evaluation to support eGP. consistently applied. • Legislation and Regulation: supporting rules and the external and internal monitoring of efficiency, performance, and compliance in relation to the total approach to eGP. Business Functionality and • Infrastructure and Web Services: ensuring the reasonable Standards access to and quality of e-services and their sustainable Sustainable infrastructure, support services, development and maintenance. and common standards developed to ensure • Standards: development of management, procurement, that accessible, integrated, and consistent and technical standards to ensure the consistency of the procurement services can be put in place. approach to eGP and interoperability across the systems involved. Third Party Involvement • Private Sector Integration: suppliers are enabled and have Ensuring that the private sector is able to incentives to participate in eGP. participate in eGP. Application of Technology • Systems: the planning, selection, development, Appropriate, integrated, sustainable, and implementation, and support of e-Procurement systems modifiable technology phased in to provide to provide tendering, contract management, and tendering, contract management, and purchasing services. purchasing services. The outputs of an eGP readiness assessment can take many forms. It should conform to a dashboard format that allows for decision-level data to be communicated effectively to leaders. Figure III below depicts a “traffic-light” dashboard assessment 8 of a technology organization showing the relative performance status of different areas of the organization. It is equally important to demonstrate to leaders what is working and to identify any gaps to be solved via the introduction of an eGP system. 8 Developed by Valent. See https://www.valentdc.com/. 12 Technical Background Paper: Adoption of eGP in Africa Figure III. Readiness Self-Assessment Framework Output (Illustrative Example) The dashboard-level output is created through the collection of both qualitative and quantitative data. An enterprise survey is a key tool that can be used to generate this type of data and is accurate and hyper- local to the situation being evaluated. It is also recommended to use an independent external consultant or consulting firm with expertise in readiness assessments to conduct the assessment to ensure an objective process. 4.2 Open Contracting Playbook Another example of a framework that provides guidance for eGP implementation and procurement reform is the Open Contracting Playbook, developed by the Open Contracting Partnership, a non-profit spun out of the World Bank in 2015. Open contracting “brings together open data and open government to make public contracting reforms more agile, more impactful, and more durable.” 9 The playbook sets out four key components of open contracting: ● Set reform goals and secure buy-in. ● Publish, use, and improve open contracting data. ● Improve stakeholder engagement and oversight. ● Measure, adapt, and institutionalize reforms. The playbook also includes an annex that helpfully expands on the components listed in above by suggesting additional outputs and outcomes and providing sample indicators that are important for measuring progress. In addition to the playbook, the Open Contracting Partnership has developed a number of tools 10 designed to facilitate eGP and open procurement implementation. These tools include the Open Contracting 9 See bit.ly/OCPlaybook-v09. 10 See more at https://www.open-contracting.org/resources/. 13 Technical Background Paper: Adoption of eGP in Africa Reform Design and Management Framework 11 and the Open Contracting Data Standard (OCDS). OCDS is the only international open standard for publishing data and documents at all stages of the contracting process, implemented by over 50 governments around the world. 12 OCDS can also be an important tool to support the development of transparent eGP systems, as well as key analyses. 13 The Open Contracting Reform Design and Management Framework is aimed at government reformers and provides a step-by- step guide to planning procurement reform and eGP implementation projects. The framework has four general components, each with various subcomponents and tools as show below in Table VII. Table VII. Four Components of the Open Contracting Reform Design and Management Framework Component Sub-Component Understanding your contracting challenge This initial step sets the stage and scope of ● Analyze your challenge. the reform project. ● Identify key goals and activities. Understanding your stakeholders ● Identify your stakeholders. This step is crucial to prioritize reform efforts ● Research stakeholder needs. at the local, regional, and national levels. ● Develop advocacy and communications strategies. Designing your reform strategy This step enables consideration of challenges, ● Prototype and test assumptions and activities. opportunities, stakeholder needs, and ● Plan reform activities. engagement strategies. Measuring your impact Ensuring the private sector is able to ● Monitor and evaluate progress. participate in eGP. A universal solution and path to eGP reform does not exist; rather there are multiple best practice frameworks that can be followed and customized for the unique context and solution of the implementing government. For example, a country without a current eGP system may be interested in a full readiness assessment that would lead to a ground up build of an eGP system, while a country with an existing eGP system may only be interested in implementing best data management practices and may therefore opt for using the Open Contracting Playbook to inform their reform program. 4.3 Methodology for Assessing Procurement Systems (MAPS) MAPS, 14 developed by a joint venture between the World Bank and OECD, is a universal tool that allows governing entities to improve their public procurement systems. MAPS enables governments to evaluate their economic and financial systems to maintain accountability, report to their constituents, identify opportunities for reform, and monitor progress. The MAPS tool assesses VfM, fairness, transparency, and governance as they relate to procurement systems. The MAPS Analytical Framework is composed of four thematic pillars: 11 See https://www.open-contracting.org/2020/04/29/open-contracting-reform-design-and-management-resources-new- guide/. 12 See https://www.open-contracting.org/data-standard/. 13 See https://www.open-contracting.org/2018/07/18/new-guidance-including-ocds-electronic-procurement-projects/. 14 See http://www.mapsinitiative.org/. 14 Technical Background Paper: Adoption of eGP in Africa 1. Legislative, Regulatory, and Policy Framework. 2. Institutional Framework and Management Capacity. 3. Procurement Operations and Market Practices. 4. Accountability, Integrity, and Transparency of the Public Procurement System. Figure IV. MAPS Analytical Framework Figure IV below illustrates the four pillars and related aspects. While a supplementary module that focuses on eGP is currently being developed, two of the pillars discuss eGP: Pillar 1 (Legal Regulator and Policy Framework) and Pillar 2 (Institutional Framework and Management Capacity). Pillar 1 – Legal, Regulatory, and Policy Framework 15 The first pillar recommends that the higher the level of sophistication of the desired technology, the more specific the legal framework and standards should be to ensure consistent application of the technology, provide for full access to the system, and ensure privacy and data security. According to the first pillar, the three items listed below should be contained in a legal framework that governs public procurement and eGP. ● Allow or mandate eGP solutions covering the procurement cycle; ● Ensure the use of tools and standards that provide full access to the system, taking into consideration privacy and data security concerns, and ● Require that interested parties be made aware of which components of the procurement process will be managed electronically. 15 See http://www.mapsinitiative.org/methodology/MAPS-pillar-I-legal-regulatory-policy-framework.pdf. 15 Technical Background Paper: Adoption of eGP in Africa The appearance of these items indicates that a government has set up the appropriate environment for eGP implementation and operation to be successful. Pillar 2 – Institutional Framework and Management Capacity 16 The second pillar focuses on the level of implementation. As a first step, the government should assess the level of eGP implementation and use in the relevant geographic area. A usual first step is for countries to establish centralized online portals to publish laws, regulations, and other relevant documentation concerning procurement. More advanced implementations may utilize supplier registries or transaction- based eGP systems, which support electronic procurement and contract implementation processes. The assessment criteria listed below can be used to determine whether eGP is implemented and managed effectively and efficiently. ● eGP is widely used at all levels of government. ● Government officials have the capacity to plan, develop, and manage eGP systems. ● Procurement staff is adequately skilled to support eGP systems. ● Suppliers participate in a public procurement market dominated by digital technology. ● A government that has yet to utilize eGP has adopted an eGP roadmap. Regardless of the readiness assessment selected, governments should complete an assessment and merge the assessment with any other initiatives related to procurement and governance. 16 See http://www.mapsinitiative.org/methodology/MAPS-pillar-II-institutional-framework-and-management-capacity.pdf. 16 Technical Background Paper: Adoption of eGP in Africa 5 eGP Adoption Progress Across Africa One-third of African countries do not have an eGP system. Half of the countries in North Africa do not have such a system, and within Sub-Saharan Africa (SSA), Middle Africa is lagging behind with respect to all the other subregions. While only one-third of the countries in Middle Africa have an eGP platform, the share of countries with an eGP platform in East, West, and Southern Africa ranges from 75 percent to 80 percent. Middle-income countries in Africa, especially upper middle-income countries, perform worse than low-income and high-income countries in Africa. While 70 percent of low-income countries and 100 percent of high-income countries have an eGP system, only 50 percent of upper middle-income countries have such a system. Sub-Saharan Africa and Middle East and North Africa are the regions with the weakest adoption of an eGP system. eGP Usage Usage of the eGP system in the vast majority of African countries is below 50 percent; only 22 percent of African countries with an eGP platform have usage rate above 50 percent. In North Africa, average usage is much higher than in Africa. In two-thirds of North African countries with an eGP system, the usage rate above 50 percent. Sub-Saharan Africa is by far the world region with the lowest usage rate of an eGP system, with only 18 percent of the countries with an eGP platform having usage rate above 50 percent. In contrast, in the world on average, 65 percent of countries with eGP systems have a usage rate above 50 percent. In the Middle East and North Africa, the next worst performer after Sub-Saharan Africa, 50 percent of the countries with eGP systems have a usage rate above 50 percent. Usage of eGP systems is higher in middle-income African countries than in low-income countries. However, usage in the two high- income African countries (Mauritius and Seychelles) is lower than in middle-income African countries on average. 17 eGP Adoption Statistics Based on information on eGP implementations within African countries, from data provided directly by governments as part of data collection into the World Bank’s GPPD, 18 the 29 African countries that have implemented eGP systems are listed in Table VIII below. Table VIII. African Countries with eGP Implementations African Countries with eGP Implementations Angola Ethiopia Rwanda Botswana Gabon Senegal Burkina Faso Ghana Seychelles Burundi Lesotho South Africa Cabo Verde Liberia Sudan Cameroon Madagascar Tanzania Congo, Dem. Rep. Mali Tunisia Côte d'Ivoire Mauritius Uganda Egypt, Arab Rep Morocco Zambia Niger Zimbabwe 17 The World Bank, Doing Business 2020. 18 See https://www.globalpublicprocurementdata.org. 17 Technical Background Paper: Adoption of eGP in Africa As previously discussed in this paper, under a new policy commitment for IDA19, 19 the World Bank will support at least 50 percent (38 countries) of International Development Association (IDA) countries to implement eGP and conduct detailed procurement data analytics in order to increase the efficiency of public spending and mitigate corruption risks. Figure V below presents the distribution of eGP systems across Africa. Figure V. Number of eGP System Implementations in Africa by Region/IDA/FCV Designation Of the 55 countries in Africa, 29 (53 percent) have implemented an eGP system; that lags the overall global average of 64 percent. The majority of eGP implementations (66 percent) are focused in East and West Sub-Saharan Africa. The following heat map (Figure VI) shows the number of eGP modules implemented within each of the 29 countries that have eGP systems. The countries with the most eGP modules implemented are Tanzania (10), Ghana (9), Zambia (9), Uganda (8), and Angola (7). 19 See http://ida.worldbank.org/replenishments/ida19. 18 Technical Background Paper: Adoption of eGP in Africa Figure VI. Representation of the Number of eGP Module Implementations in Africa by Country eGP Module Adoption for the Pre-awarding Phase The only eGP Module that is implemented in a majority of African countries (67%) is ePublishing/ Notification. All the other functions of the pre-awarding phase are implemented in a minority of African countries: eProcurement Plan (33%), eTendering (31%), eEvaluation/Awarding (25%) and eReverse Auction (21%), as presented below in Figure VII. A significant share of African countries have new eGP functions under development or planned for the next two years. This is especially the case for eProcurement Plan (16%), eTendering (16%), and eEvaluation/Awarding (14%). Nevertheless, the above- mentioned reforms appear to be concentrated in certain African subregions, namely South SSA, East SSA and West SSA. In Middle SSA, no country is undertaking eGP reforms in the pre-awarding phase, and in North Africa, reforms are envisaged only in eProcurement Plan. 19 Technical Background Paper: Adoption of eGP in Africa Figure VII. Pre-Award eGP Module Implementations by Region ePublishing/Notification eProcurement Plan eTendering eEvaluation/Awarding eReverse Auction 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percentage of African countries with function implemented Sub-Saharan Africa - South Sub-Saharan Africa - Middle Sub-Saharan Africa - West Sub-Saharan Africa - East North Africa eGP Module Adoption for the Post-awarding Phase The level of implementation of all the eGP modules of the post-awarding phase is lower than that of the functions of the pre-awarding phase. eCatalogues are implemented in just 18 percent of African countries, and the other post-awarding functions are implemented in a lower percentage of countries: 16 percent for eContract Management, 14 percent for ePurchasing, and 12 percent for eCatalogue Management. Encouragingly, a significant share of African countries have eGP modules of the post-awarding phase under development or planned for the next two years: 14 percent of countries for eCatalogues, 12 percent for eCatalogue Management, 11 percent for eContract Management and seven percent for ePurchasing (Figure VIII). 20 Technical Background Paper: Adoption of eGP in Africa Figure VIII. Post-Award eGP Module Implementations by Region eCatalogues eContract Management ePurchasing eCatalogue Management 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percentage of African countries with function implemented Sub-Saharan Africa - South Sub-Saharan Africa - Middle Sub-Saharan Africa - West Sub-Saharan Africa - East North Africa eGP Module Adoption for Supporting Features Some eGP supporting features are implemented in a higher share of countries than others. Tender Documents Downloadable/eProcurement Assessments, eRegistration, eComplaints and eVendor Management are implemented in more than 20 percent of African countries. Transverse Search, Monitoring and Reporting/BI, eSignature and Integrity Filters are implemented in less than 20 percent of the countries. Tender Documents Downloadable/eProcurement Assessments is the one with the highest implementation rate (40 percent), while Integrity Filters is the one with the lowest (5 percent) (Figure 3). A significant share of African countries have e-GP supporting features under development or planned in the next two years. This is the case for all the supporting features except Tender Documents Downloadable/E-Procurement Assessments—see Figure IX below. South SSA is by far the subregion where more countries have supporting features under development or planned in the next two years. In this subregion, 67 percent of countries are introducing reforms in e- Complaints, 50 percent in e-Vendor Management, 40 percent in e-Registration, 33 percent in e-Signature and 33 percent in Monitoring and Reporting/BI. The other subregions in SSA are also introducing reforms 21 Technical Background Paper: Adoption of eGP in Africa in supporting features, but in a much lower percentage of countries (Figure IX). For a majority of the eGP supporting features, the rate of implementation increases for higher income groups. However, in the upper-middle income countries in Africa, there is no implementation of eComplaints, eSignature and Integrity Filters, and in high income countries, there is no implementation eVendor Management, Monitoring and Reporting/BI and Integrity Filters. Figure IX. Supporting Feature eGP Module Implementations by Region eTender Docs/eAssessments eRegistration eComplaints eVendor Management Transverse Search Monitoring and Reporting/BI eSignature Integrity Filters 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percentage of African countries with function implemented Sub-Saharan Africa - South Sub-Saharan Africa - Middle Sub-Saharan Africa - West Sub-Saharan Africa - East North Africa The survey data of eGP module adoption in Africa shows there is clear room for improvement While it is encouraging to note there are a significant number of countries that plan to implement various eGP modules over the next two years, prior experience shows that countries will require continued support by the World Bank and other development partners to realize these goals regarding adoption. 22 Technical Background Paper: Adoption of eGP in Africa Case Study: eGP Implementation in Rwanda In 2013, the Rwandan government undertook a feasibility study, funded by the World Bank, on eGP implementation. At the time, Rwanda annually spent approximately US$800 million on the procurement of goods and services. The feasibility study “found that an [eGP] system in Rwanda could increase efficiency and transparency in public spending” (World Bank, 2018b). Subsequently, in 2014, the Rwandan government launched an initiative that focused on improving the country’s public financial management, which included US$12 million to establish and pilot an eGP system. To establish the eGP system, the government contracted directly with Africa Olleh Services Limited (AOS), a joint venture between the Rwandan government and Korea Telcom Corporation, one of the Republic of Korea’s largest telecoms. AOS developed a customized eGP system based on Korea’s model, with the World Bank providing technical support. In July 2016, the government piloted the system with several national ministries and agencies and district governments. Officials in pilot organizations were provided training on the eGP system, and the government conducted media campaigns across the country to advertise the system and encourage registration and participation. The pilot ran for one year, after which the system was expanded nationwide. By law, Rwandan public procuring entities (137 in total) are now required to use the eGP system. As of December 2017, 3,500 suppliers had been registered, 2,000 tenders advertised, and 685 contracts signed. The system is expected to impact procurement substantially: “strategic sourcing will become more predictive, transactional procurement will become more automated, and supplier/contract relationship management will become more proactive. All these enhancements will lead to more efficient public procurement.” In summary, key lessons learned from the experience of Rwanda include: ● Policy Mandate – successful eGP implementation would not have been possible without the establishment of a new regulatory body for procurement in 2008 and a new procurement-related law in 2007. ● Institutional Capacity – partnering with a Korean company to form a joint venture and seeking World Bank support enabled Rwanda to build capacity within its government to implement the eGP system. ● Technology – Rwanda’s eGP system was well-received, partly because the technology upon which it was based was straightforward and simple. The procurement website consisted of a single online portal, and the automated bid processing system streamlined processes, reduced the ability of bidders to use falsified documents, and improved efficiency for both potential vendors and government organizations. 23 Technical Background Paper: Adoption of eGP in Africa 6 Solutions and Recommendations for eGP Adoption A key challenge for a country’s eGP journey is knowing where to get started. The World Bank offers tools, resources, templates, and toolkits that are designed to address this issue, as well as to guide a country through their eGP journey. The common challenges encountered in any large-scale change management initiative involving technology – for example, requirements definition, stakeholder management, implementation, training, and adoption – are ever present in introducing or modifying an eGP system. In section 1.3 of this paper (Preconditions for Successful eGP Adoption), three independent readiness assessment resources were reviewed. This section provides further prescriptive recommendations on how to enhance eGP adoption and how to continuously improve its use. Recommendations for Specific Interventions to Promote eGP Adoption 1. Build eGP Knowledge Capacity. The World Bank has developed eProcurement online learning courses 20 aimed at introducing participants to the concepts and main objectives of eGP and state-of- the-art eProcurement systems, through five learning modules: i. eProcurement Preparation ii. eProcurement Basics iii. Advanced eProcurement iv. eProcurement Indicators v. Incorporating eProcurement into Public Financial Management (PFM) reforms Each module follows a common structure including videos, interactive features and assessments. Upon completion, participants can take an eProcurement certification test and obtain an “eProcurement Champion” certification. The learning platform is implemented within the World Bank’s Open Learning Campus (OLC) and is free and open to the public. Over 3,000 individuals have registered and taken the course, with 1,100 having passed the assessment and received certification. 2. Establish mandatory eGP use in National Procurement Policy. eGP is a proven technology that has been implemented in 127 developing countries 21 to bring efficiency and effectiveness to the public procurement process. National procurement law, regulations, and policy should allow for the creation and maintenance of eGP systems and any associated procurement digitization technologies such as electronic signature. This will lay a foundation of online technology for the implementation of procurement policies and the realization of best practice procurement principles such as VfM, fairness, and transparency. 3. Utilize the World Bank’s eProcurement Toolkit. 22 The World Bank developed an eProcurement Toolkit which contains the following documentation, templates, and resources to help client countries with their eGP journey. i. E-Procurement Preparation: Guides understanding of the concept of eGP and evaluating why and how to pursue the establishment of an eGP framework. This document includes the benefits that eGP offers and the actions that are needed to plan a path forward. 20 See www.eprocurementlearning.org. 21 Per the GPPD; see https://www.globalpublicprocurementdata.org. 22 See www.eprocurementlearning.org. 24 Technical Background Paper: Adoption of eGP in Africa ii. Open Contract Standard Implementation Methodology: Facilitates understanding of the concept of Open Contracting Data Standard (OCDS) and obtaining a high-level approach for its implementation in an eGP system. This document presents an overview of the OCDS and how it can be incorporated in a new or existing eGP system. iii. Public Procurement Indicators: Explains the concept of public procurement indicators for the assessment of the operation of eGP systems in relation to policy goals. This document presents different categories of public procurement indicators including calculation methodologies and benchmark targets. iv. Guidelines for Conducting Market Analysis for e-Procurement Systems: Defines core principles of a methodology for conducting a market analysis with a view to obtaining/implementing e- Procurement systems. This document presents why and how market analysis can be performed as a means to better understand the ICT market regarding available vendors and existing e- Procurement software products. 4. Utilize the Open Contracting Partnership Playbook. The playbook “brings together open data and open government to make public contracting reforms more agile, more impactful, and more durable” and discusses four key components of developing an eGP system. 5. Consider Change Management Efforts. Consideration should be made to modify management efforts as needed while eGP is being implemented. Change management activities include promoting, marketing, and increasing eGP adoption through effective communication with the various stakeholder groups. A key component of any change management plan is the development of strategies to address implementation risks and overcome workforce resistance to change. 6. Identify and Regularly Communicate with Key Stakeholders. Particular emphasis should be placed on engaging stakeholders early in the eGP implementation process. In complex transformation efforts, early engagement of stakeholders typically results in sustained stakeholder buy-in, and reduces potential conflict and delays as solutions roll out. Stakeholders may come from government, the private sector, or may be development partners as shown in Table IX below. Table IX. Potential eGP Implementation Stakeholder Groups Development Partner Government Stakeholders Private Sector Stakeholders Stakeholders • Public Procurement Oversight • Professional Procurement • Bilateral Partners Organization Associations • Multilateral Partners • Ministry of Finance • Large/Medium/Small Business • New/Emerging Donors • Legislative Body Community • Anti-Corruption Commission • Non-Profit Organizations • Audit Commission • Political Leaders • Procuring Entities • State-Owned Enterprises Once stakeholder groups have been identified, a communication plan should be developed to ensure that all relevant stakeholders are engaged and informed throughout the implementation process. The key activities for a comprehensive plan include: 25 Technical Background Paper: Adoption of eGP in Africa ● Conduct a rapid analysis to ensure that appropriate communications are created for all key stakeholders as illustrated in Figure X below, which depicts an example of stakeholder analysis output. Note that the axes on the chart can differ from what is presented – for example, “Influence” on the x-axis (horizontal) and “Importance” on the y-axis (vertical). ● Develop clear communication materials to inform and educate the various stakeholder groups, including supporting materials targeted for specific audiences. ● Engage country and procurement leadership and other key personnel to review the communication plan and other materials, including activities, message content, frequency and tone of messaging, and proposed methods/channels for communications delivery; incorporate feedback as necessary. ● Deploy communications via fact sheets, meetings, presentations, websites, blogs, social media posts, and other relevant mediums to maximize reach. Figure X. Example Stakeholder Analysis Output 7. Determine a sustainable eGP funding strategy. It is critical to long term program success to develop a sustainable funding strategy. Funding strategies must focus on both capital expenditure (CapEx) and operational expenditure (OpEx) costs over the full lifecycle of the eGP product. Funding strategies may include milestone-based payments to eGP Contractors during the time of product development and implementation, plus additional payments to the client country based on established Key Performance Indicators (KPIs) related to the outcome of the usage of the eGP product. Table IX below presents two key options to facilitate developing a funding strategy. 8. Create a Robust eGP Implementation Strategy. It is imperative that a detailed implementation plan be developed because the absence of a clear-cut strategy can lead to low eGP adoption and use. A dedicated team should lead the implementation effort, and it is highly recommended that an oversight committee of different stakeholders be established to oversee eGP implementation activities. The oversight committee should be accountable for the successful implementation of the eGP system and also be the final point to deal with escalation of issues that cannot be resolved within the implementation team. 26 Technical Background Paper: Adoption of eGP in Africa Table IX. eGP Funding Strategy Options Funding Option Description Traditional • Set amount of funding for the CapEx and OpEx costs over the lifecycle of the eGP Lending or Grant product/program. Funding. • Milestone based payments to the Contractor for development and implementation of the platform. • Payment phases may include (i) Requirements Definition, (ii) Pilot Implementation, (ii) Acceptance and Full – Rollout, (iv) Post-Implementation Support. Performance- • Funding based on the meeting of specific Key Performance Indicators (KPIs). based financing • Milestone based payments made to Contractor for development and implementation instrument, for of the platform. example, • Milestone payments made to client country based on Project outcome and KPI Program for achievement. Results (P4R). • KPI examples include (i) $ volume of transactions, (ii) count of transactions, (iii) # of registered suppliers on the platform, (iv) number of registered Government Agencies on the platform. 9. Develop and Implement a Pilot Program. Development and implementation of a small-scale pilot program should be a strong consideration. In the pilot program, the eGP system is rolled out in a controlled environment for a small set of users who are able to test the system and provide feedback that can be addressed prior to wider release of the system. Outside of the use and functionality of the eGP system, a pilot program is ideal for testing training materials and crafting effective communications and messaging campaigns. Complete Rollout of a typical eGP system takes at least six months, so it is imperative that a realistic timeline be set for implementation that includes contingencies for activities that may run longer than planned based on the pilot program. 10. Ensure Proper Training of the Workforce. Proper training of the user base will lead to greater adoption of an eGP system. Training should be tailored to user groups (e.g., procurement officers, suppliers, auditors) based on their system usage and responsibilities. Training should also be implemented using the appropriate forum – in person versus online – to maximize learning and reach. In-person trainings should be offered on a regular basis to quickly bring new users up to speed. 11. Provide Adequate Post-Implementation Technical Support. A technical support team should be established (or an organization contracted) to provide continuous help desk support and training for internal users and vendors and to conduct eGP system workshops for all user populations. The lack of adequate technical support may lead to lower adoption and usage rates among the target user population. Summary of Critical Success Factors In addition to the specific recommendations above to promote eGP option, the below critical success factors provide more granular insight for project teams to consider as they embark on the journey to implementing eGP solutions. 27 Technical Background Paper: Adoption of eGP in Africa Table X. Critical Success Factors to eGP Implementation Critical Success Factors Recommendation End-Users’ Uptake and • Keep end users involved and informed throughout the acquisition process. Training • Develop and regularly delivery comprehensive user training. • Engage and prepare the supplier base by developing a supplier adoption strategy and communication plan to include education and a demonstration of eGP Supplier Adoption benefits. • Ensure compliance with best practices regarding content and catalogue management. • Conduct a business process assessment to identify requirements and business Business Case and drivers. Project Management • Calculate and/or track return on investment, total cost of ownership, and risks. • Implement sending and receiving of real-time information to other information System Integration systems. • Drive electronic commerce with suppliers. Security and • Develop system security requirements including authentication, authorization, Authentication and confidentiality. • Improve data and process transparency which may lead to decreased corruption Re-engineering the • Automate invoice payment and reconciliation. Process • Develop and drive compliance with purchasing procedures and standards. • Develop goals and targets that can be tracked using Key Performance Indicators Performance (KPIs). Measurement • Conduct a baseline measurement and consistently evaluate to monitor progress and improvement. • Identify and onboard a management sponsor to support the project Top Management • Consider formation of a steering committee for feedback and to advocate for Support organizational change. • Identify and actively manage key stakeholders. Change Management • Conduct an e-Procurement impact assessment to identify potential barriers to implementation. • Utilize sound procurement practices with a focus on opportunities for e-Procurement aggregation. Implementation • Develop a consistent approach to procurement relationships with industry and Strategy small businesses. • Develop and adhere to technical, content, and procedural standards Technology Standards • Focus on interoperability requirements. An Example of an eGP Action Plan Timeline A government considering the transition to, or management of, an eGP system should first perform a MAPS assessment, described earlier this paper. A MAPS assessment will simultaneously provide the government with a comprehensive understanding of its current procurement systems and inform the government about whether and how effectively eGP systems are currently being used. By identifying those areas in which existing eGP systems are deficient or suboptimally deployed, the assessment provides a roadmap that leads to the improvement of the effectiveness and efficiency of current eGP systems and assists with the steps necessary for deployment new eGP systems at all levels of governance. 28 Technical Background Paper: Adoption of eGP in Africa In the absence of the ability to perform a MAPS Assessment, or in the case one has already been performed, it is recommended that the following nine (9) high level steps (described in detail in the section above) be carried out over a twelve to eighteen month period to effect an eGP Implementation Plan in a comprehensive and timely manner. Figure XII. Roadmap for the Deployment of a New eGP System (Illustrative Example) 29 Technical Background Paper: Adoption of eGP in Africa 7 Bibliography Asian Development Bank (ADB), Inter-American Development Bank (IADB), and World Bank. 2004. 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World Economic Forum. 2019. “Executive Opinion Survey 2019.” Geneva: World Economic Forum. 31 Technical Background Paper: Adoption of eGP in Africa ANNEX I: African Countries with Procurement Law Clauses by Procurement Practice Area High Income Countries – GNI per capita of $12,236 or more (2018) Sustainabilit Region Country TCO LCC VfM MEAT y Middle East and North Africa Malta X X Sub-Saharan Africa Mauritius X X X Seychelles X X X Upper-Middle Income Countries – GNI per capita range of $3,956 – $12,235 (2018) Sustainabilit Region Country TCO LCC VfM MEAT y Sub-Saharan Africa Botswana X Namibia X X South Africa X Lower-Middle Income Countries – GNI per capita range of $1,006 – $3,955 (2018) Sustainabilit Region Country TCO LCC VfM MEAT y Middle East and North Africa Tunisia X X Sub-Saharan Africa Angola X X X X Cabo Verde X X X Cameroon X Ghana X X X X X Kenya X X X Kingdom of Eswatini X X X X Lesotho X X Nigeria X X Zambia X X X Zimbabwe X X Low Income Countries – GNI per capita of $1,005 or less (2018) Sustainabilit Region Country TCO LCC VfM MEAT y Sub-Saharan Africa Benin X Ethiopia X X X Liberia X X Madagascar X Malawi X X X Mozambique X X X Rwanda X Sierra Leone X X Somalia X X X South Sudan X X Tanzania X X X Uganda X X X Source: GPPD 32 Technical Background Paper: Adoption of eGP in Africa ANNEX II: GPPD Key Terms and Definitions Term Definition Gross National Income GNI measures the total domestic and foreign value added claimed by residents and comprises GDP plus (in USD) net receipts of primary income (compensation of employees and property income) from nonresident sources. Gross Domestic Product Gross Domestic Product (GDP) is a broad measurement of a nation’s overall economic activity. GDP is the (GDP) monetary value of all the finished goods and services produced within a country's borders in a specific time period. Public Procurement Agency The government agency that is responsible for establishing a national public procurement policy and overseeing its implementation among all public sector entities. It occasionally holds the power to approve contract awards of large value. Central Purchasing Body A central purchasing body is a contracting authority that acquires goods or services intended for one or (CPB) more contracting authorities or concludes framework agreements for works, goods or services intended for one or more contracting authorities. Region covered by the CPB: National: covers whole country. - National* Regional: covers large geographic region of the country. - Regional* Local: covers small geographical region of the country (e.g. municipalities). - Local* Total Cost of Ownership TCO calculates the complete cost from purchase to disposal including expected costs to be incurred during (TCO) the lifetime of the product, such as service, repair, and insurance. Life Cycle Costing (LLC) LLC is the sum of all recurring and one-time (non-recurring) costs over the full life span or a specified period of a good, service, structure, or system. In includes purchase price, installation cost, operating costs, maintenance and upgrade costs, and remaining (residual or salvage) value at the end of ownership or its useful life. Value for Money (VfM) VfM should not be calculated solely on cost, but also on the efficiency and effectiveness of the purchase. Most Economically Bid evaluation process through which the successful bid is ascertained on the basis of combining technical Advantageous Tender and financial characteristics of the bids. (MEAT) Sustainability Sustainable procurement is the adoption and integration of Corporate Social Responsibility (CSR) principles into your procurement processes and decisions while also ensuring, they meet the requirements of your company and its stakeholders. The 6 core subjects listed by ISO 26000 are: human rights, labor practices, the environment, fair operating practices, consumer issues, community involvement and development. SMEs & Micro, Small And An enterprise which employs a small number of employees (for example, fewer than 250 persons) and has Medium-Sized Enterprise a small annual turnover or balance sheet (e.g., not exceeding USD 50 million). (SME) Bid (submission) Technical and financial offer of a private sector entity for a specific public procurement competition. Complaint Expression of objection against a decision, outcome or procedure of a public procurement competition. Standstill Period Period starting from the moment bidders of a competition are informed of its results, during which they are allowed to express their objections on such results. Procuring entities cannot proceed in signing contracts with the winning bidder until this period elapses and all expressed complaints are resolved. Goods Objects of every kind and description including raw materials, products and equipment and objects in solid, liquid or gaseous form, and electricity, as well as services incidental to the supply of the goods if the value of those incidental services does not exceed that of the goods themselves. Works All works associated with the construction, reconstruction, demolition, repair or renovation of a building, structure or works, such as site preparation, excavation, erection, building, installation of equipment or materials, decoration and finishing, as well as services incidental to construction such as drilling, mapping, satellite photography, seismic investigations and similar services provided pursuant to the procurement contract, if the value of those services does not exceed that of the construction itself. Services Services of intellectual and consulting nature and any other services not covered by the terms “goods” and “works.” Bid Validity Period The period during which the bids submitted for a public procurement competition remain valid. Contract Award The result of a public procurement competition, in terms of winning bidder(s) and contract budget. Disclosure threshold Disclosure of contract awards is subject to a minimum budget threshold below which disclosure is not required. Tender threshold Disclosure of tenders is subject to a minimum threshold below which disclosure is not required. Advertisement Notice by which a procuring agency announces the commencement of a public procurement competition. 33 Technical Background Paper: Adoption of eGP in Africa Direct Contract Public procurement method whose main distinct feature is the absence of competition, since the invitation to present a bid is addressed only to one bidder. eProcurement system The electronic platform used to manage various aspects of the public procurement process (e.g. advertisements). eProcurement functionalities -eProcurement Plan: eProcurement system module to create and publish annual procurement plans at the supported beginning of each fiscal year. This module commonly allows bidders to be aware of the nature, timing, and -- eProcurement Plan volume of the planned public procurements. -- ePublishing/Notification -e-Publishing/Notification: eProcurement system module to support the publication of public procurement -- eTendering/eQuotation advertisements so that these are available to any interested party. -- eEvaluation/Awarding -eTendering / eQuotation: eProcurement system module to provide online support for the submission of -- eReverse Auctions bids. -- eContract Management -eEvaluation/e-Awarding: eProcurement system module to support the electronic opening (decryption) of -- eCatalogues bids, their partial or complete evaluation, and the notification of the outcome of the process. -- ePurchasing/P2P -eReverse Auction: eProcurement system module to provide an online real-time purchasing technique, -- Vendor Management enabling bidders to successively submit bids of lower value. This module features mechanisms for the -- eComplaints automatic evaluation of bids. -eContract Management: eProcurement system module to support the management of contracts. This module commonly includes features to manage contract documentation, contract amendments, key performance indicators (KPIs), tasks, and deliverables. -eCatalogue: eProcurement system module to support the creation of catalogue workspaces and the ability to browse electronic catalogues and create/ manage cart of items to procure. -ePurchasing: eProcurement system module to support the preparation of requisitions and the management of purchase orders. Occasionally this module is also referred to as Purchase-to-Pay (P2P) -Vendor Management: The management of profiles, attestations and/or performance of suppliers, contractors, constructors, bidders, etc. conducting business with public sector entities. -eComplaints: eProcurement system module to receive and manage complaints. eSignature functionalities Functionalities: -- Advanced electronic -Advanced electronic certificate authentication: use of electronic certificates for supporting the user certificate authentication authentication process (i.e. login). -- Document electronic -Document electronic signing: use of electronic certificates for supporting the electronic sign off of signing documents uploaded onto the eProcurement system (e.g. bids). -- Action electronic signing -Action electronic signing: use of electronic certificates for supporting the electronic sign off of crucial actions performed within the context of the eProcurement system (for example, contract award). Commercial Off the Shelf Non-developmental items (NDI) sold in the commercial marketplace; in the context of public procurement (COTS) this term is usually relevant for COTS eProcurement systems (i.e. systems based on platforms developed by private sector entities). Business model for Business model for eProcurement: eProcurement -Government owned and operated: eProcurement system owned and operated by the government, which -- Government owned and is built by its own ICT team. Alternatively, external partners may be consulted during the development or operated the support phases of the project, but these partners have no rights to any part of the system. -- Government-managed -Government-managed service: eProcurement system owned, operated, and supported by a third-party service partner; the government retains ownership of all hosted data and all supporting services, such as a user -- Public-private partnership helpdesk and training. (PPP) -Public-private partnership (PPP): eProcurement system owned and operated by a third-party service -- Shared service provider. The intention of this model is that at some time in the future and specified in the public-private partnership agreement, the service will be transferred to the government. In the interim, the service provider is compensated either through a fixed monthly/annual fee or transactional revenues based on the usage of the system. -Shared service: eProcurement system provided by a third-party service provider and is used by multiple public sector entities or other clients. Spend Taxonomy Classification used for systematically characterizing procurements to serve improved visibility of competitions and more effective reporting mechanisms. Most usually are UN/SPSC and CPV. Tender The procedure by which a public sector entity can acquire goods, services and works. Occasionally referred to as Call for Tenders, Public Procurement Competition, or simply Tender. Non direct Contract Public procurement method involving competition and bidding process (i.e. opposite Direct contract). Framework Agreement Contractual agreement for a fixed period between procuring entities and selected supplier(s), concluded following a public procurement competition, which sets the conditions for future, repetitive purchases. Lowest Price Technically Bid evaluation process based on which the procuring entity determines the winning bid by eliminating Acceptable (LPTA) ineligible bidders and technically inacceptable bids and then selecting the lowest priced bid for award. Bidder A private sector entity interested in a public procurement competition, or submitter of bid for a public procurement competition. 34 Technical Background Paper: Adoption of eGP in Africa Procurement procedure The procedure by which a public sector entity can acquire goods, services and works. Occasionally referred to as Call for Tenders, Public Procurement Competition, or simply Tender. 35 GOVERNANCE AND THE DIGITAL ECONOMY IN AFRICA MAIN REPORTS VOLUME 1 Digital for Governance: Reaching the Potential for the Digital Economy in Africa—Digital Tools for Better Governance VOLUME 2 Governance of Digital: Regulating the Digital Economy in Africa— Managing Old and New Risks TECHNICAL BACKGROUND PAPERS • ICT Procurement in Africa • Adoption of eGP in Africa • Vulnerabilities of ICT Procurement to Fraud and Corruption • Regulating Digital Data in Africa • Taxes and Parafiscal Fees on Digital Infrastructure Services in Africa • Corporate Governance and Transparency of State-Owned and State-Linked Digital Enterprises in Africa • State-Owned Enterprises in Digital Infrastructure and Downstream Digital Markets in Africa • Competition Advocacy for Digital Markets in Africa • Competition Policy in Digital Markets in Africa