Success Story — Rwanda | The Pioneer of E-Procurement in African Region
Public Procurement encompasses a notable share of the economy in nearly every country. Many argue, that an effective public procurement system can play a vital role in the development of any given nation and build up a truly capable state. Therefore, the lack of transparency and corruption can undermine existing paper-based systems and result in significant losses that are estimated to account for billions of dollars yearly. Electronic government procurement, also known as e-GP, can overcome the barriers of time and space, increase the level of transparency in procurement processes, and widen access to new markets and information.
E-GP is an innovative solution that incorporates information and communication technologies (ICT) and streamlines public procurement processes for greater efficiency and development. E.g. The Republic of Korea, which has an extremely well-versed procurement system, estimates that the implementation of an e-GP has provided a $6 billion economic benefit for both the government and its suppliers through efficiencies and both tangible and intangible cost savings.
At the beginning of 2014, the government of Rwanda initiated the process of becoming the first African Nation to realize the benefits of e-GP. The state launched the pilot system in 2016 and rolled-out nationwide e-procurement in 2017. This e-GP system is called UMUCYO, that means “transparency” in the local language.
E-GP system in Rwanda and its reflections
In 2007 the Government of Rwanda passed a new procurement law and in 2008 established a corresponding regulatory body — Rwandan Public Procurement Authority (RPPA). At this stage, the country looked for ways to modernize existing public procurement systems. Country Officials paid a visit to the Republic of Korea and studied their e-GP system, which is one of the most advanced in the world. Later on, in 2013, the government of Rwanda requested funds from the World Bank (WB) to conduct a feasibility study on the implementation of the e-GP system. As the study proved positive, the state launched a US$100 million WB project with the initiative to enhance the effectiveness of the country’s public financial management. One of the key focus areas of this project was to establish a pilot e-procurement system.
In 2014, the government of Rwanda formed a joint venture with Korean Telecom Corporation and created a new company — African Olleh Services Limited (AOS), with the aim to develop a customized e-procurement system.
Why did Rwanda Choose e-GP? Electronic procurement systems have many advantages over traditional paper-based arrangements. Some of the major factors are as below:
- Easy, Open, and centralized access to the information
- Quicker and easier decision-making processes
- Reduction of Information asymmetry and mitigation of influence from large firms
- Reduced Corruption Opportunities
- Increased Access to markets and diversified suppliers
- Overall Transparency and Sustainability.
What were the Drivers of Success for Rwanda? The success of Rwanda in public innovation can be attributed to 3 key dimensions:
- Political Leadership — The initiative itself, as well as supporting activities such as passing the new law and establishing relevant regulatory authority, have played a significant role in the overall success.
- Institutional Capacity — By forming a joint venture with a Korean corporation and requesting assistance from WB, Rwanda was able to build and increase the institutional capacity that could support the implementation of e-GP.
- ICT — By employing technological processes, Rwanda was able to automate public procurement and streamlined the bidder activity. Moreover, the state reduced the possibility of using falsified documents and accelerated the overall procurement process.
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