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Is ECX at it again? By Wondwossen Mezlekia November 30, 2012
The Ethiopia Commodity Exchange (ECX) is currently conducting a high-ticket international procurement – the first of its kind since a multi-million dollar bid was busted in 2010 due to alleged fraud and corruption during the bidding process.
Strangely, the said futures trading software was not needed to begin with and would have been running idle today had ECX purchased it in 2010, because the government is, as it has always been, decidedly against price speculations and hence would not allow Forwards and Futures trade operations that the software was supposed to support. ECX is once again preparing to spend some of the money that the government has borrowed from the Investment Climate Facilities for Africa Trust (ICF) and other donors on an online trading platform at an estimated total cost of more than $10 million (exact amount and details are withheld). Arguably, much like the futures trading software, the merit of this investment is also questionable, especially in light of ECX’s and the government’s current priorities, the details of which is for another article. The purpose of this article is to equip concerned citizens with the information and resources they need to be on their guard against corruption, and to put on notice anyone who may be under temptation or illusion to fraudulently benefit from the upcoming bid. Although there is no evidence so far, it is better to prevent corruption than to prosecute it.
The past record of the government in detecting or prosecuting suspected fraud and corruption is dismal. On the other hand, donor’s guidelines have proved to be reliable sources of defense in past disputes involving international procurement bids. Among these, ICF’s guidelines appear to be by far clearer and strictly dictating how the borrower and bidders alike should behave during the bidding process. For example, ICF not only offers to provide assistance of audit services and monitoring (Article 1.6), but also explicitly states the steps that it takes to fight fraud and corruption (Article 1.7).
Articles 2.1, 2.15, and 2.21 of ICF’s guidelines also require borrowers to conduct bidding by following a two-tiered approach and based on Quality and Cost Based Selection (QCBS), which uses a competitive process that takes into account the quality and the cost of the services in the selection of the winner. The guidelines prohibit evaluators of technical proposals from having access to the financial proposals until the technical evaluation is concluded.
Articles 2.11 and 2.12 if IFC’s guidelines even go as far as to dictating the minimum time that grant recipients need to allow between the different stages of the procurement process. For example, the minimum time-limit for receipt of proposals should not be less than 40 days from the date of the advertisement, except in emergency situations. While these and other Articles of ICF’s guidelines appear to provide reasonable controls around each segment of the procurement processes, any control is only as strong as the people applying them. It is thus imperative that concerned citizens and bidders get engaged and attentively monitor all international bidding processes conducted at ECX and other institutions in order to prevent misappropriations of foreign aid in Ethiopia.
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