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By: Nghiinomenwa Erastus

Public entities will soon implement preferential treatment and reservation in procurement to favour competent local suppliers, manufacturers, SMEs, women, and youth-owned enterprises.

The Ministry of Finance announced last year when it released the draft Code of Good Practice (CGP) guided by Sections 71 and 72 of the Public Procurement Act.

The draft CGP states that the country Procurement Board and public entities must implement preference treatment when procuring goods, works and services and evaluating bids.

This is especially when the bidders are:

  • Local suppliers, manufacturers.
  • Small and medium enterprises.
  • Previously disadvantaged persons.
  • Previously disadvantaged women.
  • Youth-owned enterprises.

This means the public entities will practice reservations for certain tenders- exclusive preference to procure goods, works or services on behalf of public entities will be set aside for local suppliers within a threshold specified in the Public Procurement Act.

However, the procurement of goods, works, or services under the draft Code of Good Practice must be conducted on competitive procedure among the qualified target groups.

The draft explained goods manufactured as goods with a local content of at least 40% of the manufacturing costs of the goods, including direct labour performed, in Namibia.

The exclusive preferential procurement specified in the draft CGP applies to the procurement of works not exceeding N$30 million, goods not exceeding N$50 million, consultancy services not exceeding N$10 million, and non-consultancy services not exceeding N$10 million.

This does not apply in cases where the Board or public entity has proof that no local capacity exists or in case of non-responsiveness from the identified categories.


A bidder qualifies to benefit from preferential treatment if it demonstrates that at least 60% of their or its company- management employees; and workforce are Namibian citizens.

If the bidder is in a joint-venture and Namibian citizens own its majority ownership of 51% share, previously disadvantaged persons own no less than 30%.

Another criteria are that the bidder is a company and its majority ownership of 51% shares are owned by Namibian citizens, of which previously disadvantaged persons own no less than 30%;

Or at least it has a majority paid-up share capital owned by the Government or Namibian citizens. The major part of the bidder’s net profits or other tangible benefits accrues to the Government.

A potential bidder is entitled to bid for only one preference or reservation at a time in a procurement proceeding.

Where a candidate is entitled to more than one preference, the scheme with the highest advantage to the bidder must be applied, the draft explained.

To ensure maximum participation of previously disadvantaged groups and small and medium enterprises in public procurement, the Board or public entity may package its procurement of goods, works or services in practicable quantities.

The draft CGP has also indicated that the Board or public entity may not require a bank guarantee in bid security during exclusive preferential procurement.

However, the categories of suppliers specified must sign the Bid Securing Declaration Form.

At the same time, the successful bidder will (may) still be conditioned to provide performance security of 10% to 15% of the procurement contract price.

To notify potential bidders, an advertisement relating to an open bid to which the Code of Good Practice applies must state that the bid is available to youth, small and medium enterprises and previously disadvantaged persons.

The draft indicated that public entities would be required to integrate preferences and reservations in their procurement plans.

A public entity will be submitting to the Procurement Policy Unit the part in the procurement plan of that public entity demonstrating the application of preferences and reservations concerning the procurement budget.

This will be done 60 days after the commencement of the financial year.

At the same time, all procurements that involve exclusive procurement will be reported to the Procurement Policy Unit every quarter.

The code of good practice also emphasized the old directive that meat produce, poultry products, and fresh produce grown north of the veterinary cordon fence are to be sourced from suppliers north of the line.

Code of Good Practice aims to – promote, facilitate and strengthen measures to implement the empowerment and industrialization policies of the Government.

The CGP draft was released at the end of October, and for the whole of November, the public was invited to comment or make representation in connection with the draft to the minister.

The notice should be in the Gazette within 30 days from publication.

The Villager is yet to hear from the ministry if there are changes to the draft. Email:



Julia Heita

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