Monday, March 8, 2021

ICT companies lament poor government support

Government has been called upon to support local ICT companies and boost their growth so that they are able to compete with multi-national companies and contribute meaningfully to economic growth in Botswana.

In an interview with Sunday Standard, BOCCIM Chairman for the ICT Sector Neo Nwako said it is important for government to reserve some ICT tenders for local companies and insist on active participation of local companies in tenders that have been awarded to multinationals.

In the past, concern has been raised about limited participation of local ICT companies in government tenders. It has emerged that even those companies that submit tenders are often disqualified during early stages because of non-compliance with PPADB requirements. The Public Procurement and Asset Disposal Board (PPADB) was also slammed for favoring foreign owned companies in awarding lucrative government tenders. And the figures paint a deplorable picture. When it comes to ICT, citizen owned companies are completely outclassed by their multinational counterparts. While some local companies don’t bother submitting tenders at all, those which do submit are almost always beaten hands-down by bigger, better and cheaper foreign owned companies.

Government has reserved tenders worth P3million and below for local companies in a bid to bolster them into action. But it has emerged that foreign owned companies are also encroaching into that reserve, as in the past red flags were raised after it emerged that some government sponsored institutions awarded tenders worth less than P3million to foreign owned companies. But what could be the problem? Nwako believes the biggest problem is lack of capacity, and the solution lies with government support.

“We are not saying government does not support us; we are saying that support is not enough,” he said.

He revealed that more government support is needed to allow local ICT companies to grow, compete on a global scale and contribute meaningfully to the economy by creating employment.

“We have more than 6000 ICT graduates roaming the streets with no jobs. Every year local institutions churn out over 1000 more graduates into the streets. But local ICT companies are unable to absorb them. The solution to solving this problem is ensuring that local companies are capacitated enough to be able to create employment for these young people,” he said.

He challenged government to ensure that basic services in the ICT sector like website development and support are strictly reserved for not only local companies, but also youth owned ICT companies. He said government must demand evidence of youth and local empowerment from all companies that enjoy government tenders, such that there is transfer of skills and localization of benefit.

“As BOCCIM, we believe companies that win government tenders should have 70 percent of their staff complement as locals, 30 percent as youth. Government should also insist on first line support by locals,” he said.

In addition, he said, government should insist on active participation of local companies in large scale projects, especially as joint venture partners. This will facilitate skills transfer and build capacity in local companies. Nwako believes that poor participation by local companies in government tenders is a national security threat, especially in areas of management of land, identity cards and other services.

“It’s not advisable to have foreign owned companies handling such sensitive national information. That should be reserved for locals. But they can only handle such large projects if they are allowed to grow,” he said.

He urged government to improve the ease of doing business because the efforts and costs of tendering for government ICT projects are very prohibitive. He gave an example of a requirement that on tendering, all submitted documents should be certified by source or by the issuing entity. He said such an arrangement is cumbersome and restrictive for small companies as they don’t have dedicated personnel to deal with such challenges.

“Such cumbersome requirements are what mostly lead to many local companies being disqualified. Some don’t even bother tendering because it is a vexing exercise. Others are disqualified at pre-qualification stage because of these requirements and their tenders never reach technical adjudication stage,” he said.

However, Nwako said BOCCIM continues to engage with government and other stakeholders to lobby for more improvements and is hopeful that things will change for the better in future. He reiterated his call for increased government support, saying most of the companies that they compete with are multinationals that enjoy massive support from their governments.

“These companies are backed by their governments. They are able to compete with everything, be it price, capacity or technical competency, because they are backed by their governments. That is who we are competing with,” he said.

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