Questions Raised Over State’s New e-Procurement System

National Treasury has unveiled a new Electronic Government Procurement (e-GP) system drawing scrutiny, even as the Kenya Kwanza administration banks on it to enhance expenditure management and accelerate economic growth.

The system is designed to enable suppliers to register for government tenders seamlessly while allowing the public to monitor government spending and gain visibility into the country’s fiscal space.

Every detail involving public procurement is expected to be integrated into the platform, promoting a new level of transparency in the management of public funds. According to data in the public domain, the e-GP system was developed at a cost of approximately $2.98 million (Sh384.6 million) through an open tender process.

A joint venture between Sybyl Kenya and India’s iSourcing Technologies was awarded the contract in May 2022 by the National Treasury.

Its implementation is part of a broader digital ecosystem that includes existing platforms like the Integrated Financial Management Information System (IFMIS), which has been used to track financial flows in national and county governments. Treasury Cabinet Secretary John Mbadi, while launching the system, noted that it will anchor three pillars critical to economic reform: Proper expenditure management, improved revenue mobilisation, and sound debt oversight.

“The system will facilitate the registration of all suppliers, and all suppliers interested in government tenders. The information will be visible to everyone and will help us onboard the approved budget so that everyone can see how the different allocations have been made,” he said.

All supplier registrations and tendering processes will be visible on the platform, making budget allocations and government transactions accessible to the public in real time. This, he said, will enhance transparency, reduce corruption, and ultimately steer the country toward sustainable growth.

However, economists and civil society lobbies have raised questions about the necessity and ownership of the system, given that IFMIS already exists to serve similar functions. Similar sentiments were raised when the IFMIS was unveiled.

According to Consumer Federation of Kenya’s Secretary General Stephen Mutoro, the government should have upgraded IFMIS instead of investing millions into building a new system from scratch.

“We are very open to new development ideas however the new rollout has factored in the aspect of cost which the government has spent on the development of the system, instead they should have just upgraded IFMIS. They should also come clearly and tell us who is the actual owner of the system,” he said. He also demanded transparency over the identity of the system’s engineers and contractors, arguing that taxpayers deserve to know who controls the infrastructure.

Economic value

Mutoro said that rollout success depends not only on the system’s design but also on implementation, training, and cultural change within public institutions.

Prof Samuel Nyandemo, an an Economics lecturer at the University of Nairobi, echoed the sentiment that the system could deliver significant economic value if managed correctly. However, he warned that without transparency around system ownership and functionality, the e-GP risks becoming a conduit for entrenched corruption under the guise of digital transformation.

“If the CS says that the three factors which will be Integrated in the system will help drive change, then we will run with that, but we also need to understand the proper structures that have been put in place to guarantee its relevance,” Nyandemo stated. He added that “Kenyans also need to be assured who the actual owner of the system is, otherwise, this might be another way for the government to place its conduits to syphon taxpayers’ money.”

This skepticism is fuelled by Kenya’s long-standing issues with public expenditure. Recent supplementary budget estimates reveal that recurrent expenditure stands at Sh1.72 trillion, while development projects received only Sh590 billion.

This imbalance has sparked criticism from international financial institutions and local experts, who argue that prioritizing salaries and political appointments over capital projects undermines long-term growth. The Treasury CS himself acknowledged that bloated wage bills and duplicated functions at both county and national levels are holding back development.

He lamented that Kenya runs an overly expensive government, suggesting that the new system could help reverse this trend by enforcing stricter monitoring and evaluation of spending.

The promise of the e-GP system lies in its ability to integrate seamlessly with IFMIS by June, according to Treasury officials. It is also expected to track whether procured goods and services are delivered to the intended beneficiaries—something previous systems have struggled to achieve