Setback as Kenya’s digital procurement plan postponed to July

The government's plan to digitize procurement has hit yet another roadblock after the National Treasury postponed the implementation of the electronic procurement system to July 1, 2025.

The delay extends the frustrations of suppliers and anti-corruption advocates who have long called for an automated system to curb fraud in government contracts.

Despite mounting pressure, including a directive from the President for a March rollout, Treasury Cabinet Secretary John Mbadi said the system would first undergo a three-month trial.

He emphasized the need for a phased approach to avoid potential disruptions.

The e-procurement system, known as e-GP, is expected to transform how government tenders are initiated, evaluated, and awarded.

If fully implemented, it will eliminate human interaction in the process, making it harder for corrupt officials to manipulate procurement decisions.

President Ruto has repeatedly expressed frustration over the slow pace of the project, which has been in the works for nearly a decade.

"The National Treasury has been dragging its feet in the implementation of an e-procurement system for nearly 10 years," the President said in his State of the Nation Address on November 21, 2024.

"Today, I direct the National Treasury to roll out the e-procurement system by the end of the first quarter of 2025 and ensure that, going forward, only procurement undertaken through this system is sanctioned."

However, the new timeline means that government agencies will continue to rely on outdated manual processes for several more months.

Long-Standing Transparency Issues

The e-GP system was initially scheduled for a July 2024 launch but was pushed back due to budget constraints.

Treasury has been seeking additional funding, even as international bodies such as the International Monetary Fund (IMF) pressure Kenya to digitize procurement to reduce corruption.

In January 2024, the Treasury informed the IMF that a pilot phase was underway across 12 ministries and state departments.

The IMF has been a strong advocate for the reforms, arguing that digital procurement is crucial for ensuring accountability in public spending.

The delay has raised concerns among businesses that rely on government contracts. Many suppliers complain about delayed payments and bribery demands in procurement offices.

Kenya's procurement sector has long been plagued by corruption, with bribery accusations coming from both local and international entities.

The United States has been particularly vocal, with its officials pointing to bribery demands at both national and county levels.

"Corruption remains a substantial barrier to doing business in Kenya. US firms routinely report direct requests for bribes from all levels of the Kenyan government," former US Trade Representative Katherine Tai stated in the 2024 National Trade Estimate Report on Foreign Trade Barriers.

While the e-procurement system remains in limbo, the Treasury has moved other financial transactions online.

The upgraded Integrated Financial Management Information System (IFMIS) now handles purchase orders and invoices digitally, making it harder for corrupt networks to delay payments and demand bribes from suppliers.

Still, many believe that full automation of the tendering process is necessary to truly tackle procurement fraud.

With the latest postponement, transparency advocates worry that corruption will continue thriving in the public procurement sector, at least until the system is finally in place.