The Public Procurement Service (PPS) says Ethiopia’s transition to an electronic procurement system is progressing despite challenges related to price verification and market volatility that continue to affect the public supply chain.
Speaking at a consultation workshop on Thursday, March 5, PPS Director General Asmare Yigezu said the electronic government procurement system—commonly known as e-GP—has not yet met all expectations but is gradually improving transparency and oversight in public spending.
“This system is still in its early stages and needs time to mature,” Asmare said. “However, for the country and for this institution, it remains the most viable tool for ensuring proper management of government expenditure.”
According to the Director General, the recent integration of contract administration into the e-GP platform marks an important step forward. Once fully operational, the system is expected to help monitor procurement activities more closely and reduce irregularities throughout the procurement cycle.
However, participants at the consultation—attended by public institutions and suppliers—identified indicative pricing as a major bottleneck affecting procurement timelines.
Under a new procurement framework introduced during the previous fiscal year, the Ethiopian Statistics Service (ESS) is responsible for providing price analysis data used to verify government procurement costs. The requirement was reinforced by a directive that came into force in May.
Asmare noted that the statistics agency was assigned the responsibility without sufficient preparation to handle the volume of requests from public institutions.
“The directive requires all public bodies to obtain price information from the ESS,” he told Capital. “When the Service attempts to respond to the growing number of requests, delays occur. These delays can postpone procurement processes and eventually lead to price revisions.”
The concern was echoed by workshop participants and PPS officials, including Procurement Lead Executive Worku Gezahegn, who said the expected pricing data from the ESS has not been consistently available.
Under the Federal Public Procurement and Property Administration Proclamation No. 1333/2024, public institutions are required to verify bid prices against official market data. If bids significantly diverge from market prices—or if official data is unavailable—procuring entities may instead rely on manufacturer prices or market surveys approved by the procurement authority.
A related directive, Public Procurement Directive No. 1073/2025, further obliges public institutions to conduct market assessments before launching tenders, with the ESS designated as the primary source of price verification.
Officials say the requirement has created an implementation gap that procurement authorities are now working to address.
“We are collaborating closely with the ESS to resolve these challenges, and the cooperation between our institutions is improving,” Asmare said.
Price volatility in the broader economy has added further pressure to procurement operations. Officials say delays in price verification can discourage suppliers from honoring bids, particularly when input costs rise between tender submission and contract signing.
In cases where official data is unavailable, producers may provide indicative prices, or procurement timelines may be extended with authorization from the relevant authority. Procurement experts, however, warn that such measures are difficult to sustain in rapidly changing markets.
Despite these challenges, officials reported notable progress in public asset disposal, another responsibility under the PPS mandate.
According to Worku, revenue generated from the sale of obsolete public assets—including vehicles and scrap materials—has increased sharply in recent years. Over the past five years, including the current fiscal year ending July 7, 2026, disposal revenue has risen by 528 percent, reaching 400 million birr.
In the first six months of the 2025/26 fiscal year alone, the government generated 208 million birr from disposal activities, primarily through auctions of old vehicles and scrap metal.
“This represents a 153 percent increase compared to the same period last fiscal year,” Worku said.
The e-GP platform, introduced about three years ago under the supervision of the Public Procurement and Property Authority, now covers all federal budgetary institutions. Several regional states, including Oromia Region and Amhara Region, have also voluntarily joined the system as part of efforts to modernize public procurement processes.
