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Government lifts privilege afforded to local rebar producers

The Government of Ethiopia has lifted a year old controversial privilege given to local rebar manufacturers which directs public procurement agencies to purchase reinforcement bar exclusively from local producers, The Reporter has learnt.

It is to be recalled that the privilege given to the local reinforcement bar producers was given by the then Ministry of Finance and Economic Cooperation back in February, 2016, where a circular was signed by the then Minister Abdulaziz Mohammed, directing all government procurement agencies to exclusively buy rebars only from local producers.

For almost the past three years, the circular was controversial where a number of local importers and international suppliers were criticizing it, saying it excluded importers and goes against free market principles.

However, the government said it had issued the circular in order to incentivize local rebar producers.

Since then, the federal procurement office, the Public Procurement & Property Disposal Service (PPPDS) has been exclusively purchasing rebars from local producers. Then after, Addis Ababa City Procurement & Property Administration Agency which took the mandate to procure rebars on behalf of the public housing projects from the later was also doing the same in line with the aforementioned circular.

For instance, since 2017, the city administration via its procurement agency, have been purchasing rebar but the process was bumpy.

“We couldn’t purchase as per the demands of the city administration, official from the Agency told The Reporter. And that was because of failure of local producers attributed to several reasons.”

In its latest bid, the City Agency floated an international competitive bid a few weeks back to purchase 21,760.65 tons of reinforcement bars of 6 mm,8 mm,10 mm,12 mm,14 mm,16 mm,20 mm,24 mm and 32 mm diameters.

The bars are manly for the construction of housing projects.

“We were given a permission by the Finance Bureau of the city to float an international competitive bid,” Abdukadir  Redwan, deputy general manager of the Agency told The Reporter.

“The local producers failed us many times,” said another official.

Following the floatation of the international competitive bid, a number of interested bidders are buying the documents.

“So far, we are not informed about the new developments regarding the circular,” said Solomon Mulugeta, general manager of the Association of Basic Metals & Engineering.