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56 Diagnosing Corruption in Ethiopia
Recommendation 2: Ensure appropriate PFSA oversight and support.
The PFSA will be responsible for a rapidly growing amount of procurement
and is even supposed to manage distribution of donated commodities
(bednets, antiretrovirals, and so forth). Ensuring transparency
and appropriate oversight without hindering the PFSA’s efficient
operation is critical.
This agency could substantially reduce the scope of corruption in
procurement and distribution of supplies and medicines in Ethiopia by
better using the limited number of skilled personnel, standardizing procedures,
improving forecasting and planning, and eliminating duplication.
However, the PFSA’s authority over an enormous portion of health
sector spending also makes it an attractive target for corruption. It is
extremely important to ensure appropriate oversight and support for
this key agency.
Regarding the PFSA, two issues stand out: the difficulties of supervising
specialized procurement and the potential tradeoff between performance
improvements and abuses inherent in concentrating control in
the PFSA. Addressing both of these issues requires increased public
transparency and external oversight.
Supervising specialized procurement. The continuing need for procurement
of high-value and specialized equipment and commodities will
require the PFSA to ask the PPA for special exceptions. Managing this
process with appropriate oversight and controls but without hampering
the efficiency of procurement and use of these supplies will require substantial
effort.
There is potentially a direct tradeoff here: any exceptions that are
authorized to make procurement efficient—as in the example of
ELISA equipment described earlier—can be exploited to restrict competition,
raise prices, misuse funds, or generate kickbacks. Therefore,
Ethiopia needs a clear and agile set of procedures under which the
PFSA can ask the PPA for exceptions when market and technical criteria
suggest this would be the most efficient route. Some form of
external oversight, however, is necessary to ensure that these procedures
are not abused.
Better procurement vs. Risk for abuse. Although consolidating procurement
in a specialized agency like the PFSA has the potential to substantially
improve the efficiency and quality of procurement, these benefits
also come with the risk of concentrating opportunities for abuse. Existing