Corruption is pervasive in Zambian government procurement presenting companies operating in the sector with high risks (ICS 2017). Businesses report that bribes and irregular payments are common when bidding for public contracts (GCR 2015-2016). Almost a third of companies indicate they expect to give gifts to secure government contracts (ES 2013). Both the diversion of public funds and favoritism in decisions of government officials are common (GCR 2017-2018). Fraud in the tendering process for government bids is widespread and often occurs during vendor selection, contracting and maintenance (GECS 2014). Transparency and accountability is particularly lacking in the last stages of the procurement process, which leaves significant room for manipulation (GI 2017). Private companies are able to compete with state-owned enterprises (SOEs) under equal terms when it comes to access to markets, credit, and other aspects of business operations such as licenses and supplies (ICS 2017). However, SOEs are not subject to the Government Procurement Agreement and are able to procure their own goods and services freely (ICS 2017). Payments for procured goods and services are processed without following procurement procedures due to failure to comply with regulations and the weak implementation of internal control systems (GECS 2014). Suppliers are known to inflate their prices far beyond market values, pointing at likely collusion between government officials and suppliers (Daily Mail Limited, Sept. 2017).
The risk of corruption in Zambia’s defense procurement sector is very high (GDACI 2015). Zambia has created the Zambia Public Procurement Authority, to counteract corruption in the public procurement sector. Corruption in procurement remains rampant, but the introduction of an electronic procurement system, slated to be introduced in December 2017 is hoped to help curb corruption in the sector (B&FT Online, Jul. 2017). Another area with high risks of procurement fraud is road construction; a government minister was allegedly fired over his role in a corruption case involving road construction contracts worth USD 30 million (The Citizen, Nov. 2016). In another instance, suspicions were raised about a ballot paper printing contract granted to a company based in the United Arab Emirates, which printed the ballots for the August 2016 general elections. The company was not the lowest bidder and no other reason was given for picking a bidder whose price was higher than the firm which printed ballots for previous elections (GI 2017).