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New Regulations on Public Procurement

The procurement for public works, supply of goods and services from public entities has been undergoing constant changes over the years. Decree Law no. 48817 of 19 February 1969, applicable to Mozambique through Ordinance 555/71 of 12 October (Regulation of Works and Supply of Public Works) was first updated by Decree no. 42/89 of 28 December, and updated by Decree no. 29/97 of 23 September, which approved the Regulations on Public Works, Supply of Goods and Provision of Services to the State. This decree was repealed in 2005 by Decree No. 54/2005 of December 13, which was later also repealed by Decree No. 15/2010 of 24 May. This decree was later revoked after the entrance into force of the Regulation on Public Works, Supply of Goods and Provision of Services to the State, approved by Decree No. 5/2016 of 8 March (hereinafter the “Regulation”). The Regulation has undergone two amendments since its approval in 2016, namely, by Decrees no. 71/2020 of August 13 amending paragraph g) of Article 94 of the Regulation and by no. 89/2021 of October 29, which amended paragraphs 2 and 3 of article 102 of the same Regulation.

With this article, we intend to highlight some of the changes introduced by Decree No. 79/2022, of 30 December, which approves the Regulation on Public Works, Supply of Goods and Provision of Services to the State and repeals the legislation approved as of 2016 from the legislation above and entered into force on 30 March 2023.

It should be noted that the amendment by repeal of the regulation was justified by the Government through the Ministry of Economy and Finances in the socio-political transformations, dynamics and economic and social growth, new business opportunities, the review of the Commercial Code and electronic procurement (e- procurement[1]).

In fact, some uniformity is noted, especially with regards to the concepts of micro, small, medium and large companies that follow the regime that was established in the Commercial Code, creating some stability in their conception.

Also of note is the introduction of the concept of beneficial owner, defined as the individual who ultimately owns or has ultimate control of a client and/or the person in whose interest a transaction is performed. It also includes the persons who effectively control a legal person or entity without legal personality. In such case, an amount of 60 million Meticais has been set as the minimum amount that must be declared.

Within the scope of the promotion of electronic procurement (e-procurement) which is the procurement procedure carried out in an integrated manner using information and communication technologies[2], the UFSA - Unidade Funcional de Supervisão de Aquisições has been conferred the power to propose the use of information and communication technologies. This implementation is urgent in view of the technological advancement that the most diverse areas are experiencing and that brings with it several advantages.

We have also noted some facilitation for the participation of foreign bidders, with the elimination of the requirement to have a proxy or representative domiciled in the country. Likewise, in the case of procurement in the health sector in cases of public calamity, the presentation of proof of legal, economic-financial, technical and tax regularity qualifications in the country of origin is suppressed and replaced by the presentation of mere certificates and proof of competency. With these two measures, there is certainly some tendency to reduce burdens and facilitate the procurement of foreign companies, however, it must be ensured that these measures do not harm the institutions that enforce the legislation.

As previously stated, amendments have been approved that include the health sector in the scope of direct award, which now includes the purchase of medicines, hospital equipment and similar products in situations of public calamity and while it lasts and in emergency situations, while maintaining the general rule of public tender. Also included in direct award is the procurement between State bodies and institutions.

About the application of the margin of preference that already existed, was adjusted from 10% and 15% to 15% and 20%, respectively for public works and service provision for national bidders and for goods that are produced in the country.  For goods, the possibility of alternative use of the slogan "Orgulho Moçambicano. Made in Mozambique." was also introduced in lieu of declaration of provenience.

Furthermore, the obligation of the contracted to subcontract at least twenty percent (20%) of the works to micro, small and medium national companies, when contracting works in the value equal or higher than 100,000,000.00 (one hundred million Meticais) was introduced.

In summary, it can be said that some of the changes introduced by the new Regulations sought to benefit national companies, creating facilities for their participation in business in Mozambique and the valorization of what is produced locally, alignment with the new Commercial Code, facilitating the participation of foreign competitors and introducing facilities for the purchase of medicines and hospital equipment in cases of calamity and emergency as well as the e-procurement which should be used in contracting procedures. For this last point, it is up to the Minister of Finance to establish the administrative procedures and guidelines for its implementation[3].


[2] Regulations’ Glossary

[3] Article 10(2) of the Regulation.