Updated: Mar 24
GUIDELINES FOR MSMES TO BENEFIT FROM MSME ORDER OF 2020
The Malawi Government has given opportunity to MSMEs to participate in selling goods and services with a 60 % chance of winning contracts and tenders compared to large firms. Circular number PPDA/01/22 from office of Public Procurement and Disposal of Assets Authority (PPDA) is reference for this opportunity. This window of opportunity is also known as MSME Order of 2020. There are guidelines that MSMEs need to follow to benefit from MSME Order of 2020. MSMEs need first to apply to Government through Ministry of Trade and Industry to be issued a certificate to have 60% chance of winning a contract or tender to supply goods and services to Government entities.
Application for Government Tenders
As Government Ministries, Departments and Agencies (MDAs) follow legally binding procedures to procure goods and services, their known initial stage of procurement process is advertisement to the public. To benefit from such advertised tenders, MSMEs need to bid just like any other large firm. As they bid, they stand 60% chance of winning business contracts or tenders compared to large firms whose chance is 40%.
It is important to be conversant with bidding procedures to avoid unnecessary errors that may reduce your chance of winning a tender. Your pricing need to be competitive as it is another factor of consideration by organizations when procuring goods and services. The quality of goods and services is also another critical factor considered in procurement. Avoid corrupt practices when bidding to sustain the good reputation of your business.
All MSMEs that want to sell goods or services to Government entities to benefit from the MSME Order need to register with the Ministry of Trade and Industry. There is an application form that MSMEs fill and submit at a fee of K5, 000 to get registered. When registered, such MSMEs stand 60% chance of winning Government tenders compared to large firms. The application form requires you to provide information which is assessed before getting registered to benefit from the MSME order of 2020. The information is provided under the following heading of “requirements.”
For SMEs to benefit from MSME Order of 2020, they need to meet the following conditions:
1. They should register their business with the Registrar General
2. They should register their business with the Malawi Revenue Authority
3. They should have Malawi Identification Cards
4. Their goods sold should be manufactured in Malawi
5. They should have physical business location
6. They should know their business annual sales turnover
7. They should know the number of employees the business has
8. They should provide business registration certificate, tax clearing certificate, national identity document, current business income and letter from the District Commissioner as attachments.
9. They should pay application fee.
Application Form Filling
There is an application form that an SME fills for submission to Ministry of Trade and Industry. Much information required to fill the application form come from the documents mentioned above. Such information includes business registration number, tax payer identification number in addition to other pertinent information like particulars of business owners.
Once the application form is filled and submitted to Ministry of Trade and Industry, assessment is done by a committee. If all conditions are met, the committee approves the application to register the business. MSMEs use the registration certificate when applying for Government tenders to sell goods and services with 60% chance of winning compared to large firms irrespective of their ownership.