Mozambique:

Insufficient Effort Made to Attract U.S. Suppliers Under AID Commodity Program

NSIAD-94-73: Published: Feb 28, 1994. Publicly Released: Mar 16, 1994.

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Pursuant to a congressional request, GAO reviewed the Agency for International Development's (AID) procurement procedures under the Commodity Import Program (CIP), focusing on: (1) why CIP primarily benefits U.S. competitors; (2) whether changes in law or regulation are needed to prevent this procurement imbalance; and (3) whether AID financing of commodity purchases from South Africa violated sanctions against that country.

GAO found that: (1) CIP has reduced the marketing opportunities normally available for U.S. suppliers and has caused a low rate of U.S. supplier participation in program financing; (2) political instability in Mozambique has also contributed to U.S. suppliers' lack of participation because U.S. companies have not established commercial ties to the local importers; (3) AID has failed to seek U.S. supplier participation or promote U.S. exports when certain market entry opportunities occur, particularly regarding the import of trucks; (4) to improve U.S. export opportunities, AID has restricted program financing to vehicles from U.S. sources, expanded the list of eligible commodities, and issued new guidance to improve procurement planning; (5) AID considers CIP to be a success, since it has helped revive Mozambique's agricultural sector; (6) no changes in law and regulation are needed to prevent the procurement imbalance, since AID policy is to procure commodities from U.S. sources whenever possible; and (7) AID financing of commodity procurements from South Africa did not violate the sanctions against that country, since none of the items imported were purchased from South African government entities.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Administrator, AID, accepted the report's recommendations and AID has taken steps to better publicize U.S. export opportunities and help U.S. suppliers make early contact in new and developing markets. Steps include publishing a general notice in Mary 1994 in the Procurement Information Bulletin describing the Mozambique CIP; publishing a procurement information memo in August 1994 listing the address, telephone, and fax numbers of Mozambique importers and commodities they were interested in importing; arranging for commodities they were interested in importing; and arranging for the importer list to be sent to the National Trade Data Bank to be put on the INTERNET communications system and available on CD-ROM.

    Recommendation: To ensure that U.S. suppliers are notified as soon as possible of any planned commodity procurements under private-sector CIP or other AID-financed programs, the Administrator, AID, should compile and circulate importer lists to interested U.S. suppliers and determine whether new or additional methods are needed to appropriately publicize purchases.

    Agency Affected: United States Agency for International Development

  2. Status: Closed - Implemented

    Comments: GAO considers AID notification actions and arrangements with the Departments of Commerce and State to circulate lists and commodity requirements to be responsive to the recommendation.

    Recommendation: To ensure that U.S suppliers are notified as soon as possible of any planned commodity procurements under private-sector CIP or other AID-financed programs, the Administrator, AID, should cooperate with other federal agencies to assist U.S. suppliers in making early contact with local distributors in new or developing markets where export opportunities may exist.

    Agency Affected: United States Agency for International Development

 

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