Public procurement is like the heartbeat of public spending in most of Africa – by some estimates, it accounts for 17% of the GDP of African Countries.
There is growing recognition that the public procurement system can be a strong force for policy implementation, helping to tackle major social and economic challenges faced by governments across the region. As the largest portion of the economy that is directly in government’s hands, public procurement is now at the forefront of interventions in digitizing government business, and advancing inclusive development, sustainability, and open government.
This was not always the case. Procurement was long seen as a clerical administrative function, rather than a strategic lever. While not all countries have moved at the same pace, this evolution has happened over several distinct waves of broad procurement reforms. In my view, it is now undergoing a third major wave of reform.
The first revolution: Decentralization and professionalization
The 1990s saw major economic reforms across Africa under the structural adjustment program, including a major overhaul of the public financial management systems. By the end of the decade, there was growing recognition that existing public procurement systems were not fit to deliver the development outcomes that were so desperately needed if countries were to recover economically. Their inadequacies had become self-evident, and assessments by local actors and development partners such as the World Bank through a series of Country Procurement Assessment Reviews revealed a number of structural problems. These included ongoing issues such as poor institutional coordination, lack of transparency, high levels of corruption, and murky lines of accountability.
The urgent need to stem these ills led to the first wave of reforms that saw an overhaul of colonial era and post-independence procurement structures in the form of Tender Boards that were characterized by centralized procurement, lack of transparency, outdated legal framework and weak dispute management mechanisms. Largely anchored on the UNCITRAL model law on public procurement, several countries abolished the centralized and inefficient tender boards. The key features of the first generation reforms that took place between 2000-2005 addressed aspects of legislation, centralization and independence, and professionalization. Early reformers in this first revolution were Ethiopia (2005), Ghana (2005), Kenya (2007), Tanzania (2004), Uganda (2003), and Zambia (2006).
Common aspects of these reforms included:
- a procurement law with secondary legislation that regulated the procurement procedures;
- broad decentralization of the procurement function to all government ministries, departments and agencies (MDAs) and local governments;
- the creation of an independent regulatory body to provide oversight over all government procurement and;
- the creation of a professional cadre to conduct procurement among others.
These reforms improved efficiency as the decentralization of the procurement function allowed for quicker decision-making. The legal framework as well as the creation of procurement oversight agencies led to more accountability, with a clear set of rules as well as checks and balances. Aggrieved bidders also had a right of appeal through administrative reviews mechanisms, something that was previously lacking. The reforms also created a procurement cadre across government that had specialized training – the most common of which was the CIPS-UK. There are now academic programmes dedicated to procurement in many business schools in Africa that are churning out procurement professionals that are managing the procurement units, as a holdover from this first wave of reforms.
However, despite clear gains made, concerns arose that the reforms had made public procurement very rigid and bureaucratic, with many layers of checks and balances that were slowing down the procurement process and thus affecting service delivery. And despite the reforms aimed at improving accountability, perceptions of corruption in public procurement remained high. The transparency question had not been handled properly in the first reforms, and procurement information largely remained hidden from or inaccessible to other players within government as well as non-state actors.
The second revolution: increasing independence, data collection and participation
These limitations led to a subsequent second wave of reforms. While the policy and regulatory frameworks were put in place, concerns about delays in the procurement process, including those caused by some of the structures created for checks and balances remained. In addition, price overruns continued to plague procurement outcomes, as well as poor contract execution, manifested through poor quality works and delays.
One of the incentives for countries in Africa to adopt procurement reforms was for development partners such as the World Bank and OECD members to use country procurement systems in their acquisition processes. This was also one of the major outcomes of the Paris Declaration on Aid Effectiveness in 2005. In order to do this, the OECD/DAC developed the Methodology for Assessment of Procurement Systems (MAPS) to provide a comprehensive assessment of the performance of government procurement systems, which went beyond the World Bank’s CPARs that had been previously used. MAPS assessments provided further evidence of gaps that informed the second generation reforms.
The second revolution, spanning 2008-2015, addressed the speed, bureaucracy, and opacity that were unintended results of the first wave of reforms, anchored in revision of the procurement laws in some countries such as Ghana, Nigeria (both at federal and state level), Rwanda, Tanzania, or Uganda.
This second wave of reforms helped to:
- streamline the complaints mechanism to make it more independent and speedy, including the creation of autonomous, quasi-judicial tribunals to handle procurement complaints;
- separate the policy function from regulation, with the policy function embedded in finance ministries and the regulatory bodies left to concentrate on oversight;
- improve data collection and transparency, with some countries also developing procurement portals, such as the Government Procurement Portal (GPP) in Uganda, Public Procurement Information Portal (PPIP) in Kenya, Nigeria Open Contracting Portal (NOCOPO) among others, which helped to introduce some automation in public procurement. The public register of providers was also automated in places like South Africa, Tanzania, Uganda, to mention but a few.
- involve non-state actors such as academia, civil society, and the media in public procurement oversight, as well as early civic engagement by members of the public participating in contract monitoring.
The third revolution: A focus on outcomes, inclusion and full digitization
The third revolution which began in some countries between 2015-2018 resulted from the recognition that public procurement is not just a tactical tool to spend government resources, but can be deployed as a strategic tool to achieve a country’s key development objectives.
The third revolution has seen governments use public procurement to promote:
- Local economic development through the promotion of affirmative action in public procurement, such as provision for reservation and preference schemes to award more contracts to local firms as a means to increase employment opportunities and grow local enterprises.
- Inclusive development through support for women, youth, or other marginalized/priority groups to improve their access to government contracts, as seen in Kenya, Nigeria, Rwanda, or South Africa, among others.
- Automation of procurement processes through the adoption of e-government procurement (e-GP) systems. Several African countries are at different stages of the adoption of e-GP.
- Sustainable procurement by incorporating economic, social and environmental safeguards in procurement requirements.
Of course, not all countries have moved at the same pace, providing an opportunity for those that are at different stages of the reform process to learn from the successes and challenges of others.
At the OCP, we are supporting countries on their reform journeys, especially through the third revolution. We have resources on e-GP, with lessons learnt from those that have started on this journey. We are supporting partners across the region to move forward with more inclusive and equitable procurement, especially focused on women’s economic empowerment, including through our Lift impact accelerator program. We have also developed resources to support those on the journey to more sustainable procurement, even those in the early stages. Our robust global network facilitates connections between reformers in- and outside government, across the region and beyond.
We are currently developing our strategy for the next five years to further define our support for countries no matter what stage of the reform process they are in, endeavoring to better meet them where they are and change procurement for the better together.