Procurement as an enabler of economic growth needs to help take Africa further forward through enabling more deliberate, focused, and thoughtful expenditure, in addition to supply chain professionals ensuring that money is not purposefully or accidentally wasted.
For roughly six and a half decades, African countries have been moving from political independence into economic independence, building key infrastructure – roads, hospitals, airports, mines, schools, power plants, ports, digital networks and public institutions – with public money, borrowed capital, development finance and private investment.
Yet the role of procurement as a further catalyst for growth has yet to be fully realised.
More than paperwork
Rather than being an administrative procedure, procurement is a vital mechanism that enables governments to determine where best to help ignite growth through ensuring that the right supplies are where they should be, when they should be, at the appropriate price.
Building a hospital in a specific area, for example, can catalyse job creation, manufacturing development, the growth of small businesses into larger ones, and surrounding industries.
Procurement is also key to ensuring that development investment circulates throughout the economy instead of leaking offshore, which is vital when it makes up such a substantial share of GDP and government spending across Africa.
As a result, procurement must go beyond ensuring compliance to being a key aspect of industrial and employment policy. This is where supply chain professionals can drive growth, through a shift in focus from just whether procedure was followed to ensuring that every dollar, kwacha, shilling, kwanza or franc is spent creating the greatest possible African development value while preserving integrity, competition and value for money.
Borrowed rules
As a continent, we have benefited from international experience – competitive tendering, transparency, independent oversight, audit trails and professional standards are essential. Yet, this has also brought with it policy replication, with procurement systems across Africa being shaped by colonial legal traditions, donor procedures and imported definitions of competition, designed primarily as fiduciary safeguards.
The need for mechanisms that prove that money was spent according to the rules is essential; yet cannot stand alone. Auditor General reports across Africa show that rigorous procurement compliance controls can be in place yet fail to deal with the indisputable fact that the right items need to be bought at the right price to ensure lasting domestic capability.
As supply chain professionals, we can, and must, move beyond the narrow, typically western approach of a US$500 million public programme simply identifying qualified bidders.
Look inside
We need, instead, to turn inwards and ask how we can develop procurement into an African-centred, industrial policy-based approach that will also consider how much local economic value will be generated through the project.
This needs to be determined through questions such as how much of the money will remain in Africa, how African companies can best participate, whether local manufacturing capacity will be created, and whether local companies will be provided with opportunities for expansion – all of which will aid the circular economy.
When considering the circular economy, we also need to look to our neighbours as African countries pay a fragmentation premium. Fifty-five national markets are very often buying the same items across various industries – such as medicines for pharmaceutical retailers – which weakens collective bargaining power.
Intelligent aggregation – not indiscriminate centralisation – is how this cycle can be changed, with pooled procurement in health and pharmaceuticals a concrete example of how African demand can become a source of bargaining power and industrial development.
Across Africa, we should also ensure that we aid companies grow internally so they are not disadvantaged through size and have to compete unfairly for contracts. Here, government contracts can be connected to invoice and insurance finance, development finance institutions and appropriate fintech mechanisms.
Smart money
One way that we can ensure that we best meet the needs of our citizens through job creation and developing economies is through artificial intelligence (AI). Not only can AI ensure regulatory and legislative conformity, but it can also cut down on fraud through the use of information sharing across borders.
This is why I propose a digital-native procurement intelligence system – not just electronic tendering, but a Pan-African E-Procurement System built by African talent for Africa, in partnership with global AI powerhouses, which would enable the creation of a collective procurement intelligence database.
Success should be measured not by compliance and short-term savings, but by how much value stays within African economies. That means moving from adapting other people’s procurement systems to designing our own – working with the world, competing with it where it matters, but no longer outsourcing the intellectual design of Africa’s economic future.
