Highlights

1. According to the World Bank, Africa spends less on public procurement than other continents.
2. Africa has a higher corruption risk in public procurement than other continents.
3. Africa has a lower capacity for public procurement than other continents.
4. African countries have different levels of capacity for public procurement.

What is public procurement, and why does it matter?

Public procurement is one of the most important aspects of the global economy. It helps to ensure that governments get value for money when buying goods and services. It also helps to level the playing field between small and large businesses and promotes competition and innovation. As such, public procurement is a vital part of the global economy.

In 2018, global public procurement amounted to $11 trillion out of the global GDP of nearly $90 trillion, which means that 12 per cent of the global GDP is spent following procurement regulations. This shows just how crucial public procurement is to the global economy. Without it, governments would be unable to function properly, and the world economy would grind to a halt.

How Africa’s spending on public procurement compares to other continents

Africa is the second most populous continent in the world and is proliferating. With this growth comes an increased demand for goods and services, which increases public procurement spending. Despite the increase in public expenditure, Africa generally has lower levels of public procurement spending than other continents. In 2021, Africa’s share of global procurement spending was 5 per cent, while North America’s was 41.6 per cent and Europe’s was 37.3 per cent.

There are several possible explanations for this discrepancy. One possibility is that Africa has less money to spend on public procurement than other continents. Another possibility is that Africa has a lower level of economic development, so there is less need for public procurement spending. Finally, it is also possible that Africa has a higher level of corruption in public procurement, which means fewer funds are spent on goods and services.

Corruption in public procurement

Corruption is a significant problem in Africa, and it is one of the main reasons the continent lags behind other continents in terms of development. Corruption can take many forms, but in the context of public procurement, it typically refers to the misuse of public funds for private gain. This can take the form of kickbacks, inflated prices, and biased bidding processes.

The Corruption Perceptions Index is an annual ranking of countries by their perceived levels of public sector corruption, as determined by expert assessments and opinion surveys. The index is published by Transparency International, a nonpartisan, nonprofit organisation dedicated to combating corruption around the world. This year’s index ranks 180 countries on a scale of 0 to 100, with 0 being highly corrupt and 100 being very clean. In the 2021 index, 12 of the 20 most corrupt countries are located in Africa, and South Sudan is considered the most corrupt country in the world. This is a troubling trend, as corruption can have a devastating impact on societies. It can misallocate resources, undermine public trust in institutions, and enable human rights abuses.

Corruption in public procurement leads to a loss of trust in the government, making it more difficult for businesses to compete on a level playing field. As a result, corruption likely contributes to Africa’s low levels of public procurement spending. To encourage businesses to participate in public procurement, African governments must work to create a level playing field by cracking down on corruption. Only then will businesses be able to compete fairly, and Africa can begin to close the development gap with other continents.

Low capacity for public procurement

Another reason Africa has lower levels of public procurement spending is that the continent has a lower capacity for public procurement than other continents. This means that there are fewer qualified personnel and that the processes and procedures for public procurement are not as developed. This can make it more difficult for African governments to get value for money when they spend money on public procurement.

Conclusion

Africa generally has lower levels of public procurement spending than other continents. This is due to several factors, including the continent’s lower economic development, higher corruption, and lower capacity for public procurement. Despite these challenges, public procurement is a vital part of the African economy, and the continent needs to continue to invest in this area.