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This is a Observational study (also classified as: Literature Review).

August 19, 2025

Evaluating the Impact of Public Procurement Reforms on Ghana’s Economic Development: An Analysis of Effectiveness and Growth Contribution

Key Points

Ghana's public procurement reforms achieved 12.7% savings on contracts, enabling nearly GH₵500 million for development projects.
Each percentage point increase in procurement efficiency raised GDP by 0.2–0.5%, particularly benefiting SMEs in Ejisu-Juaben.
Mixed-methods study employed econometric analysis and spatial regression modeling across 15 districts to uncover insights.
Permanent reform necessitates alignment of implementation with political economy for effective governance disparities.

Abstract

Emerging nations aiming to transform their governance institutions into engines of equal prosperity can learn from Ghana's two-decade-long public procurement reform. This mixed-methods study uses econometric analysis of national procurement data, spatial regression modeling, and extensive fieldwork across 15 districts to show how the Public Procurement Act (Act 914) and the Ghana Electronic Procurement System (GhEPS) have delivered significant fiscal efficiencies despite implementation challenges. Research reveals that institutional improvements resulted in 12.7% savings on public contracts from 2015 to 2022, freeing up nearly GH₵500 million for regional economic development projects. Multiplier effects caused each percentage point increase in procurement efficiency to raise GDP by 0.2–0.5%, especially in SME-focused areas like Ejisu-Juaben, where agricultural logistics contracts boosted employment by 18%. SME involvement accounted for up to 43% of contract value, but payment delays over 12 months led enterprises to take out predatory loans at 30% interest, risking inclusion targets. Officials in Sefwi-Wiawso use shared bicycles to collect tenders, demonstrating a 30% efficiency gap between urban and rural districts. Digital solutions alone cannot resolve governance disparities. Permanent reform requires more than compliance; it involves a fundamental rethink of how implementation aligns with the political economy, according to this research. A practical District Capability Framework with mobile training clinics, guaranteed payments to subject matter experts, and regional integrity tribunals turns procedural improvements into meaningful development outcomes. These findings show that transparency and value for money are essential for economic progress and give African policymakers evidence-based solutions to turn procurement from a mere administrative task into a strategic development instrument.

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