The importance of public procurement throughout the world
For governments around the world working to create paths to economic recovery in the wake of the coronavirus pandemic – public procurement is playing a key role in helping delivery of vital goods and services to local populations. These government contracting opportunities, while providing for residents of the countries where the goods and services are procured – also provide significant opportunities for small and large businesses who would seek to provide those goods and services – whether domestic or foreign.
Ghanaian public procurement represents a sizeable portion of the economy
The size of the global public procurement market is estimated to be approximately $13 trillion USD per year. While the United States, China, member states of the European Union — and other large economies — account for a large percentage of this total, a substantial amount of public procurement also occurs in smaller economies, including Ghana – which in 2017 spent $5,330,916,384 on public procurement, accounting for approximately 9% of the country’s overall GDP that year of $58,996,776,244.
It is estimated that up to 14% of the country’s GDP is now currently spent on public procurement. Further, public procurement in Ghana accounts for approximately 24% of total imports – helping to build roads, schools, hospitals, and other key amenities. Specific contracting opportunities arise and change on a regular basis, and it is advisable to monitor them regularly to identify potential opportunities which may be of interest to your organisation. Overall, the public procurement environment in Ghana is a dynamic, competitive but favourable environment for foreign companies.
Ghanaian public procurement: The regulatory regime
Ghana’s public procurement system is regulated by The Public Procurement Act 2003, (Act 663) as amended by (Act 914). Among the key provisions contained in the act are the procedures to be followed between government and business in the contracting of goods and services by the government. The Act stipulates that all procurement by the government must be conducted by the Public Procurement Authority (PPA). The PPA’s major objectives are securing judicious economic and efficient use of the state’s resources – while also ensuring fairness, transparency in a non-discriminatory environment.
Encouraging local firms to participate
The Act requires the government to assist local businesses participate in the tendering process as a means to ensure the best local firms can participate fully and help drive the overall efficiency of the economy — by encouraging price competition and more local participation in the process. Ultimately, the government seeks to access high quality goods and services from the best contractors at the lowest prices and most favourable terms,
The Act details the requirements to become a bidder in tenders and the process itself is seen to promote local businesses.
Transparency and fairness are essential
Pursuant to the Act, transparency and fairness are vital requirements for all competing in the public procurement process. This encourages parties to become aware of and become compliant with all laws and regulations related to the process.
Criterion for winning tenders
Bids for government contracts are assessed by evaluating lowest tender as well as the presence of local bidders, where applicable. The quality of the materials, labour, works or services and the economic development potential which they offer – including investment in the Ghanaian economy, the support of local employment and domestic suppliers, the transfer of technology and the development of managerial, operational, and scientific skills – are all seen to be important to winning bidders.
The market for government contracts for foreign companies in Ghana is a favourable one. Ghana’s public procurement market represents a sizeable element of the country’s overall GDP. Foreign companies are encouraged to bid on public sector contracts, while also seeking to support the participation in the process of local vendors – while contributing to the overall goals of the country’s economic health and progress.
How CQ Legal can help
CQ Legal provides comprehensive legal and strategic assistance to foreign companies seeking to successfully enter or expand in the Ghanaian public procurement market. We would welcome the opportunity to discuss your interest and needs with you. Please complete the form below to arrange a discussion with us. We look forward to speaking with you.
Cynthia Quarcoo is the Founder and Managing Partner of CQ Legal & Consulting.