Foreign Aid Procurement Policies of Development Partners in Africa: The Case of Ghana

Research Articles

*. Independent researcher in public procurement, particularly development aid procurement.

INTRODUCTION

Major development projects in many African countries are often financed by external development partners through foreign aid, which is also referred to as development aid. Aid is a significant component of government expenditure in African countries and has funded more than 40 per cent of government expenditure over the last two decades.¹Development aid to Africa supports several development projects, from capital intensive projects such as building infrastructure to low value and basic needs such as educational materials and clean drinking water, which domestic resources are usually inadequate to finance.

For the purpose of this analysis, development aid refers to official development assistance given by foreign governments and governmental agencies (as defined by the Organisation for Economic Cooperation and Development (OECD)) and does not include aid from private organizations.²Development aid can take the form of financial or technical assistance, as discussed below. Aid enables the acquisition of goods and services needed for domestic development projects. Public procurement rules are followed in order to secure these goods and services. These include rules on whether or not to buy the goods and services from international or domestic markets. They also involve decisions on how to obtain best value for the aid funds.

The size of public procurement in Africa overall is estimated at between 9 and 13 per cent of GDP;³in Ghana, public procurement represents about 17 per cent of GDP.⁴This figure is comparable to that in many other African countries such as Nigeria, Kenya, Malawi and Zambia.⁵Public procurement rules are essential in disbursing aid funds in a manner that could achieve specific development objectives, while also balancing the different interests of stakeholders involved in the process. The application of procurement rules is also important in achieving specific objectives, since large sums of money are usually involved in aid procurement and development projects are often complex in nature.

Over the last few decades, many African countries including Ghana, Uganda and Kenya have been reforming their procurement systems in order to improve efficiency in the management of general public finances.⁶These reforms include the adoption of a regulatory framework and policies on capacity building for...