Posted: October 7th, 2022

Public Procurement as a Driver of Economic Growth for Local Industries

Thanks for a good job so far. The recommendations in chapter 5 must be SMART (Specific, Measurable, Achievable, Realistic and Time bound). Thank you
Dissertation in Progress

by

University of Salford, Manchester / Robert Kennedy College

Topic: Public Procurement as a Driver of Economic Growth for Local Industries in Developing Countries. (Case Study of Nigeria)
CHAPTER 5: DISCUSSION
This qualitative case study research aimed to understand the role of public procurement in being a driver of economic growth for local industries in developing countries with a focus on Nigeria. This chapter includes discussing the summary results from the preceding chapter, significant findings related to the research questions, and the practical implications from this research to be used by various stakeholders that work to develop the local industries within developing economically and streamlining the public procurement systems. This chapter concludes with a discussion of the limitations of the research and the recommendations for future research. This chapter contains discussion and future research possibilities to help answer the research questions:
1. How is procurement linked to economic development in developing countries i.e., Nigeria?
2. Given the Nigerian case, how does Public procurement impact economic growth in local industries?
3. What are the challenges that Nigeria faces when it comes to government procurement, and how does this affect industrialization?
Summary of Findings
This research paper’s objective was to examine the relationship between public procurement and economic growth for local industries in developing countries. It was evident that public procurement plays a fundamental role in boosting economic growth for the local industries. Streamlined public procurement systems ensure that the local industries gain access to government contracts consistently, creating a demand for their products and services hence creating employment opportunities, boosting innovative capacities, and adopting flexible and responsive approaches to the dynamic economic needs in their respective societies. However, as illustrated by the Nigerian case, the local industries in these developing countries have to deal with the absence of robust public procurement systems, which consecutively leads them to lose out on the economic benefits. While these developing countries’ governments do have the will to have their local industries grow economically, their systems fail extensively in demonstrating it. Issues such as the lack of enforcement measures for the established Public Procurement Regulations, corruption and bribery in the public offices, lack of awareness on government contracts among the local industries since the civil servants hold back the information, and other procurement capacity issues are hindering blocks to the economic growth of local industries. 6herefore, despite an understanding that public procurement systems are a fundamental tool in driving economic growth for local enterprises in developing countries, the numerous challenges continue to prevent this objective’s achievement.
Major Assignment help – Discussion Findings Concerning the Research Questions
Research Question One: How is procurement linked to economic development in developing countries i.e., Nigeria?
As illustrated by Nigeria, economic growth encompasses the proper control and management of public resources in developing countries. In relation to public procurement, the government must implement strategies and measures that will ensure government contracts are awarded and undertaken at the most optimal resource level and competitiveness. These resources include human resources, financial resources, and time. The governments are required to have measures to improve their efficiencies in managing public finance resources. Sufficient public financial management is actually at the heart of good governance. To this effect, effective public procurement has links to the three pillars of productive and successful governance that are increasing the value for money, improvements in the delivery of public services, and the establishment of an enabling environment for the private sector’s growth. Therefore, to ensure that procurement does boost economic development, then the developing country has to have proper governance, which starts from the development and enforcement of regulatory frameworks.
Generally, many developing countries would establish public procurement regulatory reforms to guide them in enhancing these systems. In respect to Nigeria, it implemented the Public Procurement of 2007 enforced by the Bureaus of Public Procurement, Nigeria’s Public Procurement Regulation Authority. Through these regulations, the country has been able to reduce corruption levels in the country. The primary stakeholders have an understanding of what is required of them when it comes to government contracts. These Include the pricing standards, value for money, competitiveness, transparency, accountability, and professionalism from the public procurement sector officials. The way public procurement is executed within the developing country reflects the level of social responsibility.
Similarly, the governance approaches encompassing citizens’ participation can trigger more pertinent, amenable, and productive policies, budgets, and services in the governments. To this effect, the more a country implements significant steps and reforms in public procurement, the closer the country moves to develop itself economically in numerous aspects. It becomes a country with an expanded capacity among its involved stakeholders, better resources, and quality interactions between the private and public sectors and exchange experiences from global partners.

Research Question Two: Given the Nigerian case, how does Public procurement impact economic growth in local industries?
For the economic growth of local industries with public procurement as one of its essential tools, the latter systems must be conducted transparently, with accountability and having a substantial voice in their governments. In developing countries, they spend an estimated 50% of their annual budgets on the procurement of products and services. Therefore, public procurement procedures do play a significant function in the economic growth of their local industries. This is determined by whether the government chooses to purchase these products from the local industries. To achieve the desired economic growth in these local industries, measures such as quota in particular government contracts and set-asides have proven necessary to reach as many local sectors as possible. Considering local industries’ capacities, government contracts must enlist an important qualification criterion that local initiatives can meet.
It is the government’s responsibility to see its locals grow, and these interests need to be above meeting international interests. Therefore, even if it would include the government having preferential treatment measures for the local industries, it ensures that the latter can grow economically. Nonetheless, Nigeria has also entered into trade agreements such as the World Trade Organizations, which call for equity when awarding foreign contracts. They indicate that a member country needs to be fair to both local and foreign contracting parties in their procurement measures and national economic policies. This becomes a challenge to the developing country, trying to strike a balance in ensuring it meets its objectives. However, its local industries’ economic growth development depends on the extent to which the government is ready to invest in them for their growth. This involves the government ensuring that the local industries have the funds to increase their production capacities, improve their innovation levels, and develop skills among its human resources and improvements in their competitive bidding processes. Proper investments in these factors ensure local industries can compete with other sectors and gain access to government contracts adequately.

Research Question Three: What are the challenges Nigeria faces when it comes to government procurement, and how does this affect industrialization?
The challenges facing developing countries, as illustrated by Nigeria, are numerous such that the states have a long way to go in terms of ensuring that public procurement is achieving a positive impact on industrialization. Notably, these challenges can be categorized into three: policymakers lacking the fundamental understanding of procurement systems, the reasons for transparency, accountability, and integrity, and the appropriate procedures. The second category is that the procurement reforms failed to be considered a collective action challenge that requires both the private sector’s input. In Nigeria, the public sector, especially the systems, has ensured that the public receives very minimal information on government contracts, limiting their engagement. The local industries’ lack of engagement means that government contracts’ impact on their economic growth is further restricted.
The third challenge is failing to understand that public procurement or procurement functions, in general, have an impact beyond procurement operations. Government contracts primarily deal with delivering public services such as education, health, environmental protection, and energy. Each of these sectors has its own different needs, such that procurement systems will need to be undertaken in a particular manner to achieve them. However, the developing countries will have extensive bureaucracies married with corruption and other malpractices that fail to meet the primary consumer of services’ complex needs. While the states will have established procurement law reforms, their enforcement mechanisms are the problem, yet they would handle the three categories’ issues. Its effectiveness determines a country’s industrial growth in handling the fundamental processes such as public procurement in the governments and their interaction with their private sector.
Research Implications
Nigeria’s experience in relation to public procurement illustrates a struggling system that cannot cope with the increasing demands of a developing economy. Comprehensive public procurement law is hence necessary for reinforcing government policies. Nonetheless, a solution to these systems goes beyond having the respective law in place that supports regulations. Guidelines and standard bidding documentation. This challenge will be handled by establishing a competent institutional framework that will address enforcement, capacity monitoring, and the system’s developmental requirements.
In Nigeria, the Bureau of Public Procurement needs to be established as a competent institutional framework that can coordinate with various stakeholders to promote transparency and accountability and reduce the malpractices. The institution is required to develop the rule of law, improve the local industries’ investment climate, ensure the implementation of e-government in the public and private sector, enhance the delivery of services, and improve public financial management structures. The regulatory authority is mandated to enforce mechanisms that will ensure that appropriate procurement reforms integrate with the complementary efforts s focussed on improving the management of finances. To this effect, public procurement is developed into becoming a mainstream element in the general financial management system, fundamental to the overall economic development.
Additionally, the authority needs to develop an effective system for monitoring and evaluating procurement procedures and techniques. These evaluations are done against statistical information concerned with the type and value of the purchasing agreement, together with the process itself. Together with the findings from audits and special investigations dealing with identified complaints and other information, these evaluation reports should avail an essential strategy to detect wrongdoings and irregularities. Their identification prompts enforcement of counter-reactive measures that mitigate their negative impact on industrialization. Ultimately, the authority will have achieved transparency, accountability, and integrity, especially when all stakeholders are involved in each step of the process and air their complaints. The system needs to determine the risks and vulnerabilities present in each stage of the public procurement system and ensure they have the right measures to handle them in case of their occurrence. Furthermore, any malpractices identified during the process should have corrective mechanisms that will also prevent further recurrence.
Notably, scholars of procurement reforms in developing countries have stressed the significance of constant political commitment and support from the highest government levels. Political leadership is required to pass laws and demonstrate that all government forces will be utilized to make public procurement a success for the public and private sectors.
Research Limitations
In establishing this study, the extensive literature may have been limited in providing sufficient information to help policymakers recognize how best to handle specific procurement challenges. The researcher identifies that development-focused research will have considered the institutional environment prevailing in developing countries and will link purchasing concerns to the greater development agenda. This will also be set off by an enforcement strategy that will encourage informational exchange on outcomes and other policy options to enhance informed decision-making.
Recommendations for Future Research
Considering these research limitations, additional and more comprehensive research is required in the future, especially on the framework agreements and institutions related to public procurement. Framework contractual agreements have also proven successful in improving the public procurement system in sub-Saharan Africa, consisting of developing countries (Agaba & Shipman, 2007). Therefore, stakeholders need to adopt strategic approaches in their countries after implementing public procurement reforms. Nonetheless, this is achieved by understanding these strategic approaches and aligning them with the respective objectives. There is a need for further research to provide adequate data, evidence-based advocacy, and more substantial procurement capacity to aid developing countries in adopting and executing better procurement strategies.

References
Agaba, E., & Shipman, N. (2007). Public procurement reform in developing countries: The Ugandan experience. Advancing Public Procurement: Practices, Innovation, and Knowledge-Sharing, 2(4), 373-391.

Order | Check Discount

Tags: Public Procurement as a Driver of Economic Growth for Local Industries