The Public Procurement Market as a Platform for SME and National Economic Growth

Abstract

Economic development reflects in the social and economic progress of a nation’s citizenry and is largely influenced by economic growth depicted by increased employment, improved living standards and subsequent GDP growth. Most governments directly employ only a minute percentage of the citizenry of employable age so see growth of the private business sector particularly SMEs as a catalyst for economic growth. The study focuses on SMEs and the public procurement market because SMEs contribute to local economies, by employing more labour per unit capital than large enterprises and the public procurement market is recognized to be the largest single market in most economies and directly under the influence of governments. Governments facilitating access to the public procurement market is seen as a platform for SME survival and growth as SMEs struggle to survive the business environment and collapse before their tenth year. The study thus seeks to assess the business opportunities in the public procurement market, examine the factors that hinder access to and evaluate interventions that can promote SME access to the market. The researcher adopted a combination of exploratory and descriptive research approaches and purposively sampled sixty based on their eligibility to participate in public procurement and who operate from Takoradi, the third largest commercial city and one of two cities with a sea port in Ghana. Primary data was collected through survey questionnaires, and the data collected was analyzed both quantitatively qualitatively. Success rates in SME participation was observed to be low and mainly attributed to a combination of inherent disadvantages by virtue of their size, unfriendly business environment and unfavourable legislation on public procurement. The researcher recommends SME facilitation in areas such as managerial capacity, access to information on public procurement, clarity of legislation, provision of structured schemes such as set-asides and reduction of the administratively disproportionate legislative requirements. It can be concluded from the study that SME growth is crucial to the growth of an economy and the public procurement market is a potential platform for SME access to business and ultimate growth,

Keywords: Public Procurement Market, Small And Medium Enterprises; Economic Growth; Procurement Policy


Article Review Status: Published

Pages: 26-43 (Download PDF)

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