Public procurement reforms in Ghana: impact on the growth of the local construction industry

Public procurement reform has become a modern phenomenon where various countries are reforming their procurement systems either to make the systems more efficient, transparent, achieve value for money, reduce or eliminate corrupt activities, to meet the requirements of donor countries or to make the system meet the international standards. Some countries also use public procurement reform as a policy tool to address socio-economic issues including the promotion of local sectors and disadvantaged groups. Ghana has not remained stagnant in this regard but has followed suit in reforming its procurement systems to address the weaknesses of the past procurement practices. However, the effectiveness of these reforms in promoting the local construction firms has not been investigated. This research therefore, investigated how the various procurement reforms instituted by the government of Ghana have impacted on the growth of the Ghanaian construction sector. A comprehensive review of the related literature revealed that there is a relationship between public procurement reforms and the growth of the local sectors as various governments in the past have managed to use their procurements levers as policy tools to address the imbalances in the socio-economic development of their citizens. A phenomenological (qualitative) research approach was adopted for this study. Accra, the capital of Ghana was chosen based on its strategic position and also because of massive construction activities currently taking place in the city. Again, many construction firms are also registered and operating in this city. The research instrument used is the interview guide made of both tick box and open ended questions. Other sources of data included archival records such as contracts awarded, the current public procurement regulations, and manuals. It was concluded after the analysis of the findings that, even though public procurement reforms have brought about improved procurement practices, the reforms have failed to have a positive impact on the growth of the local construction industry. The implication is that, the construction industry in Ghana is still dominated by foreign firms executing major government projects to the detriment of the local construction firms thereby stifling their growth. The findings also revealed that local contractors only executive minor works devoid of complexities and mainly engaged as subcontractors by foreign firms on major government projects. The findings also revealed that government has so far not instituted any radical protective laws in the procurement systems to protect the local construction firms. The research has produced a tender evaluation template with protective mechanisms such as awarding points to bidders during the tender evaluation process. The research has also produced tender evaluation formulas for calculating points for bidders and how the successful bidder is arrived at. The study provides recommendations to all stakeholders in the Ghanaian construction industry and proposes that the evaluation criteria produced by this study be used in the public procurement system to help grow the indigenous construction industry