Public Finance Management and Economic Growth: The Case of Public Procurement Systems and Practices in Africa

Abstract

African countries have undertaken various reforms that have significantly changed their governance architecture to ensure good public procurement systems and practices, which are a prerequisite for effective public investment and economic growth. However, they continue to face public finance management challenges as the citizenry continue demanding transparency, accountability, and improved efficiency in managing public finances. This study analyses the status and impact of public procurement systems and practices on economic growth in Africa. It applies statistical approaches on data from the Africa Integrity Indicators Surveys, to examine the status of public procurement systems and practices from 2014 to 2023 based on identified indicators from the surveys. Then it assesses their impact on economic growth using an extended Mankiw et al.’s (1992) version of the Solow model approach. The results show that most of the countries performed relatively poorly over the study period, signifying the prevalence of weak public procurement systems and practices in Africa. They also show that public procurement systems and practices have had a negative impact on economic growth, with the results being more pronounced in natural resource-poor countries. Signifying the need for strong and effective institutions and legal frameworks for public procurement and anti-corruption systems, processes, and practices.