As Ghana works to accelerate private sector-led economic growth, attention is increasingly turning to the internal mechanics of government administration, specifically, how public funds are spent and who is managing the process.
According to a flagship World Bank study authored by Arturo Herrera Gutierrez, Rita Ramalho, and Tanu Kumar, titled Institutions and Prosperity: Public Institutions for Enabling the Private Sector, the competence and training of public sector personnel are among the most decisive factors determining whether private businesses can thrive.
Globally, approximately 400 million people, representing 11 percent of the global workforce, are employed in the public sector. These officials oversee massive public expenditure, including infrastructure projects, medical equipment purchases, and digital technology rollouts.
The study further reveals that in OECD economies, public procurement alone accounts for an average of 12.7 percent of Gross Domestic Product (GDP).
For Ghana, where state contracts represent a primary driver of activity for local construction firms, suppliers, and small and medium-sized enterprises (SMEs), closing the technical gap in civil service procurement has become an urgent economic policy priority.
The Personnel Link: Why Expertise Matters
A central finding of the World Bank report is that personnel quality in public procurement agencies directly correlates with how easily private companies can do business with the government.
Utilizing data from the Methodology for Assessing Procurement Systems (MAPS), researchers found that countries with higher-quality, better-trained procurement personnel consistently achieve higher scores in contracting ease, even after controlling for national income levels.
“Countries with higher-quality procurement staff consistently report greater ease in contracting with government,” the report highlights.
In Ghana, local contractors and entrepreneurs frequently point to bureaucratic delays, ambiguous tender evaluation processes, and drawn-out contract administration as major obstacles to enterprise growth. The World Bank’s diagnostic framework reveals that such friction is rarely just a software or software-adoption issue; rather, it stems from a deficit in organizational capacity, specifically the skill sets, operational incentives, and management structures of civil service personnel implementing procurement policies.
Beyond Technology: Combining Systems with Governance
Ghana has taken notable strides toward modernizing public purchasing through digital initiatives, including the Ghana Electronic Procurement System (GHANEPS). However, the report cautions that digital tools alone cannot resolve procurement bottlenecks if the underlying human and governance structures remain weak.
The report’s framework divides institutional capacity into two distinct but interdependent dimensions.
The first is the organizational capacity. This includes internal resources, including trained staff, allocation of budgets, information systems, and administrative management
The other is governance capacity, and it embodies the external safeguards that ensure public spending serves the broader public interest, defined by transparency, public accountability, and insulation from political capture.
Crucially, the authors emphasize that neither dimension can function in isolation. “A well-trained staff with strong information systems can still fail if the institution lacks independence. And accountability mechanisms cannot compensate for chronically underfunded agencies or undertrained staff”.
For Ghanaian Ministries, Departments, and Agencies (MDAs), as well as Metropolitan, Municipal, and District Assemblies (MMDAs), this means that rolling out e-procurement platforms must be paired with continuous professional training for procurement officers and strict protection against undue political interference.
As the study reveals, when procurement officers lack technical expertise or operate under political pressure, tender evaluations become unpredictable, leading to delayed project execution, cost overruns, and lost private investment.
Unlocking Private Sector Competitiveness in Ghana
When public procurement works efficiently, it creates a predictable environment where local Ghanaian enterprises can plan, invest, and scale. The World Bank says effective public institutions provide the foundational environment, such as reliable infrastructure, energy access, and legal certainty, that enables private firms to expand and create jobs.
Conversely, inefficient procurement acts as an implicit tax on the private sector. Small local suppliers often bear the brunt of delayed payments and opaque bidding procedures, which strain their working capital and limit their capacity to compete with larger international entities.
Upgrading the capacity of Ghana’s civil servants by professionalizing procurement cadres, aligning evaluation standards with international best practices, and ensuring institutional independence would lower transaction costs for domestic firms and stimulate job creation across local supply chains.
As the World Bank report concludes, the fundamental takeaway for economic policymakers is to appreciate that “When public institutions function effectively, businesses can too.”
