African governments spend an average of 17% of GDP on public procurement, making it a powerful tool for economic development, industrial growth and job creation (World Bank, The Expanding Role of Public Procurement in Africa’s Economic Development).
As localisation efforts accelerate across the continent, procurement is increasingly being used to strengthen local industries, support small businesses and create jobs.
Yet although developmental procurement has become a central policy objective across Africa, the challenge remains to strike the right balance between economic development goals, competition, and value for money.
“Procurement has grown far beyond a purchasing function,” says Paul Vos, Regional Managing Director of the Chartered Institute of Procurement & Supply (CIPS) Southern Africa. “Governments increasingly recognise that procurement spending can shape where investment flows, how industries develop and who takes part in economic activity.”
Across Africa, localisation policies, preferential procurement requirements, and supplier development programmes are opening opportunities previously out of reach for local manufacturers, SMMEs, and historically disadvantaged businesses.
The rationale is straightforward: the World Bank sees public procurement as a powerful tool to stimulate private sector growth, create jobs, and advance economic development. However, Vos argues that developmental procurement should not be assessed solely by the number of contracts awarded to local suppliers.
“The real objective is to build businesses that are competitive, sustainable and able to succeed beyond preferential procurement programmes,” he says. “Success comes when suppliers can compete on quality, innovation and capability—not just because they qualify for a particular policy preference.”
Critics have long argued that poorly designed localisation requirements can raise costs, limit competition, and distort markets. Vos argues that the answer is not to choose between localisation and value for money, but to create procurement frameworks that deliver both.
“Developmental outcomes may sometimes require short-term trade-offs, but those should be transparent, measurable and proportionate,” he says. “The goal isn’t protectionism; it’s to build more competitive local industries over time.”
Finding the right balance between developmental impact, competition, and value for money remains a defining challenge in developmental procurement. For Vos, the solution is less about protecting suppliers and more about making them competitive.
Building supplier capability remains a major challenge. For many smaller businesses, gaining access to contracts is only one part of the equation. Funding constraints, infrastructure gaps, limited market access, and workforce development needs can all hinder growth.
Vos believes supplier development is a shared responsibility of government, corporates, and procurement professionals. The most successful developmental procurement programmes pair clear objectives with long-term supplier partnerships, ensuring procurement spend delivers sustainable economic impact.
“Businesses gain a competitive edge through mentorship, knowledge transfer, and greater certainty about future demand,” he says.
This shift requires organisations to move beyond procurement approaches focused on compliance, scorecards and reporting requirements. “Too often success is measured by whether targets were achieved on paper rather than whether suppliers became stronger businesses,” says Vos. “Compliance is important, but it should be the starting point, not the end goal.”
Instead, organisations should assess whether procurement programmes create lasting jobs, help suppliers grow, boost productivity, and enable businesses to participate more effectively in broader supply networks.
Vos argues that one of the most important measures is whether suppliers continue to thrive well after the original contract ends. If businesses remain dependent on a single programme or customer, the developmental impact is limited. “The true test is whether they can compete successfully long after the original contract ends.”
Looking ahead, Vos says the next phase of developmental procurement should focus not only on strengthening domestic industries, but also on preparing suppliers to compete in markets across Africa as regional trade integration accelerates through initiatives such as the African Continental Free Trade Area (AfCFTA).
“The focus now needs to move from compliance-driven localisation to capability-driven localisation,” he says. “Success will ultimately be measured not by how much money is spent locally, but by whether procurement builds stronger businesses, more resilient industries and sustainable economic participation.”
This outcome-focused approach reflects a broader global shift in how public procurement is viewed, not merely as a purchasing function, but as a driver of economic development.
“The true legacy of developmental procurement isn’t the contract itself, but whether it helps build businesses that keep growing, creating jobs, and contributing to the economy for years to come.”
