Leveraging public procurement to advance development priorities

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OPINION

By Can. Benson Turamye

Public procurement is increasingly emerging as one of the most powerful instruments through which governments can drive socio-economic transformation. In Uganda, where public spending accounts for the bulk of economic activity, procurement is not merely a technical function; it is a strategic lever for inclusive growth, industrialisation and national development.

Since 2003, the Public Procurement and Disposal of Public Assets Authority (PPDA) has regulated and guided government procuring and disposing entities (PDEs) in the acquisition and disposal of public assets. The enactment of the PPDA Act that year marked a significant reform, replacing the previously centralised procurement system under the Central Tender Board with a decentralised, rules-based framework anchored in transparency, accountability and value for money.

From the construction of health facilities and classrooms to the development of roads, water systems and public infrastructure, effective public procurement continues to determine tangible improvements in public service delivery. Its impact cuts across sectors and directly affects the quality of life of citizens.

What is often understated, however, is the sheer economic weight of public procurement. In Uganda, it represents the single largest source of business opportunities, accounting for approximately 65% of the national budget. This expenditure is largely channelled into capital investments in infrastructure such as roads, buildings and equipment, as well as the procurement of goods and services.

Globally, public procurement is recognised as a critical policy instrument through which governments advance socio-economic objectives within broader development agendas. Uganda is no exception.

Over the years, the Government has undertaken deliberate reforms to position public procurement as a central pillar of the country’s national development framework. Akey focus of these reforms has been inclusivity, particularly the participation of historically marginalised groups such as women, youth and persons with disabilities (PWDs).

This commitment is reflected in Guideline No. 11 of 2024 on reservation schemes, which promotes the participation of registered associations of women, youth and PWDs in public procurement. The guideline requires accounting officers in all PDEs to actively promote inclusivity by reserving at least 15% of their annual procurement budgets for these special interest groups. To enhance transparency and access, PDEs are required to clearly indicate these reserved procurements in their publicly available procurement plans.

The guideline also provides clear value thresholds. For central government PDEs, procurement requirements for supplies, works, consultancy and non-consultancy services valued at not more than sh30m must be reserved for registered associations of women, youth and PWDs. For local government PDEs, the threshold is sh10m. In addition, registered associations under the scheme are exempted from paying bidding fees when obtaining bidding documents, significantly lowering barriers to entry.

These measures are already yielding results. In the last financial year alone, contracts worth sh8.47b were awarded to women, youth and PWD-owned businesses by various PDEs, with women-owned enterprises receiving the largest share. Looking ahead, PDEs have reserved sh22.53b for special interest groups in the financial year 2025/26 procurement plans — a figure expected to rise with sustained enforcement and compliance. PPDA continues to guide and register eligible enterprises to ensure they fully benefit from these reservation schemes.

Beyond inclusivity, the Government has also made decisive strides in promoting local content through public procurement. Local content promotion involves deliberate interventions aimed at growing domestic industries, boosting local production and supporting Ugandan entrepreneurs, ultimately increasing incomes and reducing poverty.

This policy direction was firmly anchored in 2014 with the adoption of the Buy Uganda, Build Uganda policy, whose mission is to promote the production, purchase and consumption of local goods and services. The policy is reinforced by PPDA’s Preference and Reservation Schemes introduced in 2018 and further strengthened by Guideline No. 12 of 2024. Together, these instruments are designed to leverage public spending to develop locally manufactured goods, contractors and consultants.

Reservation schemes under local content policy ring-fence specific procurement opportunities for local providers as a form of affirmative action. They also increase the utilisation of local labour, goods and services in public sector projects. PDEs are required to apply these schemes based on value thresholds, below which foreign participation is restricted. These include road works up to sh45b, other public works up to sh10b, supplies and consultancy services up to sh1b, and non-consultancy services up to sh200m.

As a result, several large government-supported programmes, including the Uganda Intergovernmental Fiscal Transfers Programme, the Uganda Support to Municipal Infrastructure Development (USMID), the Kampala City Roads Rehabilitation Project and the Greater Kampala Metropolitan Area programme have adopted the national procurement system and PPDA rules. Consequently, all consultancy services under these programmes have been contracted to local providers.

Under USMID, 35 out of 38 works contracts valued at sh354.7b were awarded to local providers and their joint ventures. This has translated into an estimated 45% increase in works undertaken by local contractors, significantly enhancing skills transfer, knowledge acquisition and institutional capacity among Ugandan firms.

Furthermore, during the last three years of the previous National Development Plan III, an average of about 35% of total public procurement expenditure was directed to local providers, underscoring procurement’s role in stimulating domestic economic activity.

Going forward, Uganda’s recent growth in agriculture, manufacturing, services and construction can be partly attributed to political stability, sustained infrastructure investment and targeted public procurement reforms. These gains, however, can only be sustained and scaled if all actors, particularly accounting officers, fully discharge their statutory responsibilities.

PPDA’s role, therefore, remains central in ensuring that public procurement is not treated as a routine administrative process, but as a strategic tool to advance Uganda’s development ambitions, including the President’s vision of expanding the economy from $50b to $500b over the next 15 years.

In this regard, public procurement is no longer just about buying goods and services — it is about building an inclusive, resilient and prosperous Ugandan economy.

The writer is the PPDA executive director