Perceptions versus realities: The role of procurement in Africa’s long-term socio-economic development
Local government procurement practitioners need to recognise the inextricable link between governance, accountability and socio-economic development in South Africa

Confusion surrounding procurement practitioner roles is hampering long-term socio-economic development in Africa

While procurement, as a sub-process of supply chain management, is largely recognised as a catalyst for industrialisation and national and regional development, it is often misunderstood within government, C-Suite, and other policy making corridors in Africa. This has led to a continued focus on short-term cost reduction and profit maximising ‘buying’ practices which have undermined many opportunities that procurement has for long-term developmental gains on the continent.

In trying to overcome such short-term focus the influence of procurement professionals has emerged as important. Responsible for anything from procurement transactions, to bidding, tenders and contract negotiations, procurement professionals are expected to assist organisations around the world to move away from short-term focused buying practices towards the long-term strategic sourcing of goods and services.

The role of the procurement professional is not always clear

Although an increasingly important function of the supply chain management process, in Africa the role of the procurement professional is not always clear. As such, confusion surrounding the purpose of procurement practitioners in executive and policy decision-making, in private boardrooms, in job creation and in SMME development, has led to many chief procurement officers and procurement professionals occupying less influential tactical and operational, rather than strategic functions.

In a recent longitudinal study conducted by PanAvest International and Partners, the procurement attitudes and activities of various public and private practitioners were examined. The study found that although procurement has been globally recognised as playing an essential role in local and regional wide industrialisation, African regional and local purchasing and supplier selection practices continue to lack consistency and long-term focus.

Strategic sourcing still related to price chiselling

While 85% of the practitioners participating in the study agreed that procurement aspects of supply chain management are key to local and regional industrialisation, and 76% believed that it has a direct impact on local economic growth, national development, social stability and SMME growth, 72% of functional practitioners involved in the study were unable to clearly differentiate between buying and procuring. In addition to this, 80% of senior practitioners interviewed saw strategic sourcing largely as a means to price chisel. These findings indicate that despite practitioner comprehension and support of the role of procurement in national and regional development, on the ground practices are not always conducive to development success.

This, the study argues is largely because, whilst corporate executives, policy makers, and practitioners alike generally agree that effective procurement can help with industrial competitiveness, job creation and much needed service delivery quality improvements, Africa continues to be hampered by a dire procurement skills shortage, especially when it comes to executive-level supply chain management and procurement professionals.

Moreover, since the procurement function is still generally viewed as more tactical, operational and administrative, as opposed to a strategic function, inconsistencies related to procurement practitioner expectations continue to blur the lines between best practices.

In this regard, in order to successfully accelerate the roll out of socio-economic programs and support socio-economic growth and development on the continent, the study found that African organisations need to support specialist executive skills development, innovatively adapt supply chain management practices, as well as enact laws aimed at promoting a ‘license to practice culture’ on the continent.

Skilled procurement practitioners are key to socio-economic development on the continent

While policy frameworks and laws related to procurement practices and supply chain management processes will go a long way in facilitating greater procurement related socio-economic development and growth, practitioners need to step up and take responsibility for their role in ensuring procurements influence on development on the continent.

To begin with, practitioners need to view current procurement challenges as an opportunity for growth and expansion of the industry. They need to move away from profit motivated ‘buying’ habits and instead must actively practice a form of long-term strategic procurement. Next, practitioners need to help develop and implement a region wide procurement strategy that is supportive of both organisational performance and industrialisation. Moreover, practitioners should begin to monitor locally owned businesses for supplier development and SMME initiatives and empowerment. This will enable a movement away from externally focused procurement activities and towards support of local goods and service providers. In addition to this, practitioners should try to get involved in skills development initiatives and share their knowledge and experience within and outside of their functional areas. Finally, by joining recognised professional bodies, practitioners can help to ensure a professionalisation of the practice.

In short, although the influence of procurement is steadily gaining momentum in discussions on socio-economic growth and development on the continent, practitioners and professionals active in the field need to lead the way in changing current popular ‘profit’ and ‘cost-cutting’ perceptions and encourage a greater focus on strategic procurement practices.

Prof Douglas Boateng
Prof Douglas Boateng
(MSc, EngD FCILT, FCMI, FIoD, FIC, FIOM FCIPS) Founder AND CEO – Panavest International and partners and President of the Panavest Foundation

Leave a Reply

Your email address will not be published. Required fields are marked *