International Journal of Small Business and Entrepreneurship Research (IJSBER)

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The Role of Legal/Regulatory Framework of the Ghana Public Procurement Policy on SME Participation in Public Procurement


Access to public procurement contracts is a challenge for most Small and Medium Enterprises. While most of these challenges are either inherent in the very nature of SMEs or the business environment, there is however a major challenge inherent in government policies which is often ignored, and this is the focus of this study. The study thus seeks to identify the inadequacies in the Public Procurement Act of Ghana that inhibit SME access to public procurement contracts and how supportive legal framework could improve SME access to public procurement opportunities. The researcher used a combination of exploratory and descriptive research approaches and the sample comprised of one hundred and twenty (120) SMEs, purposively sampled for their eligibility to participate in public procurement processes and thirty (30) randomly selected public sector institutions. Primary data was collected through the administration of survey questionnaires, and the data collected was analyzed both quantitatively qualitatively. A major finding is that while the intent of the Ghana Act (Act 663) section 2(t) is to promote local businesses, the provision is administratively disproportionate as it does not take the peculiar characteristics of size, capacity, experience, and financial resources of the SMEs into consideration and so does not provide a level playing field for the different categories of local businesses. It can be concluded that limitations in the procurement and regulatory framework in terms of disproportionate application of requirements affect SME participation and success in winning public procurement contracts and that governments can influence the nature and pace of SME growth through the differential impact of government legislation on firms of different sizes.

Keywords: Legal and Regulatory Framework, Public Procurement, Small and Medium Enterprises

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