Pakistan’s Public Procurement Regime

PIDE Knowledge Brief No. 24:2021
Publication Year : 2021

Governments across the globe are spending a significant portion of their budgets on procurement. Public procurement spending is estimated to account for 15 percent of the world’s GDP. Procurement is predominantly visible in developing countries with active infrastructure and social programs. Any attempt, therefore, to bring fiscal discipline by efficient allocation of resources and then pragmatically spending must consider procurement to be a fundamental part. Gains of a good public procurement framework make available additional resources for development and lead to better outcomes of expenditure by assigning the tasks to the best possible service provider. This eventually has a positive bearing on service delivery. Empirical evidence supports that procurement reforms improve spending efficiency by 1 percent of GDP. This means that this saving could be diverted to other pressing sectors like education, health, and municipal services. Thus, effective public procurement systems can help governments see better value for money, reduce pressure on public budgets, and leave agencies better prepared to invite private investments. Public funds are scarce and governments must invest with intention. Improving public procurement systems contributes to a vibrant private sector, helps governments get the most out of their investments, and supports growth. A developing country like Pakistan annually spends around 20 percent of GDP through this medium. This includes approximately 90 percent budget of public sector enterprises (PSEs). Therefore, it necessitates, without any doubt, that the associated governance structure should be fool proof and user-friendly.