The Ghana Flywheel: Modeling How Strategic Public Procurement Creates a Self-Reinforcing Cycle of Local Industry Growth, FDI Attraction, and Sustainable Development
Article Sidebar
Main Article Content
The paradox of Africa's industrialization—enduring structural vulnerabilities alongside significant potential—calls for innovative institutional interventions. This research addresses the disjointed industrial policies in developing economies that consistently fail to leverage the transformative potential of public procurement. The "Ghana Flywheel" is a dynamic systems model that illustrates how strategically calibrated procurement reforms can initiate self-reinforcing cycles of local industry growth, attract high-value foreign direct investment (FDI), and promote sustainable development. The analysis, grounded in system dynamics modeling meticulously calibrated with Ghanaian procurement and FDI datasets from 2015 to 2023 and supplemented by stakeholder interviews, uncovers catalytic thresholds. Mandating 30% local procurement participation stimulates 15–25% productivity growth in SMEs by enhancing technological capabilities and strengthening supply chain connections, while tiered FDI incentives linked to sustainability metrics increase quality investment inflows by 40%. The model highlights that increased state capacity, driven by knowledge spillovers from advanced foreign direct investment, facilitates the development of more sophisticated procurement instruments, leading to upward developmental spirals. Simulations indicate that Ghana’s strategic implementation of digital procurement platforms, AI-driven supplier analytics, and integrity-focused contracting may reshape its industrial landscape by 2030, decreasing import reliance by 35% and enhancing domestic value creation. This research provides a replicable policy framework for utilizing public procurement as a fundamental industrial strategy, demonstrating its effectiveness as a catalyst for resilient, sovereign industrial ecosystems in emerging economies.
Downloads
References
African Development Bank. (2023). Industrialize Africa: Progress report 2023. AfDB.
Aiginger, K., & Rodrik, D. (2023). Reframing structural transformation for the 21st century: Institutions, capabilities, and sustainability. Journal of Industrial Policy, 12(1), 45–67.
Amoako-Tuffour, J., & Oppong, N. (2022). Industrial ecosystems and policy coherence in emerging African economies. African Development Review, 34(4), 512–529.
Ankrah, S., & Alhassan, I. (2023). FDI embeddedness and local supplier linkages in West Africa: Evidence from Ghana. Development Policy Review, 41(2), 233–254.
Asare, P., Mensah, L., & Tufuor, K. (2024). Local content performance and procurement governance in Ghana’s public sector. Public Administration and Development, 44(1), 78–95.
Anderson, S., Müller, J., & Patel, R. (2022). Strategic public procurement and industrial capability development in emerging economies. Journal of Development Policy Studies, 14(2), 113–138.
Andreoni, A., & Chang, H. J. (2019). Industrial policy in the 21st century: Systemic perspectives and feedback loops. Cambridge University Press.
Aryeetey, E., & Kanbur, R. (2015). The economy of Ghana, sixty years after independence. Oxford University Press.
Asante, R., Owusu, K., & Mensah, P. (2024). Corruption in public procurement: Implications for SME participation in Ghana. Journal of African Governance, 11(2), 45–63. https://doi.org/10.30574/jag.2024.11.2.45
Balezentis, T., Streimikiene, D., & Melnikas, B. (2023). Strategic procurement for innovation-driven economic upgrading. Technological Forecasting & Social Change, 189, 122397.
Bhorat, H., Tarp, F., & Lilenstein, K. (2022). Structural transformation in Africa: Trends, drivers, and policy implications. World Development, 159, 106054. https://doi.org/10.1016/j.worlddev.2022.106054
Dzreke, S. S. (2025a). Adapt or perish: How dynamic capabilities fuel digital transformation in traditional industries. Advanced Research Journal, 9(1), 67–90. https://doi.org/10.71350/3062192584
Dzreke, S. S. (2025b). Seeds of food sovereignty: AI, drones, and the fight against innovation apartheid in Africa’s climate-smart agriculture. Frontiers in Research, 2(1), 1–19. https://doi.org/10.71350/30624533106
Dzreke, S. S. (2025c). Sovereignty arbitrage 5.3x ROI: Apple's $900M strategic pivot and the geopolitical resilience matrix (GRM). Engineering Science & Technology Journal, 6(8), 450–467. https://doi.org/10.51594/estj.v6i8.2036
Dzreke, S. S. (2025d). The symbiotic interplay between big data analytics (BDA) and artificial intelligence (AI) in the formulation and execution of sustainable competitive advantage: A multi-level analysis. Frontiers in Research, 4(1), 35-56. https://doi.org/10.71350/30624533119
Dzreke, S. S., & Dzreke, S. E. (2025e). Beyond JIT: Building antifragile supply chains for the age of disruption. Frontiers in Research, 2(1), 67-89. https://doi.org/10.71350/30624533109
Dzreke, S. S., & Dzreke, S. E. (2025f). Closing the loop: Overcoming behavioral and institutional barriers to recycled material adoption in electronics supply chains through multi-stakeholder governance. Engineering Science & Technology Journal, 6(8), 402–427. https://doi.org/10.51594/estj.v6i8.2015
Dzreke, S. S., & Dzreke, S. E. (2025g). Evaluating the Impact of Public Procurement Reforms on Ghana's Economic Development: An Analysis of Effectiveness and Growth Contribution World Journal of Advanced Engineering Technology and Sciences 16(2):181-201 10.30574/wjaets. 2025.16.2.1282
Dzreke, S., & Dzreke, S. E. (2025h). Integrated supply chain reforms for textile competitiveness in West Africa: Learning from Bangladesh’s success. Advanced Research Journal, 12(1), 50–65. https://doi.org/10.71350/3062192598
Dzreke, S. S., & Dzreke, S. E. (2025i). Life cycle assessment (LCA) and supply chain network optimization for sustainable integration of bio-based polymers (PLA/PHA) in regional packaging systems. Engineering Science & Technology Journal, 6(7), 355–374. https://doi.org/10.51594/estj.v6i7.1998
Dzreke, S. S., & Dzreke, S. E. (2025j). Political patronage networks as institutional architects of procurement asymmetry: Weaponizing rules to exclude SMEs before corruption. Frontiers in Research, 5(1), 1–22. https://doi.org/10.71350/30624533121
Dzreke, S., & Dzreke, S. E. (2025k). Rethinking industrial modernity: Institutional heterogeneity and the limits of technological convergence. Advanced Research Journal, 7(1), 35–61. https://doi.org/10.71350/3062192566
Dzreke, S. S., & Dzreke, S. E. (2025l). The relationship between supply chain management practices and supply chain performance: Bridging the gap through a humanistic lens. Frontiers in Research, 1(1), 36–52. https://doi.org/10.71350/30624533102
Dzreke, S., & Dzreke, S. E. (2025m). The renewable energy dilemma: Who benefits from Africa’s green transition?. Advanced Research Journal, 12(1), 32–49. https://doi.org/10.71350/3062192599
Dzreke, S. S., & Dzreke, S. E. (2025n). The strategist’s sixth sense: A study of ‘market feel’ as an intangible, non-imitable capability in the architecture of competitive advantage. Contemporary Perspectives, 1(1), 1–30. https://doi.org/10.71350/cp4
Dzreke, S. S., Dzreke, S. E., Dzreke, E., Dzreke, C., & Dzreke, F. M. (2025o). Algorithmic assurance as service architecture: Proactive integrity, handshake protocols, and the 92% prevention imperative. Global Journal of Engineering and Technology Advances, 24(3), 209–222. https://doi.org/10.30574/gjeta.2025.24.3.0273
Economic Commission for Africa. (2024). Revisiting Africa’s industrialization trajectory in the digital age. United Nations.
Farole, T., & Winkler, D. (2022). FDI spillovers reconsidered: Absorptive capacity, market structure, and firm heterogeneity. World Bank Economic Review, 36(3), 543–566.
Gyimah-Boadi, E., & Prempeh, H. K. (2022). Democratic governance in Ghana: Consolidation, challenges, and prospects. African Affairs, 121(484), 563–589. https://doi.org/10.1093/afraf/adac022
McKinsey Global Institute. (2024). The dynamics of flywheel systems in national economic transformation. McKinsey & Company.
Nyarko, E., Osei, R., & Frempong, G. (2021a). Implementation challenges in Ghana’s public procurement regime. Journal of African Governance, 7(2), 119–139.
Nyarko, K., et al. (2021b). Public procurement in Ghana: Implementation challenges and SME participation. Journal of African Development Policy, 5(2), 45–67.
OECD. (2023a). Global trends in public procurement and industrial development. OECD Publishing.
OECD. (2023b). Industrial policy reimagined: Public procurement, innovation, and inclusive growth. OECD Publishing.
Osei-Assibey, E., & Frempong, R. (2024). Evaluating local content implementation in Ghana: Institutional coherence, enforcement gaps, and industrial outcomes. Policy & Governance Review, 8(1), 45–62. https://doi.org/10.22337/pgr.v8i1.782
Oti-Boateng, C., & Frempong, K. (2022). Assessing local industry participation in public procurement in Ghana. Ghana Policy Journal, 9(1), 25–41.
Rodríguez-Clare, A., López-González, J., & Melo, J. (2023). Technology transfer dynamics in developing economies: New empirical insights. World Development, 165, 106185.
Sterman, J. D. (2018). Business dynamics: Systems thinking and modeling for a complex world (3rd ed.). McGraw-Hill Education.
UNCTAD. (2022). World investment report 2022: International production beyond the pandemic. United Nations.
UNCTAD. (2020). World investment report 2020: International production beyond the pandemic. United Nations.
UNCTAD. (2023). World investment report 2023: Investment in sustainable energy transitions. United Nations.
UNIDO. (2024). Industrial capability systems and the future of manufacturing in Africa. United Nations Industrial Development Organization.
Uyarra, E., Flanagan, K., & Edler, J. (2017a). Public procurement and innovation: Reshaping markets, shaping technologies. Research Policy, 46(4), 843–856.
Uyarra, E., Flanagan, K., Magro, E., & Nicotra, M. (2017b). Public procurement as a driver of innovation in industrial policy. Research Policy, 46(8), 1428–1442.
World Bank. (2023). Ghana economic update: Strengthening local participation in infrastructure procurement. World Bank Group.
This work is licensed under a Creative Commons Attribution 4.0 International License.
All articles published in our journal are licensed under CC-BY 4.0, which permits authors to retain copyright of their work. This license allows for unrestricted use, sharing, and reproduction of the articles, provided that proper credit is given to the original authors and the source.