The Ghana Flywheel: Modeling How Strategic Public Procurement Creates a Self-Reinforcing Cycle of Local Industry Growth, FDI Attraction, and Sustainable Development

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.

Ghana Flywheel Model, Strategic Public Procurement, Industrial Policy, Foreign Direct Investment, System Dynamics, Sustainable Development

1. African Development Bank. (2023). Industrialize Africa: Progress report 2023. AfDB. [Google Scholar] [Crossref]

2. Aiginger, K., & Rodrik, D. (2023). Reframing structural transformation for the 21st century: Institutions, capabilities, and sustainability. Journal of Industrial Policy, 12(1), 45–67. [Google Scholar] [Crossref]

3. Amoako-Tuffour, J., & Oppong, N. (2022). Industrial ecosystems and policy coherence in emerging African economies. African Development Review, 34(4), 512–529. [Google Scholar] [Crossref]

4. Ankrah, S., & Alhassan, I. (2023). FDI embeddedness and local supplier linkages in West Africa: Evidence from Ghana. Development Policy Review, 41(2), 233–254. [Google Scholar] [Crossref]

5. 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. [Google Scholar] [Crossref]

6. 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. [Google Scholar] [Crossref]

7. Andreoni, A., & Chang, H. J. (2019). Industrial policy in the 21st century: Systemic perspectives and feedback loops. Cambridge University Press. [Google Scholar] [Crossref]

8. Aryeetey, E., & Kanbur, R. (2015). The economy of Ghana, sixty years after independence. Oxford University Press. [Google Scholar] [Crossref]

9. 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 [Google Scholar] [Crossref]

10. Balezentis, T., Streimikiene, D., & Melnikas, B. (2023). Strategic procurement for innovation-driven economic upgrading. Technological Forecasting & Social Change, 189, 122397. [Google Scholar] [Crossref]

11. 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 [Google Scholar] [Crossref]

12. 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 [Google Scholar] [Crossref]

13. 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 [Google Scholar] [Crossref]

14. 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 [Google Scholar] [Crossref]

15. 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 [Google Scholar] [Crossref]

16. 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 [Google Scholar] [Crossref]

17. 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 [Google Scholar] [Crossref]

18. 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 [Google Scholar] [Crossref]

19. 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 [Google Scholar] [Crossref]

20. 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 [Google Scholar] [Crossref]

21. 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 [Google Scholar] [Crossref]

22. 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 [Google Scholar] [Crossref]

23. 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 [Google Scholar] [Crossref]

24. 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 [Google Scholar] [Crossref]

25. 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 [Google Scholar] [Crossref]

26. 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 [Google Scholar] [Crossref]

27. Economic Commission for Africa. (2024). Revisiting Africa’s industrialization trajectory in the digital age. United Nations. [Google Scholar] [Crossref]

28. Farole, T., & Winkler, D. (2022). FDI spillovers reconsidered: Absorptive capacity, market structure, and firm heterogeneity. World Bank Economic Review, 36(3), 543–566. [Google Scholar] [Crossref]

29. 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 [Google Scholar] [Crossref]

30. McKinsey Global Institute. (2024). The dynamics of flywheel systems in national economic transformation. McKinsey & Company. [Google Scholar] [Crossref]

31. Nyarko, E., Osei, R., & Frempong, G. (2021a). Implementation challenges in Ghana’s public procurement regime. Journal of African Governance, 7(2), 119–139. [Google Scholar] [Crossref]

32. Nyarko, K., et al. (2021b). Public procurement in Ghana: Implementation challenges and SME participation. Journal of African Development Policy, 5(2), 45–67. [Google Scholar] [Crossref]

33. OECD. (2023a). Global trends in public procurement and industrial development. OECD Publishing. [Google Scholar] [Crossref]

34. OECD. (2023b). Industrial policy reimagined: Public procurement, innovation, and inclusive growth. OECD Publishing. [Google Scholar] [Crossref]

35. 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 [Google Scholar] [Crossref]

36. Oti-Boateng, C., & Frempong, K. (2022). Assessing local industry participation in public procurement in Ghana. Ghana Policy Journal, 9(1), 25–41. [Google Scholar] [Crossref]

37. Rodríguez-Clare, A., López-González, J., & Melo, J. (2023). Technology transfer dynamics in developing economies: New empirical insights. World Development, 165, 106185. [Google Scholar] [Crossref]

38. Sterman, J. D. (2018). Business dynamics: Systems thinking and modeling for a complex world (3rd ed.). McGraw-Hill Education. [Google Scholar] [Crossref]

39. UNCTAD. (2022). World investment report 2022: International production beyond the pandemic. United Nations. [Google Scholar] [Crossref]

40. UNCTAD. (2020). World investment report 2020: International production beyond the pandemic. United Nations. [Google Scholar] [Crossref]

41. UNCTAD. (2023). World investment report 2023: Investment in sustainable energy transitions. United Nations. [Google Scholar] [Crossref]

42. UNIDO. (2024). Industrial capability systems and the future of manufacturing in Africa. United Nations Industrial Development Organization. [Google Scholar] [Crossref]

43. Uyarra, E., Flanagan, K., & Edler, J. (2017a). Public procurement and innovation: Reshaping markets, shaping technologies. Research Policy, 46(4), 843–856. [Google Scholar] [Crossref]

44. 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. [Google Scholar] [Crossref]

45. World Bank. (2023). Ghana economic update: Strengthening local participation in infrastructure procurement. World Bank Group. [Google Scholar] [Crossref]

• Students' Perception Towards Artificial Intelligence in Higher Education in India
• Strategic Leadership and Cybersecurity Readiness in Digitally Transforming Organisations
• Spatial Distribution of Tourism Infrastructure in Awka, Onitsha and Nnewi Urban Areas of Anambra State.
• Emerging Technologies, Education and Skill Development for A Sustainable Blue Economy in Nigeria.
• Quantum Dot–Based Solar Cells: Advancements, Challenges, and Future Prospects