By Taus Muganda Basajjabalaba
Uganda’s decision to adopt collaborative procurement has been welcomed as a significant step toward improving efficiency in public spending. By consolidating the purchase of commonly used goods and services across government institutions, the reform aims to reduce costs, eliminate duplication, and secure better value for taxpayers’ money.
These goals are both necessary and commendable. Public procurement accounts for a substantial share of government expenditure, and any effort to improve efficiency and accountability deserves support. However, as the country transitions to this new procurement model, an important question must be addressed: what impact will collaborative procurement have on small and medium-sized enterprises (SMEs)?
SMEs are the backbone of Uganda’s economy. They create jobs, support household incomes, and contribute significantly to local economic development. For many years, these businesses have actively participated in public procurement by supplying goods and services to ministries, local governments, and public agencies.
Under collaborative procurement, government demand is aggregated into larger contracts that are awarded through a centralized process. While this approach can generate economies of scale and reduce administrative costs, it may also create challenges for smaller businesses. Contracts that were once accessible to local suppliers could become too large for many SMEs to compete for independently.
This does not mean the reform is misguided. On the contrary, collaborative procurement has the potential to improve procurement outcomes and strengthen transparency. The challenge is ensuring that the pursuit of efficiency does not unintentionally exclude smaller enterprises.
To achieve this balance, government should consider measures that support SME participation. Large contracts can be divided into smaller lots where appropriate, enabling local businesses to bid for portions of the work. Encouraging consortium arrangements would also allow SMEs to pool resources and compete collectively. In addition, capacity-building initiatives can help businesses meet the requirements of larger procurement opportunities and adapt to evolving procurement systems.
The rollout of the Electronic Government Procurement (eGP) system presents further opportunities to improve transparency and access. However, smaller firms must be equipped with the skills and knowledge needed to participate effectively in digital procurement platforms.
Ultimately, the success of Uganda’s procurement reset should be measured not only by the money saved but also by its contribution to enterprise growth, job creation, and inclusive economic development.
Dr Taus Muganda Basajjabalaba is a researcher majoring in procurement, innovation and digital transformation
