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Public procurement contributes to national development

Md. Abu Sayed Siddique | Published: June 06, 2017 21:46:36 | Updated: November 11, 2017 12:40:45


Procurement is a key economic and political activity of the government. In general term, any procurement that is done by the public money or to be more specific, by the money from the public exchequer is public procurement. In Bangladesh, 70 per cent of the development budget and 25 per cent of the revenue budget are spent for public procurement.

Following charts show the state of public procurement in development and revenue budget in the country:

The above chart explains that, public procurement contributes to 70 per cent of the development budget in Bangladesh, which has a significant impact on the overall economy of the country. The total development budget was TK 818.08 million in the fiscal year (FY) 2014-15. That means, the budget expenditure for public procurement was approximately TK 572.65 million in FY 2014-15.

Public procurement is the second largest category of expenditure in the revenue budget of the government of Bangladesh.

About 25 per cent of the revenue budget of the Bangladesh government is spent in public procurement and this has a significant influence on the overall economy of the country. The overall revenue receipt in FY 2014-15 was Tk 1,82,9.54 billion which means, the tentative revenue expenditure for public procurement was Tk 45,7.38 billion in that fiscal year.

CONTRIBUTION OF PUBLIC PROCUREMENT TO GDP: Public procurement has a direct influence on the overall gross domestic product (GDP) of Bangladesh. This is explained in the following tables and graphs:

The above table and graph describe that, the contribution of public procurement in the GDP is increasing every year in Bangladesh. In FY 2007-8, its contribution to the GDP was Tk 5458.2 billion, which was Tk 6148 billion, Tk 6943.2 billion and Tk 7969 billion in FY 2008-9, FY 2009-10 and FY 2010-11 respectively. The contribution further increased to Tk 9147.8 billion in the FY 2011-12. 
GOVERNMENT EXPENDITURE IN PUBLIC PROCUREMENT: In every year, A significant amount of government money is expended on public procurement every year. Government expenditure is explained in the following table and graph:

Government expenditure in Bangladesh is increasing every year, which has a direct influence on public procurement. Most of the government expenditure is made for the procurement of the goods and services. As shown in the chart and graph, in the FY 2008-9, the government expenditure was Tk 89,3.16 billion. The expenditure increased to Tk 1,01,521 billion  in the FY 2009-10. In  FY 2010-11 and FY 2011-12, it further increased to Tk 1,28,2.84 billion and Tk 1,52,4.53 billion respectively. In FY 2012-13 the expenditure was Tk 1,74,0.13 billion which was double of the amount of FY 2008-9.

DEVELOPMENT EXPENDITURE AND ITS RELATION WITH PUBLIC PROCUREMENT: Expenditure of development budget for Public Procurement is explained in the following table and graph:

Development expenditure is increasing every year. The lion share of the development expenditure is expended for public procurement. The development expenditure was Tk 21,6.84 billion in FY 2008-9. The expenditure increased to Tk 28,1.15 billion and Tk 35,7.33 billion in FY 2009-10 and FY 2010-11 respectively. The expenditure further increased to Tk 40,6.97 billion in FY 2011-12. The development expenditure was  Tk 53,1.72 billion in FY 2012-13 which is more than double of the amount of FY 2012-13. The increasing trend of development expenditure clearly signifies the importance of public procurement in Bangladesh.
PUBLIC PROCUREMENT EXPENDITURE: Government expenditure on public procurement is explained in the following table and graph:

The above table and graph shows the importance of public procurement in Bangladesh in relation to the tentative expenditure of public procurement. It is seen from the table and the graph that, the expenditure in FY 2007-2008 was Tk 1091.64 billion which increased to Tk 1229.60 billion in FY 2008-2009. The expenditure increased to Tk 1388.60 billion and Tk 1593.40 billion in FY 2009-10 and FY 2010-11 respectively. The expenditure for public procurement further increased to Tk 1829.56 billion in FY 2011-12.  
In Bangladesh, public procurement contributes directly to the development of the country. It ensures timely delivery of goods to the public like construction of the roads, bridges and infrastructural development. Public procurement provides lots of job opportunities to the people directly and indirectly. It facilitates many firms, factories and organisations to participate in tenders for providing their goods and services, and as such it ensures social protection in the country. Public procurement ensures macro-economic development. It also contributes to the infrastructural development, human development, promoting good governance, and productivity and efficiency in qscience and technology. The procurement by different government agencies has an influence on citizens either as users of the products or as suppliers of the products or at least as tax payers. 
Unfortunately, in developing countries, including Bangladesh, public procurement is not a subject of interest to the general people. Since a huge amount of money is involved in public procurement and the money comes from the public, public procurement and its whole process need to be understood by all stakeholders including the professionals, suppliers, academicians and the general public. 
Dr. Md. Abu Sayed Siddique serves in the Bangladesh Army as a Brigadier General. 
siddique120@yahoo.com

 

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