FfD4 Countdown: How Public Procurement Can Help Drive Sustainable Development

Nevertheless, this is a crucial topic. With a decline in official development assistance and significant debt levels among low-income countries, the pressure for governments to deliver on the United Nations’ Sustainable Development Goals (SDGs) with limited resources is growing. This makes it even more important that available resources are efficiently spent in ways that align with development, climate, and nature goals.

Public procurement refers to how governments and state-owned companies purchase goods, services, and infrastructure projects. It is a major economic force: in emerging economies, it accounts for 15%–30% of total gross domestic product. This means up to a third of a country’s economic activity is driven by government spending.

This purchasing power gives governments a unique opportunity to lead by example and drive transformative change. By leveraging their vast purchasing power, governments can set ambitious sustainability benchmarks, stimulate innovation, and shape markets toward greener, more socially responsible practices. This ultimately ensures that taxpayers get the “biggest bang for their buck” and that procurement delivers value for money.

Despite its importance, procurement remains sidelined in international efforts to finance the SDGs. As we approach the FfD4 conference, countries are failing to give it the attention it deserves.

The current draft outcome document, on which countries will agree in June, suggests improving the transparency and oversight of government spending. While this is an important first step, countries should recognize that procurement is not merely a compliance-driven process, but a strategic policy tool to deliver the SDGs. It should also ensure that digital systems are implemented to support countries in making sustainable procurement choices.

How can countries leverage public procurement for sustainability? 

Public procurement is governments’ number one corruption risk, comprising 57% of all foreign bribery cases, and often falls short of delivering the sustainable development agenda due to systemic inefficiencies, lack of capacity, and a predominant practice of awarding public contracts based on the lowest price. Inefficient spending is often the result of corruption, lack of oversight, and outdated methods, like manual systems and paper-based workflows that can lead to delays and errors.

As a result, governments waste an estimated 1 trillion USD a year on inefficient or shortsighted procurement practices, money that isn’t spent on essential services like health care or education.

Reforms are necessary to ensure that countries prioritize value-driven procurement practices and enhance transparency, including through the adoption of digital tools.

Enhancing the Oversight and Transparency of Procurement Through E-Procurement and Open Data

According to the Copenhagen Consensus Centre, a full e-procurement system is a top 10 investment for a country to achieve the SDGs. Their study suggests that for an average low-income economy, the benefit-cost ratio for an e-government procurement system is 8 to 58, meaning that each dollar invested in the system yields 8 to 58 dollars in benefits. The ratio rises from 142 to 473 for a lower-middle-income economy.

Too often, however, when procurement systems are digitized, governments simply move slow, bureaucratic, paper-based processes online or publish non-machine-readable PDFs. Instead, digitization is an opportunity to transform public procurement into a smart, efficient, data-driven process that reveals how public money is spent. When shared as open data, it enables citizens to monitor, visualize, and influence funding decisions.

For example, patient groups Positive Initiative and 100% Life have helped governments in Moldova and Ukraine negotiate cheaper prices for critical HIV and hepatitis drugs by combining medicines procurement data with treatment expertise and patient experience. In Assam, India, Civic Data Labs used procurement, income, and flood data to reveal that infrastructure investments favoured vocal communities over those most in need—and helped correct the imbalance.

Raising ever more capital for development is not enough. In today’s economic context, we must ensure every dollar, euro, peso, or yen is well spent for maximum impact. After all, we can only manage and monitor what we have the open data to measure.

Raising Awareness and Embedding Sustainable Procurement in Policy Frameworks

Recent research from the International Institute for Sustainable Development focused on green procurement practices and, based on the state of public procurement in Indonesia, India, and South Africa, shows that countries need to raise awareness of sustainable procurement practices and embed them in their policy frameworks. Countries should:

• create a solid legal basis and show a clear commitment to sustainable public procurement;
• raise awareness and skills for sustainable public procurement, including how to introduce sustainability in technical specifications, how to identify the most sustainable bid and bidder, and how to ensure compliance with sustainability requirements. This can be achieved by setting up competence centres with dedicated training for government officials, and market participants/suppliers;
• develop procurement policies and strategies that prioritize performance-based models, where payments are linked to outcomes linked to development objectives, and assess the full life-cycle costs of purchases;
• address financial barriers by integrating sustainable public procurement into budget planning and overarching public financial management, tapping into international support.

By highlighting procurement’s role in sustainability at FfD4, countries can raise awareness and bring the issue into policy discussions. This could also prompt action from key players like multilateral development banks, which fund infrastructure in developing countries and could be instrumental in leading the shift to sustainable, climate-friendly practices.