Smart Contracts as a Tool for Enhancing Public Procurement Transparency in Africa

Abstract

Public procurement in Africa is hindered by systemic corruption, inefficiency, and a lack of accountability, undermining economic growth and public trust. This analysis examines the transformative potential of smart contracts, built on Distributed Ledger Technology (DLT), as an innovative solution to enhance transparency and integrity in the continent\'s procurement systems. The study analyzes how smart contracts, by embedding procurement rules into immutable code, minimize human discretion and create tamper-proof audit trails for processes from bid submission to payment. Drawing on global precedents and emerging African cases (including DLT use in Guinea-Bissau\'s public wage bill), the paper finds that while smart contracts are technically feasible and highly beneficial, their successful adoption is contingent upon overcoming significant structural barriers. These challenges include adapting outdated legal frameworks to recognize the legal personality of contract code, addressing low digital infrastructure compatibility, and managing cultural resistance from officials who benefit from the existing discretionary systems. The paper concludes with key recommendations for African governments, emphasizing the necessity of parallel legal reform, targeted capacity building, and strong political commitment to leverage this technology for achieving Sustainable Development Goal 16 (Peace, Justice, and Strong Institutions).

Introduction

Public procurement is a critical component of governance in Africa, accounting for 15–30% of GDP and serving as the main channel for delivering infrastructure and public services. However, it remains deeply affected by corruption, inefficiency, and weak accountability, with practices like bid-rigging, favoritism, and inflated contracts undermining development and public trust. Despite various reforms—such as procurement laws, oversight bodies, and e-procurement systems—progress has been limited due to fragmented implementation, weak enforcement, and outdated manual processes.

The Promise of Blockchain and Smart Contracts

Blockchain technology offers a potential breakthrough by providing a decentralized, tamper-proof ledger that ensures transparency and accountability. Smart contracts, which are self-executing agreements coded on the blockchain, can automate procurement processes—bid submission, evaluation, contract awards, and payments—reducing human discretion and opportunities for corruption.

Globally, countries like Estonia, Dubai, and Chile have used blockchain to strengthen public service delivery and procurement transparency. In Africa, Kenya, Rwanda, and South Africa are piloting similar initiatives, indicating growing interest in digital governance reforms. These cases suggest that, if supported by appropriate legal and institutional frameworks, smart contracts could transform procurement by making it more transparent, efficient, and fair.

Conceptual and Legal Framework

Blockchain’s key principles—decentralization and immutability—remove single points of control and create a verifiable audit trail. Smart contracts further embed procurement rules in code, automatically enforcing compliance and reducing bias.

However, legal adaptation is crucial. Most African procurement laws were designed for paper-based systems and do not yet recognize smart contracts as legally binding. New frameworks must clarify the legal status of smart contracts, address issues of dispute resolution, and reconcile data protection regulations (such as GDPR) with blockchain’s immutable nature. Courts must also gain authority to interpret or override smart contracts in cases of error or fraud.

Methodology and Case Study Scope

The study relies on secondary data—academic papers, policy reports, and case studies—from global and African contexts. It focuses on countries such as Kenya, Rwanda, and South Africa, comparing their experiences with global leaders like Estonia, Dubai, and Chile. This dual approach highlights best practices and challenges relevant to Africa’s adoption of blockchain-enabled procurement.

Implementation of Smart Contracts in Procurement

Smart contracts can transform every procurement stage:

1. Bid Submission: Proposals stored immutably on blockchain prevent manipulation.

2. Evaluation: Automated verification of bid criteria ensures fairness.

3. Contract Award: Executed automatically and recorded transparently.

4. Payment: Triggered upon delivery confirmation, minimizing fraud.

Benefits: Greater transparency, efficiency, fairness, and cost savings.
Challenges:

• Technological: Weak digital infrastructure, interoperability issues, cybersecurity risks.

• Legal: Outdated laws, unclear legal recognition of smart contracts.

• Cultural/Institutional: Resistance from officials, lack of expertise, and limited funding.

• Integration: Difficulties linking decentralized systems with legacy procurement platforms.

A major barrier is institutional resistance—some officials oppose systems that remove discretionary power and opportunities for corruption, highlighting that reform requires political will, not just technology.

Analysis and Discussion

Evidence shows that blockchain and smart contracts can enhance transparency, integrity, and trust in public procurement. Successful global models demonstrate real-world benefits, but African adoption must consider local contexts.
Key lessons include:

• Starting with pilot projects before full-scale rollout.

• Legal and policy reform to ensure enforceability.

• Capacity-building for officials and vendors.

A notable African example is Guinea-Bissau, where a blockchain platform—supported by the IMF—was used to manage public sector wages, eliminating “ghost workers” and preventing fraud. This showcases blockchain’s broader potential to secure public expenditure and improve fiscal integrity.

Conclusion

Smart contracts present a transformative opportunity for Africa’s public procurement systems by embedding transparency, accountability, and efficiency into each stage of the procurement cycle. They reduce opportunities for corruption, streamline administrative procedures, and create permanent audit trails that enhance public trust (Batista, 2024). Although significant challenges remain, the evidence from global and emerging African experiences demonstrates that blockchain-based procurement is both feasible and beneficial. To realize this potential, several recommendations emerge. First, African governments should update procurement laws to recognize blockchain records and smart contracts as legally binding, and establish frameworks for digital dispute resolution. Second, investment in digital infrastructure, including reliable internet access and cybersecurity safeguards, is essential to support widespread blockchain deployment. Third, capacity-building initiatives must target procurement officials, auditors, and vendors to ensure smooth adoption and overcome cultural resistance. Fourth, governments should begin with pilot projects in selected ministries or sectors to test feasibility before scaling nationally, focusing on high-risk, high-value procurement areas. Finally, broad stakeholder engagement, including civil society, private sector actors, and citizens, is crucial for building trust and ensuring inclusivity in adoption. The future of procurement in Africa will depend on the willingness of governments to embrace technological innovation while addressing structural barriers. If implemented effectively, smart contracts can contribute significantly to sustainable development by ensuring that public resources are managed transparently, efficiently, and in the best interest of citizens, directly supporting the achievement of Sustainable Development Goal 16 (Peace, Justice, and Strong Institutions).

References

Smart contracts present a transformative opportunity for Africa’s public procurement systems by embedding transparency, accountability, and efficiency into each stage of the procurement cycle. They reduce opportunities for corruption, streamline administrative procedures, and create permanent audit trails that enhance public trust (Batista, 2024). Although significant challenges remain, the evidence from global and emerging African experiences demonstrates that blockchain-based procurement is both feasible and beneficial. To realize this potential, several recommendations emerge. First, African governments should update procurement laws to recognize blockchain records and smart contracts as legally binding, and establish frameworks for digital dispute resolution. Second, investment in digital infrastructure, including reliable internet access and cybersecurity safeguards, is essential to support widespread blockchain deployment. Third, capacity-building initiatives must target procurement officials, auditors, and vendors to ensure smooth adoption and overcome cultural resistance. Fourth, governments should begin with pilot projects in selected ministries or sectors to test feasibility before scaling nationally, focusing on high-risk, high-value procurement areas. Finally, broad stakeholder engagement, including civil society, private sector actors, and citizens, is crucial for building trust and ensuring inclusivity in adoption. The future of procurement in Africa will depend on the willingness of governments to embrace technological innovation while addressing structural barriers. If implemented effectively, smart contracts can contribute significantly to sustainable development by ensuring that public resources are managed transparently, efficiently, and in the best interest of citizens, directly supporting the achievement of Sustainable Development Goal 16 (Peace, Justice, and Strong Institutions).

Copyright

Copyright © 2025 Abulfathi Ibrahim Saleh Al-hussaini, Kayode Babarinde. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.