Analysis of Public Procurement Methods in Growth of Small and Medium Sized-Enterprises in Afghanistan (Evidence from Kabul SMEs)

Public procurement has become an important tool for economic recovery and for supporting domestic industries in many countries. It plays a significant role in national and global economic activities. Small and medium-sized enterprises drive economic growth, job creation and economic diversification. As a post-conflict country, Afghanistan requires strong promotion of SMEs. SMEs in Afghanistan face structural and institutional challenges that limit their participation in procurement opportunities. The objective of this study is to assess the challenges and opportunities of current procurement methods in supporting SME growth. This study adopts an interpretivist paradigm and a qualitative exploratory approach. Data were collected through semi-structured interviews from 10 SMEs in different sectors and analyzed using thematic analysis. The findings identified several key barriers, including limited access to financial resources, bureaucracy, strict tender requirements such as banking guarantees and annual income conditions, limited knowledge of procurement regulations, and intense competition from non-sector firms in open bidding processes. These challenges often reduce SME profits and sometimes result in financial losses or minimal returns. The study suggests that procurement policy and practice should be reformed to improve SMEs participation. Most participants suggested establishing procurement quotas or reserved contracts for SMEs, revising tender requirements, promoting sector-based participation in open bidding, improving access to financial resources and simplifying administrative procedures. These reforms could enhance the role of SMEs in economic growth and contribute to employment generation in Afghanistan.