[ 2016-11-23 ]

Ghana loses $2bn in sole-sourced contracts – Danquah Institute
The Danquah Institute, a public policy research
centre, has said at least $1.93 billion is being
lost through non-competitive tendering.

The pro-opposition outfit said it has been
investigating “public procurement contracts
awarded on either sole sourcing or restrictive
tender basis since 2010, involving over GH¢12
billion (US$2.96 billion in nominal terms).”

“Our findings suggest that an estimated 65%
savings could have been made if those deals were
subjected to competitive tendering. That
translates into GH¢7.8 billion savings in public
funds, equivalent to US$1.93 billion,
nominally,” DI said in its report.

Below is the full statement

The Danquah Institute, a public policy research
centre, has painstakingly undertaken due diligence
on a number of public procurement contracts
awarded on either sole sourcing or restrictive
tender basis since 2010, involving over GH¢12
billion (US$2.96 billion in nominal terms).

Our findings suggest that an estimated 65% savings
could have been made if those deals were subjected
to competitive tendering. That translates into
GH¢7.8 billion savings in public funds,
equivalent to US$1.93 billion, nominally.
Essentially, public procurement contracts appear
to be motivated more by corruption than
development. The actual cost of the current
situation is that we are throwing too much money
at far fewer projects and the nation could have
developed far more faster if only government would
adhere to the letter of and principles behind the
public procurement law.

In a series of publications, DI will share the
findings of its research with the country as part
of the necessary national debate to make value for
money assessment a critical component of public
expenditure.

It is always prudent to shop around when choosing
a supplier or distributor for the provision of any
service for the obvious reason of cost reduction.
It is indeed imperative for a government to ensure
that due process is followed with respect to
awarding state contracts especially when there is
no urgency for the execution of the relevant
contract to warrant a no-bid or sole sourcing
contract. It is even more vital for a country like
Ghana, where basic infrastructural difficulties
are widespread and poverty rife to have value for
money being the deciding factor for the award of
state contracts. Save in response to national
disasters or the prevention of the same, urgency
does not necessarily come to play especially where
citizens have survived without very basic
amenities since independence. The prerogative of
the government and if this were put to the masses
for a vote would indicate that value for money
should drive all decisions of the award of state
contracts.

Source - Graphiconline

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