The Attention of the Public Procurement Authority (PPA) has been drawn to an article on the website of the African Report with title “Opinion: The dark side of the World Bank’s ‘giveaways’ in Ghana” by Bright Simons on April 19,2024.
The Authority welcomes and encourages the involvement of Civil Society Organisations (CSO) and all stakeholders in public procurement. It helps in the implementation of the law and strengthens the procurement landscape in Ghana.
However, the Authority has taken note of several uninformed and unfounded pronouncements in Mr. Simons’ article about the implementation of the Ghana Electronic Procurement System (GHANEPS). The Authority wishes to clarify the claims and states the following;
1. Contracts on GHANEPS: Based on the numbers provided, the Authority assumes that Mr. Simons was referring to contracts awarded through GHANEPS when he uses the term “tender results”. As of Tuesday, April 23, 2024, there have been 5048 contracts awarded in GHANEPS, coming out of a total of 3205 tenders published. Some tenders have lots that lead to multiple contracts, hence the difference in the number of contracts. Sixty-four percent of these tenders are Request for Quotations (RFQ).
In Ghana, the RFQ method of procurement has a maximum threshold of GH₵100,000, and it is the most commonly used method. The percentage of RFQs out of the total number of procurements conducted in Ghana has been above 60% in the past 5 years. Another point is that, as part of the change management strategy, a grace period was given to Procurement Entities (PE) to conduct manual procurement alongside electronic until the completion of the roll-out to all entities. This enabled them to use small-value tenders to ease their transition from manual to electronic procurement. Therefore, it is normal for Mr. Simons to find a lot of tenders with a value below $100,000 at this stage of the implementation.
Secondly, many of the tenders are meant to lead to Framework agreements. This is where a long-term agreement is established between a PE and a supplier without necessarily committing the PE to a finite quantity of goods or service upfront.
The quantity and value are established at the point of call-off based on conditions agreed in the framework. This method of contracting saves costs and reduces lead times, as well as lowers the need to keep large inventories. It also improves value through economies of scale and enhances the entity-supplier relationship.
Though there are several types of Framework agreements, the standard and common practice is to put no value or just the unit price at the award stage. Framework agreements are very effective for the procurement of commonly used items, simple technical services, medical supplies, and hospitality services, among others. In fact, it is the preferred contracting method among large multi-nationals across the globe for these categories of procurement.
Records on GHANEPS are therefore not “useless” as stated by Mr. Simons. Most of the small value contracts are framework agreements by the various hospitals across the country.
2. World Bank Projects in GHANEPS: As of August 2023, it is a strict and mandatory condition for all World Bank projects that use Ghana’s public procurement system to utilize GHANEPS. In fact, non-compliance with the use of GHANEPS will lead to the cessation of fund disbursement. All current Program-for-Results (PforR) financing projects in Ghana are utilizing GHANEPS.
In addition, the Bank is collaborating with PPA to ensure that Investment Project Financing (IPF) programs are also onboarded to GHANEPS. Due to the differences in thresholds for procurement methods and approval between the World Bank’s procurement guidelines and the Public Procurement Act, Act 663 as amended, GHANEPS was not readily able to onboard these projects.
3. $3 Billion Losses: Less than 30% of government expenditure is estimated to pass through public procurement in Ghana. For 2024, this is less than $6 billion. This makes the claim of $3 billion annual losses through procurement in Ghana highly improbable.
4. It is important to note that this is not the first time that Mr. Bright Simons has misrepresented data on GHANEPS and made uninformed claims. In January 2022, Mr. Simons claimed on Citi TV that the government had spent over $5 million on a system which had only two (2) tenders since its implementation. Both claims were false.
Firstly, there were about 758 tenders published on GHANEPS, out of which 11 were yet to close. Suppliers can respond to tenders until tender closure. The Authority suspects that the claim of 2 was born out of a misunderstanding of public procurement procedures and GHANEPS. Indeed, there were 2 National Competitive Tenders (NCT) on the system on that very day.
However, there were also 9 RFQ tenders that were also yet to close. In addition, there were 747 tenders at different stages past closure. Per the procurement procedures, only the 2 NCT were displayed in the Current Tender section of GHANEPS.
That should not be misconstrued to mean there are only 2 tenders on the system. For transparency purposes, tender opening reports of all tenders and contract award details are accessible to the public and can be viewed without logging into the system.
Secondly, the project expenditure as of January 2022 was about $3.5 million and not $5 million as stated by Mr. Simons. In fact, the entire budget for GHANEPS implementation from the eTransform project is $6.5 million over a period of more than 8 years.
This amount covers the development of the system, operations and maintenance for the period, hosting, roll-out of the system to all government entities, and any changes that are necessary to address teething issues. As of April 23, 2024, 856 procurement entities have been onboarded.
This consists of all Special and Independent Constitutional Bodies, Central Management Agencies, Ministries, Department and Agencies (MDAs), Statutory Fund Management Bodies, Metropolitan, Municipal and District Assemblies (MMDAs), State-Owned Enterprises (SOEs), Health Institutions, and Tertiary Education Institutions. In the process, 3473 Procurement Officers, 4454 management and other key staff, as well as 3782 suppliers, have been trained across all the 16 regions and 261 districts of Ghana.
A dedicated Secretariat was set up for the implementation of GHANEPS, manned by about 21 people. In addition, the PPA is in the process of rolling out support centers at about 50 locations across the country with an additional 100 support staff to ensure the availability of adequate support for suppliers and PEs. All of this is covered by the above-mentioned budget.
Conclusion
The Authority takes the opportunity to assure Ghanaians that the transition of Ghana’s public procurement from manual to electronic is on course. It has entered the enforcement phase this year. PPA is working with the Ministry of Finance, the Ghana Audit Service, the Internal Audit Agency, the Office of the Attorney General, the Controller and Accountant General’s Department, and other local and international stakeholders to ensure that all public procurement in Ghana is done through GHANEPS by the end of 2025.
The introduction of GHANEPS is increasing accessibility, transparency, and fairness in public procurement in Ghana.
PPA remains open to all stakeholders who strive for more transparency, efficiency, and value for money in government expenditure.