PRESENTATION ON PROCUREMENT
REFORM IN GHANA
OECD/DAC-WORLD BANK ROUNDATABLE 22ND– 23RD JANUARY
2003
MESSAGE FROM THE PRESIDENT
Message from the President of Ghana
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Introduction
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2 years of peaceful & democratic rule
Government elected on a platform of reform,
transparency & accountability
Policy of zero
promulgated
tolerance
of
corruption
2
Fiduciary Responsibility for Procurement
The Ministry of Finance have fiduciary
responsibility mandated by - Financial
Administration Regulations, 1979 LI
1234) Part XII, Section 651 ‘Public
Supplies and Equipment’ which is to
ensure that procurement of public
supplies and equipment and their use is
an integral part of budgetary
management and that purchases are
made in the most economical way.
3
Rationale for reform of Public
Procurement
-Need for procurement reform is articulated in
the findings and recommendation of the various
World Bank studies on public procurement in
Ghana,
- Country Procurement Assessment Reports
[CPAR] of 1985
-1986, Gosta Westring’s report of 1997 and
- Country Portfolio Performance Review [ CPPR]
of 1998.
4
Rationale for reform of Public Procurement
(cont.)
-these reports highlighted the unacceptable
features in the Government’s procurement
system and advocated a comprehensive reform in
Ghana.
-This was also endorsed in the comprehensive
Development Framework initiative in Ghana in
1999.
- From the perspective of Ghana’s Development
Partners an open and transparent public
procurement system is considered an absolute
necessity as it is central to the new approach of
moving away from project lending to programme
lending.
5
Rationale for reform of Public Procurement
(cont.)
-
Under the comprehensive Development
Framework
(CDF),
Donors/Development
Partners require a good procurement system
to allow their resources to be pooled and
controlled by the Government under one
basket funding.
6
SIZE OF GOVERNMENT PROCUREMENT
-Public procurement accounts for up to 50/70% of
imports, representing between 18.2% to 25.48%
of the country’s Gross Domestic Product (GDP).
About 80% of non-staff emoluments Government
expenditure pass through the procurement
process.
Public entities spend large sums of money
through the public procurement process and in view
of mounting budget constraints, it is important that
Government introduces efficient public procurement
procedures and systems that would ensure value
for money.
7
CURRENT PROCUREMENT PRACTICIES
Deficiencies
Current procurement practices for
acquisition of goods, works and services
have various deficiencies, which include:
-lack of a unified system and multiplicity
of practices for procurement services.
-procuring entities use World Bank and other
donor procurement guidelines alongside
fragmented national procurement practices.
-multiplicity of donor procedures stretches
the nation’s limited human resource capacity
for quality and consistent performance.
8
Role of MoF in Reform of Public Procurement
Ministry of Finance exercises oversight
responsibility for rational allocation and utilization
of the country’s public resources, hence, its
obligation for ensuring a well regulated
procurement system.
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Procurement is considered part of budget
and financial management in the national
economy.
Improvements in the public procurement
system therefore has direct and beneficial
effect on the overall economic performance
of the economy.
9
Role of MoF in reform of Public Procurement
–cont’d
To fulfil its mandate, the Ministry of Finance in
1996 embarked on an exercise to reform the
government’s Public Procurement System as an
integral part of a wider Public Financial
Management Reform Programme (PUFMARP).

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Purpose/Goals of Public Procurement reform
(PPR)
This is to eliminate the various shortcomings in
the public procurement process through the
provision of a comprehensive procurement law
and standard tender documents supported by
relevant institutional and administrative
structures and an oversight body, which would:
(i) Promote the use of public procurement as a tool
for national development;
(ii) Harmonize the application of procurement related
rules in local and international conventions and
treaties;
(iii) Promote the integrity of the public procurement
system and public confidence in the procurement
process, among others.
11
Purpose/Goals of Public Procurement reform
(PPR) –Cont’d
• streamline the procedures and practices
for procurement of :
- goods,
- works,
- services, as well as
- disposal of stores and equipment
• to establish an effective monitoring system to
ensure proper utilization of public funds for
enhanced economic growth.
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Procurement reform process
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Extensive consultation at national and international
levels
Reviewed international best practices
Considered how leakages in public expenditure
programmes could be mitigated
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Formulation of the Reform Proposal
• Ministry of Finance, in January 2000,
established the Public Procurement
Oversight Group (PPOG), with mandate to
consult broadly and make firm proposals for
the fragmented public procurement system
and reform the process in its entirety.
• MOF acting through the PPOG
commissioned a Team of Consultants, who
undertook series of studies, on the current
state of public procurement in Ghana.
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Formulation of the Reform Proposal
• Based on the reviews and studies, the PPOG confirmed
the following deficiencies in the current system:
- Absence of a comprehensive and well-articulated
public procurement policy;
- Lack of a comprehensive legal regime to
safeguard the integrity of the public
procurement system;
- Absence of a central body with the requisite
capability, technical expertise and competence to
develop a coherent public procurement policy, rules
and regulations to guide, direct, ensure trained
manpower, as well as adequately monitor public
procurement.
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Formulation of the Reform Proposal Cont’d
•Subsequently the Public Procurement Reform
Proposals were produced and cover the
following:
- Policy
- Legal Framework ie (Draft procurement
Bill was produced which has received
stake holders comments and
subsequent legal drafting)
- institutional structures,
- procurement procedures
- arrangements for capacity building.
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Coverage of the Draft Procurement Bill
•
covers procurement for goods, works and
services, (financed in whole or in part
from public funds/ loans taken or
guaranteed by the State and foreign aid
funds.
•
disposal of stores and equipment.
•
It enacts comprehensive legal provision
on the Institutional Arrangements.
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Coverage of the Draft Procurement Bill cont’d
•The Law provides basically for two
broad categories of Boards:
(i) the Public Procurement
Board (PPB) - as the main
policy and regulatory machinery to
ensure proper degree of oversight
and monitoring.
(ii) The Tender Review Boards
(TRB)- consisting of Central,
Regional and District,
Ministerial/ Headquarters .
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Coverage of the Draft Procurement Bill –
cont’d
 Functions of the PPB include:
(a) Continuous development of public
procurement policy, setting standards, and
other regulatory instruments on public
procurement
(b) Monitoring compliance with requirements
established by legislation,
(c) Ensuring dissemination of information
in relation to public procurement,
setting ethical standards for all
stakeholders,
(d) Ensuring adequate capacity building in
public procurement at various levels.
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Coverage of the Draft Procurement BillCont.d
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Functions of the Tender Review Boards (TRB)include reviewing of the processes and procedures
followed by MDAs to give concurrent approval for
award of Procurement Contract by the Procurement
entity.
The Procurement Bill covers, Processes, description of
requirements and invitation of sources, preparation,
selection and award of contract and the phases of
contract administration;
Practices to administer public procurement nationally.
Adequate provisions for accountability and
transparency.
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Applicability of the Procurement Law
 all central management agencies;
 all government ministries, department and agencies
(MDAs),
 all subvented agencies, governance institutions,
state owned enterprises to the extent that they
utilize public funds,
 public universities, public schools, colleges and
hospitals,the Bank of Ghana and financial institutions
such as public trusts, pension funds, insurance
compamies and building societies which are wholly
owned by the State or in which the State has
majority interest,
 institutions established by Government for the
general welfare of the public or community.
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Responsibility for the Examination of
Technical Details of Procurement
• Responsibility for examination of technical
details for contracts, agreements and
procurement are provided for under the Law
and rests with the Entity Tender
Committees.
•
The law provides that no contract shall be
awarded until the effect the acceptance of the
tender will have on the following are
ascertained:
 The balance of payments position and
foreign exchange reserves of the country,
22
Responsibility for the Examination of
Technical Details of Procurement – Cont’d
 the counter-trade arrangements offered by
suppliers or contractors,
 the extent of local content, including
manufacturer, labour and materials, in goods,
works or services being offered by suppliers
or contractors,
 the economic- development potential offered
by tenders, including domestic investment or
other business activity,
 the encouragement of employment,
 the reservation of certain production for
domestic suppliers,
 the transfer of technology,
23
Challenge Mechanism
• A robust challenge mechanism which
supports Key elements of Procurement
process ie:
- Transparency, Integrity, Competition, Best
Value, Efficiency
• The proposed procurement law provides the
private sector and civil society with a legal
basis for lodging complaints/appeals against
public officials who do not follow the laid
down procedures.
• It provides appropriate sanctions for erring
public officials.
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THE WAY FORWARD
• Proposals have been finalized after passing
through various quality assurance and
acceptability processes.
• Having a State of the Art Law is not enough
• Capacity Building Plan will have to be
implemented as soon as Bill is enacted
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THE WAY FORWARD (CONT.)
Elements of Capacity Building Proposal
• Human Resource Development
-Public Awareness campaign of the Reformed
Public Procurement System
-Initial training of Procurement Practitioners
-Dissemination of Information to Heads of
Procurement Entities
-Sustainable training & Professional
Development
• Logistics
-ICT resources, etc
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THE WAY FORWARD (Cont.)
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Capacity to support the new procedures would
be built at all levels:
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Staff of procurement entities;
Policy makers and politicians
Suppliers, Contractors & Consultants (Existing &
Potential), SMEs and SME Development
Institutions
Civil Society at large (the media, NGOs, political
parties, etc).
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THE WAY FORWARD (CONT.)
Capacity Building Plan :
 Modules on procurement courses (course
materials, target groups, staged delivery/
delivery timetable and delivery method)
 Detailed budget covering training programmes
delivery
 Detailed costing of logistics requirements
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REQUIRED BUDGET
YEAR
AMOUNT (US$)
1
5,000,000
2
3,000,000
3
2,000,000
4
2,000,000
5
2,000,000
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Summary
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We are aware that we are at the beginning of the
process.
Ghana is prepared to work with all development
partners to ensure a transparent and efficient public
procurement system.
We trust that if the results are good development
partners will respond.
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Conclusions
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BIGGEST CHALLLENGE:
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Ghana needs to demonstrate seriousness in the implementation.
We cannot do this on our own. We need the support and
contribution of our development partners. In this regard we
acknowledge the following:
Acknowledgements
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OECD/DAC (Invitation for further assistance)
World Bank (Lead support for PUFMARP)
DFID (VFM Assessment)
EU (Audit Service)
Swiss Government (Benchmarking and M&E)
All others
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END OF PRESENTATION
THANK YOU FOR YOUR ATTENTION