Various studies emphasized the link between the efficiency of the national procurement system and the achievement of development goals. The magnitude of resources involved in public procurement in Ghana is estimated at over 17 percent of GDP and around 80 percent of tax revenue (World Bank, 2007). Transparent and efficient public procurement system offers numerous benefits including value for money, encouraging investment, innovation, and reduction of corruption. In addition to reducing costs and ensuring cost-effective delivery of services, infrastructure, and public goods, good management of public resources through an effective procurement system also increases the public's confidence in governance.
In 2003, a Country Procurement Assessment Report (CPAR) was conducted. The CPAR recommended actions to improve the public procurement system focused on all aspects of the system including the legal and institutional framework, procurement procedures, proficiency, oversight mechanisms and anti-corruption measures.
The Public Procurement Authority (PPA) formerly Public Procurement Board (PPB) was established to facilitate the successful implementation of the Public Procurement Act 2003 (Act 663).
In reviewing progress in implementing the CPAR recommendations, the 2007 Procurement Assessment Report of the World Bank concludes that substantial progress had been achieved since 2003 in strengthening public procurement. Highlights include: (i) enactment of the Public Procurement Act (Act 663 given assent on December 31, 2003); (ii) establishment of the Public Procurement Authority (PPA); (iii) development of standard bidding documents and request for proposals; (iv) establishment of an appeals and complaints panel; (v) development of a software package for procurement planning; (vi) development of core short-term training modules for public officials, the private sector and national oversight bodies; and (vii) development of the PPME (Public Procurement Model of Excellence) tool to collect and assess data on compliance and performance.
Though significant progress has been achieved with the Act, it should be recognized that corruption has still robed into public procurement processes as highlighted in the figure below.
* Estimated PP Loss (Min, Max): Despite the difficulties in measurement, international comparison covering a wide set of countries is possible when one considers central government procurement only. The size of central government purchases varies between five percent (5%) and eight percent (8%) of GDP for most industrialized countries. For Ghana, the magnitude of central government purchases is estimated between nine percent (9%) and seventeen percent (17%) of GDP.
** Foreign Aid or Official Development Assistance consists of loans and grants by official and non-official agencies of the members of the Development Assistance Committee.
1) World Bank
National accounts data, and OECD National Accounts data files. http://www.oecd.org/countries/ghana/ World Development Indicators
2) African Development Bank: Main Report on Assessment of Country National Competitive Bidding Procedures, Version 2, September 2012.
Ghana's public procurement framework is underpinned by the Public Procurement Act, 2003 (PPA).
The Act establishes the five basic pillars of public procurement:
The Act applies to all procurement financed in whole or in part from public funds throughout the procurement cycle from the selection to the administration of contracts.
1) Public Procurement Board (PPB) as a legal corporate entity:
The Board's duties include: providing policy and regulatory oversight; providing training and capacity building for procurement officials; hearing appeals and complaints; and, assisting local industries to become competitive and efficient suppliers to the public sector. The Board must also maintain a database of all suppliers, contractors and consultants, debar vendors from procurement practice as specified under the PPA, and, publish the list of suppliers, contractors and consultants with proven misconduct under the Act. The right to review is provided for in Section 78. Finally, the PPB must establish and publish a code of conduct for all procurement officials, the PPB itself, tender review boards as well as for suppliers, contractors and consultants.
2) Procurement entities are defined as comprising metropolitan, municipal and district assembles (MMDAs) and all para-statal establishments that utilize public funds.
Software package for procurement planning
Ghana - Country procurement assessment report (CPAR), 2003
Ghana - Assessment of Stage 1 - Use of Country Procurement Systems in Bank-Supported Operations: Proposed Piloting Program