Ghana 'paying too much' for hospitals

Will Green is news editor of Supply Management
28 June 2018

The cost of public building projects in Ghana has been called into question by vice president Mahamudu Bawumia.

Bawumia said Ghana had been building 60-80 bed district hospitals for $25m each, but a 150-bed hospital had been built in Accra by the African Development Bank for $1.3m.

“Even if we have to equip this hospital for some $1m, the total cost cannot get to more than $3m,” he said, according to the state-run Ghana News Agency (GNA).

“So how come we are building district hospitals for $25m, a figure which even excludes the tax exemptions granted on equipment imported for the hospitals?”

Speaking during a “value for money” conference in Accra, involving academics, government ministers, businesspeople and civil society organisations, Bawumia said a 1,000-bed hospital had been built for $20m by Dangote.

“It begs the question why Ghana builds an even smaller capacity (about 400-bed facility) for nearly $300m,” he said.

“Something is not right here. It is therefore imperative that at the same time as we are seeking suitable investment opportunities to meet the infrastructure gap, the government takes steps to ensure cost efficient programme design and delivery to reduce financial wastage and protect the public purse.”

Bawumia said everything should be done to ensure the nation got value from the money it spent on infrastructure including roads, schools and hospitals.

“It plays a significant role in generating revenue for economic development and provides support for a growing population,” he said.

The GNA cited World Bank figures that show Ghana spends around $1.2bn a year on infrastructure.

Bawumia said more than 90% of corruption was related to procurement. “Value for money is an overused phrase in public procurement,” he said. “Many procurement decisions we are told have been made with the goal of attaining fit for purpose, efficiency and effectiveness.

“Yet in the end our infrastructure projects are typically characterised by huge cost overruns and undue delays, which eventually fail to deliver on its objectives to the ultimate beneficiaries.”

He said value for money was not about achieving the lowest price but optimising whole-life costs, quality and contract terms, while professionalism, transparency, competitiveness and accountability were the way to achieve a good procurement system.

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