Ending Procurement Fraud: The Role Of Licensing And Sanctions

Ghana, unlike many African nations such as Liberia, Ivory Coast and Sierra Leone, may not have experienced civil war since independence in 1957 but one thing for sure is that the country is fighting a war which is as serious as a civil war, and that is the fight against the canker of corruption.

This war, if not exaggerating, can be likened to the fight against famine in nations like Somalia, natural disaster in South East Asia, among others.

Corruption remains a major socio-economic canker facing the country, stifling its efforts towards providing a decent livelihood for all its citizens.

The absence of civil war means Ghanaians have not had to flee their country in their numbers overnight to other nations to seek shelter as refugees, and experience the harsh conditions associated with being a refugee.

But there are harsh conditions they equally face from the ‘corruption war’, which is arguably one of the reasons for poor service delivery in many institutions, particularly those owned by the state.

Each year, millions of Ghana cedis of taxpayers hard-earned cash are reportedly siphoned by a few individuals who see the act of occupying a public office as a lucrative means to ‘create’, ‘loot’ and ‘share’ the state’s resources entrusted to them.

One area where corruption or fraud against the state has flourished over the years has been in the field of procurement.

The field of procurement within Ghana has also been identified as one with no licensing and strong sanctions regime, hence the growing impunity with which procurement processes are abused, especially in the public sector.

In the words of Information Minister Mustapha Hamid, “It is generally agreed that the biggest source of wastage is through public procurement.”

According to Professor Douglas Boateng, Board Chairman of the Public Procurement Authority (PPA), procurement accounts for about 70 percent of all government of Ghana’s spending per annum.

Nature Of Public Procurement

Procurement activities, particularly in government circles done mostly on single or sole-sourcing basis, have reportedly been associated with massive fraud against the country by a handful of individuals who are fortunate to occupy top positions in a government of the day.

Cronies and party faithful, friends and loved ones are reportedly mostly preferred when it comes to the award of procurement contracts, even if on technical grounds they are not qualified for such contracts.


Some of the recent cases include the GH¢3.6 million Metro Mass Transit (MMT) bus rebranding deal, the $510 million Ameri energy deal.

The Ameri energy deal, according to a report by the committee tasked by the Energy Ministry, was over-priced by $150 million, while the Smartty’s bus branding deal, on the other hand, was reportedly overpriced by GH¢1.5 million.

In 2015, a total of 10 persons, including the Pharmacy Director of the Korle-Bu Teaching Hospital, Elizabeth Bruce, were interdicted over alleged procurement-related malpractices which revealed the  misappropriation of GH¢946,574.29 at the Pharmacy Department of the Korle-Bu Teaching Hospital.

The forensic audit into the operations of the pharmacy department of the Korle-Bu Teaching Hospital was commissioned by the then Health Minister, Sherry Ayittey, and it revealed that bad procurement processes and collusion by suppliers were used in misappropriating the amount.

Such misappropriations are considered a rip-off of the state, and they, to a large extent, deny the masses the needed social amenities.

In some instances, service quality in some institutions, including health facilities, have reportedly been poor simply due to misappropriations.

Need For Reforms

The high level of corruption and its constant link to procurement and supply chain activities has given rise to the need for reforms of the procurement profession in Ghana.

There have also been calls for the Public Procurement Authority (PPA), an institution that oversees state’s departments, ministries and agencies’ procurement processes, to be repositioned to enable it truly fight fraud within the sector.

With the right partners, the government of Ghana must accelerate procurement-related human capital development, especially within the public sector, Prof Boateng urged.

Prof Boateng has predicted that procurement shall become one of the most important functional instruments for industrialisation and socio-economic development in emerging economies like Ghana by 2025.

CIPS Joins

On October 9, 2017, the Chartered Institute of Procurement and Supply (CIPS) Ghana opened its Ghana bureau at Labone, a suburb of Accra, as a testament of its preparedness to help professionalise procurement in the country.

Stella Addo is CIPS Country Manager in Ghana, and she stressed that with the high spate of wastage of state resources through public procurement, there was the need for some key policy reforms going forward.

Sanctions and Licensing regime

Among the policy reforms CIPS – a UK-based global professional body for procurement and supply chain management – is advocating in Ghana are a comprehensive and strong licensing regime for procurement professionals.

CIPS Ghana is also advocating for a strong sanctions regime which should include the revocation of licenses to be issued to such professionals in the event that they misconduct themselves in the course of discharging their professional duties.

“What we want to add on in terms of what we are doing is that we want to move to the extent that we get our members professionally trained and licensed; that’s the next level that CIPS coming to Ghana is going to work to move at simply there is a lot of malpractices going on, there is a lot of misprocurements, there is a lot of people who are not doing things professionally,” she told DAILY GUIDE.

“And we believe that first they have to be professionally trained, we have to know that we have the right people in the right places doing the procurements.

“So we will be doing a lot of stakeholder meetings and finding out from both in the MMDAs and things what are their qualification levels and what are their skills and experiences,” she stated.

Madam Addo added, “Those who have already done our courses, then we can now license them and then after the licensing if anybody misbehaves we can revoke the license.”

“Those who don’t have the CIPS qualification, we will find out the level of education that they have done and then we also have switch-wish courses which we call corporate awards which CIPS runs.”

She explained that “we have to make sure that are the right people with the right skills are working at the MMDAs.”

CIPS has about 800 members in Ghana and several technical university students are being brought on board to boost the professionalisation drive of the organisation.

Why Sanctions And License?

CIPS Ghana is of the strong view that the absence of a sanctions and licensing regimes is greatly to blame for the “misprocurements” and alleged fraud in the sector, thus, stemming the tide requires introducing sanctions.


CIPS has also called for the review of the current Public Procurement Act, Act, 2003 (Act 663) to ensure that the needed measures are put in place.

Thus, with procurement reportedly contributing significantly to the wastage, it is becoming more and more important to stem the tide.

Gov’t’s Response

Apparently in response to the numerous calls for reforming the procurement sector due to the plentiful of allegations of fraud, President Akufo-Addo upon assuming power in 2017, appointed Ghana’s first ever Procurement Minister, Sarah Adwoa Safo, whose responsibility is to ensure proper value for money procurement. Madam Safo has been working to ensure accountability in procurement processes within the public sector, and has with the support of cabinet directed that public procurement exceeding GH¢50 million should be forwarded to the president for approval.

“An expert in procurement law has, therefore, been nominated to take care of the business of fleecing the state through public procurement,” Mr Hamid stated while trying to justify the appointment of Madam Safo at the time.

With the current New Patriotic Party (NPP) administration desire to pursue industrialisation vigorously under its ‘one-district one-factory’ policy and the provision of many pro-poor policies such as the Free Senior High School (SHS) initiative, Deputy Minister of Finance, Kwaku Kwarteng, underscored that it has become necessary for the state to reduce revenue leakages and wastage.

But, CIPS strongly believes to achieve success in fighting the procurement-related frauds requires a licensing and sanction regime, one thing government has not been able to do.

Madam Stella Addo with Duncan Brock, CIPS Fellow and Director at the commissioning of the office in Labone

Madam Addo displaying to DAILY GUIDE a book on the global standard for procurement and supply