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Damning report cites Ghana for mismanaging $2.1bn COVID-19 funds

By George Nyavor
Covid-19 corruption risk assessment
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A report authored by the Community Development Alliance (CDA-Ghana) and the Commonwealth Foundation has given a damning assessment of Ghana’s management of over $2 billion funds accessed from a myriad of sources to fight the coronavirus pandemic in the country.

According to the report, the government accessed and utilised a total of GHS12,440,710,000 ( or $2,144,950,000) from the World Bank, IMF, Ghana Stabilisation Fund, Contingency Fund of the Stabilisation Fund, Ghana Heritage Fund, Ghana Exim Bank and the Covid-19 Trust Fund for various activities to quell the effects of the virus.

“The assessment was carried out in March to April 2021, based on a review of background documentation, including the national legal regulatory framework for public procurement, with focus on integrity-related issues, official records in both electronic and hard copy formats, checks with state agencies, and interviews governance and anti-corruption experts,” the 67-page report explained.

Dubbed “Strengthening Covid-19 Accountability Mechanisms (SCAM)” the two institutions said their evaluations are consistent with international regulatory framework, particularly World Bank directives on public procurement, for best practice evaluation.

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In its findings under the heading “Irregular Procurement”, the report stated that contract awarded to four Ghanaian garment manufacturing companies who had been given loans of $10m through the Ghana Exim Bank to produce PPEs, face masks, medical scrubs, hospital gowns and headgears was without tender and the companies had been selected.

“The companies were also not registered with the Public Procurement Authority (PPA) at the time of contract award,” the report stated.

The following findings were also revealed:

  1. A $1m contract awarded to develop the COVID-19 tracker app to two foreign companies namely iQuent Technologies and Ascend Digital Solutions (registered in Jersey, a tax haven) was irregular. The two companies were not legal persons in Ghana at time of contract award, were not registered with the PPA, and did not go through tender.
  2. Contracts worth GH¢60m for fumigation services and logistics such as sanitizers, masks, dustbins, cleaning kits etc to all districts by the Ministry of Local Government from its allocation under the District Assemblies Common Fund for the 2020 fiscal year was mostly without tenders.
  3. Contract awarded to Frontiers Healthcare Solution Services Limited to conduct Covid-19 antigen tests at the Kotoka International Airport was without tender, the company was not registered with PPA and unlisenced by the health facilities regulator, HEFRA.
  4. Contract for supply of 18,000 Veronica Buckets; 800,000 pieces of 200-millilitre sanitizers; 36,000 rolls of tissue paper; 36,000 gallons of liquid soap and 7,200 thermometer guns distributed to schools were opaque and not tendered. It’s unclear who the suppliers were and how much was spent on this procurement.
  5. Contract for provision of hot meals for 540,000 final students and teachers who sat for the 2020 WASSCE and BECE exams for three weeks was opaque, with no full disclosure of who were awarded these contracts, from which fund the contracts were awarded and whether the contracts went through the proper procurement processes. ­
  6. Contract for nation-wide disinfection and fumigation of over 464 markets was awarded to Zoomlion on sole source basis, in addition to another contract by the Ministry of Education and Ghana Education Service to disinfect and fumigate over 850 High Schools across Ghana and 3700 schools in the Greater Accra region.

Read the full Executive Summary of the report below.

“Strengthening Covid-19 Accountability Mechanisms (SCAM)”

Corruption Risk Assessment

Executive Summary

This assessment addresses corruption risks associated with public procurement during the COVID-19 pandemic in Ghana. The assessment was carried out in March – April 2021, based on a review of background documentation, including the national legal regulatory framework for public procurement, with focus on integrity related issues, official records in both electronic and hard copy formats, checks with state agencies, and interviews governance and anti-corruption experts. International regulatory framework, in particular World Bank directives on public procurement, have been taken into account for best practice evaluation.

The assessment included an evaluation of the institutional framework in the field, including its operational capacities, efficiency of integrity mechanisms, control and sanctions. Individual interviews have been held with the stakeholders of the national procurement (regulators, contracting authorities, control bodies and civil society organizations) to identify problems and risk sectors.

The report consists of two parts:

  1. An assessment of corruption risks characteristic to COVID-19 public procurement, including mapping of integrity risk areas and recommended measures for integrity/corruption risks mitigation. This assessment uses the OECD Methodology for assessment of national procurement systems (MAPS);
  2. An optimal risk indicator system based on the “red flag” concept.

The following conclusions have been made:

Government of Ghana have accessed and utlised GHC12,440,710,000 ($2,144,950,000) from sources such as the World Bank, IMF, Ghana Stabilization Fund, Contingency Fund of the Stabilization Fund, Ghana Heritage Fund, Ghana Exim Bank and the Covid-19 Trust Fund set up by the government.

This assessment clusters Ghana’s COVID-19 corruption risks around two main issues – irregular procurement practices that violates Ghana procurement laws and corruption risks that indicates that there has been substantial breaches of anti-corruption laws, regulations, codes and international conventions and best practices.

Irregular Procurement

Contract awarded to four Ghanaian garment manufacturing companies who had been given loans of $10m through the Ghana Exim Bank to produce PPEs, face masks, medical scrubs, hospital gowns and head gears was without tender and the companies had been selected.

The companies were also not registered with the Public Procurement Authority (PPA) at the time of contract award.

  • A $1m contract awarded to develop the COVID-19 tracker app to two foreign companies namely iQuent Technologies and Ascend Digital Solutions (registered in Jersey, a tax haven) was irregular. The two companies were not legal persons in Ghana at time of contract award, were not registered with the PPA, and did not go through tender.
  • Contracts worth GH¢60m for fumigation services and logistics such as sanitizers, masks, dustbins, cleaning kits etc to all districts by the Ministry of Local Government from its allocation under the District Assemblies Common Fund for the 2020 fiscal year was mostly without tenders.
  • Contract awarded to Frontiers Healthcare Solution Services Limited to conduct Covid-19 antigen tests at the Kotoka International Airport was without tender, the company was not registered with PPA and unlisenced by the health facilities regulator, HEFRA.
  • Contract for supply of 18,000 Veronica Buckets; 800,000 pieces of 200-millilitre sanitizers; 36,000 rolls of tissue paper; 36,000 gallons of liquid soap and 7,200 thermometer guns distributed to schools were opaque and not tendered. It’s unclear who the suppliers were and how much was spent on this procurement.
  • Contract for provision of hot meals for 540,000 final students and teachers who sat for the 2020 WASSCE and BECE exams for three weeks was opaque, with no full disclosure of who were awarded these contracts, from which fund the contracts were awarded and whether the contracts went through the proper procurement processes. ­
  • Contract for nation-wide disinfection and fumigation of over 464 markets was awarded to Zoomlion on sole source basis, in addition to another contract by the Ministry of Education and Ghana Education Service to disinfect and fumigate over 850 High Schools across Ghana and 3700 schools in the Greater Accra region.

Corruption Risk

  • There appears to be an issue with funds of $1.2million meant for the payment of 900 contact tracers employed by the Ghana Health Service to work on case detection, contact tracing and reporting, 600 of whom dropped out later due to various grievances, chief among them the erratic payment of their daily allowance of $25 (GH¢150.00). A corruption risk arises over whether an employment contract regulated the work of the contact tracers, the terms of their engagement, how much was actually paid to them, for how long and why 600 of them dropped out.
  • A $1m contract awarded to develop the COVID-19 tracker app to two foreign companies namely iQuent Technologies and Ascend Digital Solutions raises substantial corruption issues. Ascend Digital Solutions was registered just a month before contract award in Jersey, a tax haven and the contract sum appear bloated. Same applies to the GH¢1.4m ($240,000) spent on the launch of the tracker.

Contract awarded for free food during the partial lockdown in Greater Accra and Greater Kumasi is perhaps the biggest red flag in the whole COID-19 spending saga, with many doubting the number of people fed, the period of the intervention, the way caterers were contracted and the unit cost of the food packages, with GoG not helping the situation by giving conflicting figures and accounts. GHc42million was spent on hot meals during the period, without any proper tendering or documentation.

  • An amount of GHc2million was allocated to transport frontline heath workers during the partial lockdown in Accra but doesn’t appear to have been fully utilised, leaving GHc1,622,000 unaccounted for under the Free Transport for Health Workers allocation.
  • It is unclear how $7.4m earmarked for community engagement and risk communication – from 1st release of $35m from the World Bank was spent. A National Information Contact Center (NICC) at the Accra Digital Center was set-up to provide information on COVID-19 and related matters but unclear how much GoG spent on that set-up.
  • An amount of $12.7m was earmarked for containment, isolation and treatment - from 1st release of $35m from the World Bank. GoG spent $2,163million on 16 hotels and guest houses during the initial wave of arrivals. Even if GoG spent an additional $2million on all the other isolation centers during the initial wave of the pandemic, there appears to be an unspent funds of $8.6million within this allocation that needs further investigation.
  • The IMCC made up of Ministers and the Public Health Emergency Operations Center were to use part of an allocated $3.4m to coordinate and oversee the contracts for private sector management of the yet to be completed infectious disease center(s) and medical villages throughout the country. No work has commenced yet so unclear how GoG utilized this allocation. This represents another corruption risk that needs further investigations.
  • Additionally, the Administrator of the Common Fund, Irene Naa Torshie Lartey, in a letter dated April 9, 2020, released GH¢166,280.62 each to the 260 districts towards the pandemic fight.

No district has accounted to the people for how this release was spent. Though Ghana’s procurement laws are fairly robust and adequate, the PPA Act vests power in the Minister of Finance to direct the use of a different procurement procedure where the Minister determines that it is in the ‘national interest to do so’ (ie, a scenario where the nation attaches high value, returns, benefit and consideration to the matter in question). Where the Minister makes such a determination, the procurement method shall be published in the Ghana Gazette.

GoG appears to have relied on this provision in the Act to circumvent the law in awarding almost all contracts awarded during the pandemic.

The assessment concludes with 24 recommendations for the Government of Ghana (enhanced transparency in procurement; Parliament (enhanced scrutiny of Government procurement); International Development Partners (help borrower countries improve their procurement systems; Auditor General (conduct priority auditing of COVID-19 procurement); Public Procurement Authority (set up a “White List” of qualified, vetted companies eligible for Government procurement); CSOs (to be involved in monitoring and ex post assessments and advocacy); and media organisations (use assessment to demand accountability from the IMCC and GoG).