Accra, Ghana – March 3, 2025: President John Dramani Mahama has raised serious concerns over financial losses caused by single-source procurement in Ghana, revealing a shocking GH¢21 million loss due to an overpriced government contract.
Speaking at the National Economic Dialogue, Mahama expressed frustration over how government procurement processes are manipulated, allowing middlemen to profit massively at the expense of taxpayers.
"Foreign single-source procurement must be the rare exception rather than the norm. We must also subject government projects above a certain threshold to value-for-money audits," Mahama stated, as he outlined the dangers of unchecked procurement practices.
His revelations have sparked widespread debate, with many questioning why Ghana continues to lose millions due to poor financial oversight and politically motivated contracts.
How Ghana Lost GH¢21 Million in a Single Deal
The case highlighted by President Mahama involved a contract meant to supply 10,000 units of poultry farming equipment to support local farmers. However, instead of awarding the contract directly to the manufacturer or a qualified supplier, the government chose a middleman company through sole-sourcing.
Here’s how the financial loss occurred:
1. The manufacturer of the equipment was ignored – The government did not allow the original manufacturer or local assemblers to bid.
2. A politically connected company won the contract – A company with no production capacity was given the deal through single-source procurement.
3. Massive overpricing – The middleman company purchased the equipment for GH¢4,500 per unit from the original supplier but sold it to the government for GH¢6,600 per unit.
4. A profit of GH¢21 million – With 10,000 units sold, the company walked away with GH¢21 million in pure profit – money that could have been saved had the government purchased directly from the manufacturer.
"How can you do this? If it was our own company, would we run it this way? But that is how the government bleeds, with everyone cutting their pound of flesh. That must stop," Mahama lamented.
Why Single-Source Contracts Are a Problem
Sole-source procurement allows the government to award contracts without competitive bidding, meaning that one company is chosen without allowing others to submit offers. While this process can be justified in urgent cases, it is often abused to favor politically connected businesses, leading to inflated costs and corruption.
Lack of Competition: Without bidding, contracts are awarded at inflated prices, leading to huge financial losses.
Political Influence: Sole-source deals are often given to companies linked to politicians, rather than to the most qualified and cost-effective suppliers.
Low-Quality Work: Since there is no competition, the selected company may not deliver high-quality services or products.
Wastage of Public Funds: Money that could be used for education, healthcare, and infrastructure is wasted through overpriced contracts.
A report by Transparency International shows that countries with weak procurement systems often suffer from high levels of corruption, with public contracts used as a tool to reward political allies.
The Bigger Picture: How Much Has Ghana Lost to Corruption?
The GH¢21 million poultry contract is just one example of how poor procurement practices drain Ghana’s economy. Over the years, Ghana has lost billions of cedis to questionable government contracts, mismanagement, and corruption.
Notable Cases of Financial Losses Due to Poor Procurement
1. The Saglemi Housing Scandal (2012-2016)
Ghana spent $200 million to build 5,000 housing units, but only 1,500 were completed due to mismanagement and overpricing.
2. The PDS Electricity Scandal (2019)
A private company, PDS, took over ECG’s operations but was later terminated due to fraudulent documentation, costing the state millions in legal fees and lost investments.
3. The Auditor-General’s Reports (2020-2024)
Every year, the Auditor-General’s reports expose billions of cedis in financial irregularities, including ghost contracts, overpricing, and unauthorized payments.
With such repeated financial mismanagement, Ghana’s budget deficit continues to grow, forcing the government to borrow heavily from international lenders, increasing the country's debt burden.
President Mahama’s Call for Reform
President Mahama has vowed to tighten Ghana’s procurement system to prevent further financial losses. He emphasized that government contracts should always be subjected to strict value-for-money audits before approval.
His proposed solutions include:
Making competitive bidding mandatory for all government contracts above a certain amount.
Strengthening Ghana’s Public Procurement Authority (PPA) to ensure fair and transparent contract awards.
Introducing digital tracking of all government contracts to prevent inflated pricing.
Punishing officials involved in financial mismanagement through strict legal action.
Mahama’s administration has already started reviewing previous government contracts to identify areas of financial loss and possible corruption.
Public Reactions: Ghanaians Outraged by the GH¢21 Million Loss
Following Mahama’s revelations, Ghanaians have taken to social media to express outrage over the mismanagement of public funds.
@GhanaPoliticalNews: "GH¢21 million wasted in just one deal? This is why we remain a poor country despite all our resources!"
@CorruptionWatchGH: "Sole-source contracts must be abolished! Too much taxpayer money is being wasted through politically connected middlemen!"
@YouthForAccountability: "This is unacceptable! We need real reforms in how government contracts are awarded!"
Public demand for stronger anti-corruption measures is growing, with many calling on the government to investigate and prosecute those responsible for financial losses.
What Happens Next? Will the System Change?
The GH¢21 million procurement scandal is just the latest example of financial mismanagement in Ghana. While President Mahama has promised reforms, the big question remains:
Will these changes be implemented, or will corruption continue unchecked?
As the government reviews procurement laws, Ghanaians will be watching closely to see if real action is taken to prevent further financial losses.
For now, the call for accountability is louder than ever, and citizens are demanding better governance, transparency, and proper financial management.
Final Thoughts
The GH¢21 million lost through sole-source procurement is a wake-up call for Ghana to strengthen its financial management systems. With billions lost to poor procurement practices and corruption, urgent action is needed to protect taxpayer money and ensure fair contract awards.
Will the government take real action to prevent future losses, or will Ghana continue to suffer from politically motivated contracts? The coming months will be crucial in determining the future of public procurement in Ghana.
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