The Vice President, Dr. Mahamudu Bawumia, has revealed that the budget often allocated for one hospital project in Ghana can build 5 more hospitals.
According to him, such huge inflation in project cost arises from a myriad of problems such as corruption.
He made the revelation while delivering an address at a Value for Money Conference in Accra on Monday.
Dr. Bawumia, who is also the Chairman of the NPP government’s Economic Management Team, has in various public commentaries insisted that the New Patriotic Party government has resolved to ensure value for any money it spends on infrastructural projects.
He said project costs in Ghana has been found to be far above the average in other parts of the world.
“A comparative analysis reveals that better quality hospitals are currently built at more cost effective rates in places like India than in Ghana,” Bawumia said.
While comparing the average contract cost of an 80-bed hospital in Ghana to that of a 150-bed hospital built by the African Development Bank in Ghana few years ago, Bawumia said although the government’s project cost included tax exemptions, it’s project cost far exceeded what the AfDB used for a much bigger hospital.
“Ghana constructs 60-80 bed district hospitals for $25 million, the African Development Bank constructed a 150 bed hospital in Accra a few years ago for GHC5.76 million or $1.3 million which was without equipment. Even if we have to equip this hospital for some $1 million or $2 million, the total cost will be some $3 million,” he said.
“So how come we are building 60-80 bed hospitals for $25 million, a this figure does not include the tax exemptions granted on equipment imported for the hospitals. So for one hospital that we are building, we could have built 6 hospitals in Ghana,” Bawumia added.
It seems to be common knowledge in Ghana that most infrastructural project contracts are inflated due to corruption including the payment of kickbacks.
According to the Africa Infrastructure Diagnostic report, Ghana loses about $1.1 billion annually due to project delivery inefficiencies.
Other reports have suggested that the government spends more on projects than private investors do on similar projects.
The Vice President, however, said the government is determined to remedy the situation and ensure that there is value for money on all government contracts.
“It is in this respect that the government under the leadership of President Nana Akufo-Addo has committed to seeking the investment required for the construction of the roads, schools, and hospitals and at the same time maximizing the efficiency of existing expenditure on these infrastructures to ensure value for money. It is estimated that on average we are paying significantly more on contract values and this is because of corruption,” he said.