By Kwabena Kankanfo Oheneba Gyebi – MCIPS
Procurement Specialist, University of Cape Coast
1. Executive Summary
This policy paper provides a comprehensive analysis of the Value for Money (VFM) Office Bill, 2026 and its relationship with the Public Procurement Act, Act 663, 2006 as amended in Ghana.
Both legal frameworks aim to enhance the efficiency and effectiveness of public spending, yet they adopt different approaches and mechanisms to achieve their goals.
The Value for Money Office Bill focuses on ensuring that public funds are utilized to maximize benefits, emphasizing accountability, transparency, and the evaluation of social and environmental impacts alongside financial considerations.
It promotes a culture of performance measurement, aiming for continuous improvement in public service delivery.
For example, the bill could require evaluations of how public health expenditures affect overall community health outcomes, not just the costs of medical supplies.
In contrast, the Public Procurement Act, Act 663, 2003 an amended regulates the procurement processes of public entities, ensuring fairness, transparency, and competition in awarding contracts.
It establishes specific procedures for tendering and contract management, fostering a level playing field for suppliers and contractors.
Despite their differences, both frameworks share similarities, including their commitment to transparency, accountability, and serving the public interest.
However, the VFM Bill offers a broader perspective on public spending by evaluating overall value and impact, while the Public Procurement Act focuses primarily on procurement processes.
This paper argues for strengthening the existing Public Procurement Act rather than pursuing a separate VFM Bill.
Such an approach can streamline processes, enhance coherence in public financial management, and build on existing frameworks to improve procurement outcomes.
Recommendations include amending the Public Procurement Act to incorporate VFM principles, developing training programs for procurement officials and other stakeholders, establishing robust monitoring mechanisms, and engaging stakeholders in the reform process.
Ultimately, by integrating value-for-money principles into the Public Procurement Act, Ghana can enhance its public financial management, ensuring that public funds are spent wisely to improve developmental outcomes and the quality of life for its citizens.
2. 0 Background
The landscape of public procurement in Ghana has evolved significantly over the years, with the introduction of various legislative frameworks aimed at enhancing transparency, accountability, and efficiency in public spending.
The Public Procurement Act of 2003 (Act 663) as amended established a regulatory framework for public procurement, setting out procedures for the award of contracts and the management of public resources.
This Act was designed to ensure fairness and competition in the procurement process, thereby reducing corruption and promoting integrity in public financial management.
In recent years, the Ghanaian government has recognized the need to further improve public spending outcomes, leading to the introduction of the Value for Money Office Bill, 2026.
This proposed legislation aims to assess the effectiveness and efficiency of public expenditures by emphasizing the need for comprehensive evaluations of projects based on their social, economic, and environmental impacts.
As Ghana continues to grapple with challenges related to public expenditure, such as inefficiencies, corruption, and mismanagement, the integration of value-for-money principles into existing procurement frameworks is critical for enhancing overall governance and accountability in public financial management.
The need for effective public procurement is underscored by the increasing demand for public services and infrastructure, necessitating a shift towards more strategic and outcome-oriented approaches.
3.0 Value for Money Office Bill, 2026
The objective of the bill is to ensure public funds are utilized to maximize benefits derived from expenditures.
Its focus is to establish criteria for evaluating cost-effectiveness, including social and environmental impacts.
This could involve assessing the long-term benefits of infrastructure projects on local communities, such as improved access to education and healthcare.
The expected outcomes is to foster performance measurement and continuous improvement in public service delivery.
For instance, the bill require annual evaluations of major projects to ensure they meet established performance benchmarks.
3.1 Public Procurement Act 663, 2003 as amended
The objective of the Act is to regulate procurement processes to ensure fairness, transparency, accountability and competition.
Its focus is to establish procedures that promote integrity and prevent corruption.
The Act mandates competitive bidding for contracts above a certain threshold, ensuring that procurement processes are open and competitive.
The expected outcomes are to create a level playing field for suppliers, enhancing competition and quality of goods and services.
For example, adherence to the Act during procurement of some medical supplies during the COVID-19 pandemic helped ensure that contracts were awarded transparently and competitively, thereby minimizing opportunities for corruption.
3.2 Similarities
There are a number of similarities between the two frameworks.
Commitment to Transparency: Both the VFM Bill and the Public Procurement Act emphasize the importance of transparency in public financial management.
They advocate for open processes and clear reporting mechanisms to allow public scrutiny of government spending.
Accountability: Each framework seeks to hold public officials accountable for their financial decisions.
This includes mechanisms for auditing, reporting, and oversight to ensure that funds are used appropriately and effectively.
Public Interest: Both aim to serve the public interest by ensuring that government spending is conducted in a manner that benefits citizens.
They seek to enhance the quality of public services and infrastructure, ultimately improving the welfare of the populace.
3.3 Differences
Scope
The VFM Bill has a broader focus on overall value and impact of public spending.
It looks beyond mere compliance with procurement rules to assess whether the outcomes of spending align with national development goals.
For instance, a project funded by public money may be evaluated not just on cost but also on how it contributes to job creation and social equity.
The Public Procurement Act is specifically concerned with the procurement process, detailing how contracts should be awarded and managed.
Its primary emphasis is on procedural fairness rather than the broader impact of spending.
This narrower focus can sometimes limit the ability to evaluate the effectiveness of procurement decisions.
Implementation Mechanisms
The VFM Office Bill introduce new metrics and evaluation frameworks for assessing value, including performance indicators that measure the effectiveness and efficiency of public projects.
For example, it mandate that government agencies report on the social return on investment (SROI) for infrastructure projects, allowing for a clearer understanding of the broader impacts of public spending.
The Public Procurement Act relies on established procurement procedures and regulations, including bidding processes, evaluation criteria, and contract management protocols.
It is more prescriptive in nature, focusing on compliance with specific rules.
For example, it mandates the use of competitive bidding for contracts above a certain threshold, ensuring fairness in the procurement process.
Flexibility
The VFM Bill allow for more flexible approaches in achieving value for money, enabling agencies to adapt their strategies based on specific project needs and contexts.
This flexibility can foster innovation and responsiveness in public service delivery.
For instance, it allow for alternative procurement methods, such as public-private partnerships (PPPs), to achieve better outcomes in infrastructure development.
The Public Procurement Act follows strict guidelines that may limit innovative procurement strategies.
While it ensures fairness and transparency, it can sometimes hinder agile responses to changing circumstances or emerging needs.
For example, during emergencies, such as natural disasters, the rigid procurement processes may delay the timely delivery of essential services, as seen in the procurement of relief materials during the 2020 floods in Ghana.
3.4 Strengthening the Public Procurement Act
In order to straighten the Public Procurement Act, the following strategies are to be ensured.
Avoiding Duplication: Creating a separate VFM Bill could lead to overlapping regulations and confusion in implementation.
Strengthening the existing Public Procurement Act can streamline processes and enhance coherence in public financial management, reducing the administrative burden on public institutions.
Leveraging Existing Frameworks: The Public Procurement Act already provides a solid legal foundation for procurement practices.
Enhancing it with value-for-money principles can ensure that the procurement process is not only fair but also efficient and effective.
This approach allows for the integration of VFM concepts into an established framework, minimizing disruption and resistance from stakeholders.
Capacity Building: Investing in the capacity of procurement officials and institutions under the existing act can lead to better implementation of value-for-money principles without the need for new legislation.
Training and resources can be directed toward improving skills in cost-benefit analysis, project evaluation, and performance measurement.
For example, the Ghana Public Procurement Authority can organize workshops to train officials on integrating VFM assessments into their procurement processes.
Cost-Effectiveness: Strengthening existing laws often requires fewer resources than developing and implementing new legislation, making it a more cost-effective approach.
This can lead to quicker results in improving public procurement outcomes, as stakeholders are already familiar with the existing framework.
Additionally, it can reduce the time and resources spent on legislative processes, allowing for more immediate focus on practical implementation.
Promoting Synergy: By integrating VFM principles into the Public Procurement Act, there is potential for synergy between the two frameworks.
This can foster a holistic approach to public financial management, where procurement practices are aligned with broader objectives of efficiency and effectiveness.
Such alignment can enhance overall governance and accountability in public spending.
4. RECOMMENDATIONS
Amend the Public Procurement Act: Consider legislative amendments to incorporate specific value-for-money criteria and evaluation metrics within the existing procurement framework.
This can enhance the focus on outcomes while maintaining the integrity of the procurement process.
Such amendments should be developed in consultation with key stakeholders to ensure relevance and practicality.
Develop Training Programs: Implement training programs for procurement officials and other stake holders that focus on value-for-money principles, performance measurement, and innovative procurement strategies.
This will build the necessary skills to apply VFM concepts effectively and improve the overall competency of procurement teams.
Training should include practical case studies and best practices from both local and international contexts.
Establish Monitoring Mechanisms: Create robust monitoring and evaluation systems to assess the effectiveness of procurement processes in delivering value for money.
This can include regular audits, performance reviews, and public reporting.
Establishing clear benchmarks and indicators will facilitate ongoing assessment and improvement.
For instance, the introduction of a public dashboard to track procurement outcomes could enhance transparency and accountability.
Engage Stakeholders: Involve various stakeholders, including civil society, private sector representatives, and procurement experts, in discussions about enhancing the Public Procurement Act.
Their insights can provide valuable perspectives on practical challenges and opportunities for improvement.
Stakeholder engagement can also foster buy-in and support for reforms, as seen in successful procurement reforms in countries like South Africa, where stakeholder involvement was crucial.
Pilot Value-for-Money Initiatives: Launch pilot projects that implement value-for-money principles within the framework of the Public Procurement Act.
These initiatives can serve as models for broader application and provide valuable lessons on best practices and potential challenges. Successful pilots can help build momentum for further reforms.
For example, a pilot project focused on green procurement could demonstrate the benefits of considering environmental impacts in procurement decisions.
Enhance Public Awareness: Increase public awareness of procurement processes and value-for-money principles through informational campaigns.
Educating citizens about their rights and the importance of transparency in public spending can foster greater civic engagement and oversight.
This awareness can empower citizens to hold government accountable for its procurement decisions. Campaigns could leverage social media and community workshops to reach diverse audiences.
5.0 CONCLUSION
Both the Value for Money Bill and the Public Procurement Act of Ghana share the common goal of maximizing the efficiency and effectiveness of public spending.
However, their approaches differ significantly.
Rather than pursuing separate legislation, it is advisable to strengthen the existing Public Procurement Act to incorporate value-for-money principles.
This approach will enhance coherence, improve efficiency, and ultimately lead to better outcomes for public financial management in Ghana.
By leveraging existing frameworks and fostering capacity building, Ghana can achieve its goals of transparency, accountability, and optimal resource utilization in public procurement.
Strengthening the Public Procurement Act will not only improve procurement processes but also contribute to the broader objectives of national development and public welfare.
Through practical examples and a commitment to continuous improvement, Ghana can set a benchmark for effective public financial management in the region. By ensuring that public funds are spent wisely, Ghana can enhance its development outcomes and improve the quality of life for its citizens.
Additional Considerations for Future Research and Policy Development
To further enhance the effectiveness of public procurement and value for money in Ghana, several areas warrant additional research and policy development:
