Ghana’s efficient country system for aid management not complemented by donor conduct – Study

 By Emmanuel K. Dogbevi

A major new study on aid effectiveness to be published in the run-up to the High Level Forum on Aid Effectiveness (HLF-4) in Busan, South Korea has found that even theough Ghana has made significant progress in applying  Overseas Development Assistance (ODA) or international aid by using country systems, the unwillingness of donor countries to change their attitude is a drawback to achieving the objectives of the Paris Declaration (PD) and Accra Agenda for Action (AAA).

The study conducted by the European Network on Debt and Development (Eurodad), says ” While Ghana has made much progress in reforming country procurement systems, this progress does not seem to have been complemented by changes in donor conduct. Donors’ own reporting suggests that the extent to which they use country systems has not changed a great deal.”

The report to be published at the end of November 2011 focuses on six country case studies including Namibia, Uganda, Bangladesh, Bolivia, Nicaragua and Ghana.

The report titled, “How to spend it: smart procurement for more effective aid,” will be published to assess progress towards these aid effectiveness commitments. The report includes suggestions for a new and ambitious agreement in Busan and it constitutes one of the few civil society research reports ahead of the HLF4.

The report investigates how aid is actually spent, who the beneficiaries are and what the local economic impact is.

In its summary on Ghana,  titled: “For whose gain? Procurement, tied aid and the use of country systems in Ghana”,  the report argues that “the use of recipient country systems can increase the effectiveness of ODA by enhancing ownership and harmonization, reducing transaction costs and strengthening institutions.”

“Channelling ODA through country systems facilitates the alignment of aid allocation to national development plans. Using country systems is therefore a central pillar of the current aid effectiveness reform agenda as agreed on in international agreements, in particular the Paris Declaration and the Accra Agenda for Action,” it adds.

According to the report almost all of the donors interviewed for the study noted that in recent years progress has been made in improving Ghana’s public financial management and procurement systems.

“Past and ongoing reforms have enhanced donors’ confidence in the country systems, and scaled-up budget support has led to open dialogues between donors and Ghanaian authorities on the quality of the Public Financial Management (PFM) system, and how to improve it,” it says.

During interviews for the report most donors said they would channel more funds through the country system, in particular through the Multi-Donor Budgetary Support (MDBS) framework.

“However, the actual figures in the most recent official assessment, the 2008 Survey on Implementing the Paris Declaration (PD), give a different picture: the proportion of aid using country public financial management systems actually decreased to 57 per cent in 2007 from 62 per cent in 2005, contrary to the commitments made by donors,” the report says.

The report however, noted that the use of country procurement systems showed a slight increase, from 52% to 57%.

While it indicates that some donors, such as France and the Netherlands make full use of the country procurement system for all their ODA, it has been totally side-lined by others such as the USA and the African Development Bank (AfDB).

The report however says in a previous research on the use of country systems in Ghana carried out by Eurodad, it found that the US aid agencies are constrained by policies and regulations set at headquarter level. Moreover, the large number of vertical funds in Ghana, in particular in the health sector is also a contributing factor for the continued underuse of the country systems, despite an increase in their quality.

According to the report, some donors, mainly European Union (EU) Member States, explained that although they committed to using country systems as a first option, they use their own procurement procedures in cases where the procurement involves supplies or services which need to be procured internationally since they are not available on local markets.

Donor representatives also pointed to persistent structural or political constraints for using country systems. These are for example risk aversion by donor country parliaments which require that spending is visible and attributable, and well-documented and properly accounted for. Real or perceived fiduciary risks lead to the continued use of parallel implementation by donors. Some donors also continue to tie technical assistance and provide consultancies in kind rather than in cash, it said.

Citing a study by Osei Baffour titled “How tied aid affects the cost of aid-funded projects in Ghana“, in which he drew the conclusion that “there is significant mark-up on the prices of the tied funded inputs, and that the mark-up translates to a significant cost to Ghana,” the report said empirical research has shown that tied aid makes aid less efficient and less effective.

Since 2001, Ghana, the report noted  has undertaken a large number of reforms of its Public Finance Management (PFM) system in general, and the procurement systems in particular. Central is the Public Procurement Act, passed in 2003, which provides a comprehensive legal framework for public procurement. New institutions such as the Public Procurement Authority (PPA) and the Appeals and Complaints Panel have been set up to formalise and improve procurement processes, it says.

It also acknowledged that the development of software for procurement planning, a standard bid document and short –term training modules as well as the Public Procurement Model of Excellence (PPME) for assessment and monitoring have aided in enhancing the image of public procurement.

Several interviewees, the study said, explained that the PPME represents a significant step forward for monitoring the performance of public procurement entities and their compliance with the legal provisions.

The PPA and the Auditor General have indicated that the implementation of the Act has reduced leakages and led to more transparency in public spending. However, many government officials’ respondents bemoaned the delays associated with the implementation, it added.

The study therefore, recommends among others that all donors should deliver on their aid effectiveness commitments and use country procurement systems as the first option, while at the same time providing scaled-up support to strengthen local procurement capacities and improve accountability of the procurement process.

It suggests further that, where donors continue to procure themselves, they should end all practices of formal and de facto aid tying. They should also thoroughly assess their procurement practices and remove all barriers which hinder better access and participation of local economic actors, with the final aim of maximizing the share of contracts which are awarded to Ghanaian firms.

How Ghana curbed maternal mortality with international aid

By Emmanuel K. Dogbevi

Adwoa Kesewa is 19-years-old. She has to drop out of Junior High School(JHS) when she got pregnant. Her 21-year-old boyfriend Kwesi Prah also a school drop-out, suggested abortion, but Adwoa refused, citing the fear of death and the fact that she has heard if things went wrong she might never be able to conceive in the future.

In anger and frustration, he warned her sternly to stay away from him if she keeps the pregnancy as he is in no position as a truck pusher to support her and the baby. “You should not even mention me as the one responsible for your pregnancy! You are on your own now,” he growled. Kwesi bare survives on his meagre income as a truck pusher at one of the markets in Accra to be able to support a mother and a child.

“You said you loved me, and you will never leave me. But you are now turning your back to me, is this my reward for all that I have done for you?,” Adwoa muttered with tears streaming down her cheeks.

Adwoa’s story is common in urban and rural Ghana, where young people without sufficient sex education, with little or no vocational training and no jobs become parents when they are not ready.

With no regular sources of income or sufficient funds they are unable to acquire ante-natal care, and the pressure on the national budget for health, especially as malaria management takes a large chunk of the resources other areas within the health sector are deprived of funds.

In 2009, Ghana’s Minister of Health at that time, Dr. George Sipa-Adjah Yankey said the government spends over $760 million every year treating malaria.

The amount used in treating malaria is almost the entire budget for the health sector. In the 2009 budget for instance, an amount of over GH¢921 million was allocated to the health sector. What that means is that very little is left of the budget to treat other diseases.

The British government intervened by providing funds for maternal health care in Ghana.
In 2008 the British government provided a grant amounting to £42.5 million to support a government programme to provide free maternal health care for women. The programme is aimed at reducing the country’s maternal mortality ratio by three quarters before 2015.

In 2003, Ghana’s maternal mortality ratio was high. The country was recording one death per every 35 women during pregnancy or child birth. A World Health Organisation (WHO) report put the maternal mortality ratio in the country at 540 deaths per 100,000 live births.

But before the inception of the free maternal health care programme in Ghana in 2008, the World Bank funded the National Health Insurance programme in 2006, through which the country made a strong effort to extend health insurance coverage to people employed in the informal and rural sectors. More than half of Ghana’s population is now covered, according to the World Bank.

About 70 percent of the insured, including children and pregnant women, are exempt from paying premiums. The 2009 Demographic and Health Survey (DHS) shows at least 90 percent of pregnant women use antenatal care services, and births attended by skilled health staff rose from 40 percent (1990) to 59 percent (2008).

Following the beginning of the free maternal health care programme, Ghana received commendation from the United Nations Population Fund (UNFPA).

The Executive Director of the UNFPA, Ms Thoraya Ahmed Obaid, said it was good that Ghana introduced the programme as a way to control the high maternal mortality rate in the country in efforts to meet the Millennium Development Goals (MDG5), which aimed at improving maternal health.

She was cited in a report by the Ghana News Agency (GNA) as saying: “This means if the programme is well sustained, all pregnant women, right at the community level would have access to free maternal health care, thus preventing a woman from dying from childbirth”

However, there have been calls for more to be done to make the programme sustainable and some challenges have been identified.

One of the major challenge facing the programme is ironically low patronage of antenatal care in some health facilities in Ghana.

According to a GNA report the low patronage of antenatal care and normal delivery care services at the lower level health facilities in Ghana could affect the sustainability of the free maternal health services.

The report citing Dr Emmanuel Ankrah Odame, head of the Public Health Division of Ridge Hospital said cost of free maternal services have been consistently higher at high level facilities putting so much stress on the British grant meant to improve financial access to maternal services.

Dr Odame said in order to reduce Ghana’s maternal mortality rate from the 451 per 100,000 live births and meet the Millennium Development Goal 5 (MDG5) by 2015, there was the need to sustain the free maternal health services and ensure that people access the lower levels of health facilities.

According to him, when the pressures put on the high level hospitals are not lowered the facilities in the southern center of the country alone could exhaust the British Grant in 13 years.

Dr Odame, according to the report therefore, recommended the placement of specialists in the lower facilities to attend to clients, saying, “this will let pregnant women access the lower level facilities and not use the issue of no specialists as an excuse.”

Despite the challenges however, available research data shows that Ghana has made tremendous strides in curtailing maternal and child mortality.

An estimation taken in 2001 showed that maternal deaths in the year 2000 stood at 740 per 100,000 live births.

However, the 2010 World Health Organization Report shows that maternal mortality has reduced to 560 per 100,000 live births in the country.

These achievements couldn’t have been possible without international assistance, looking at the fact that other areas within the health sector are competing for scarce resources. And young women like Adwoa, would have become part of the statistics without the free maternal health care programme.

As the world gathers in Busan, South Korea in November for the 4th High Level Forum on Aid Effectiveness to discuss the Paris Declaration and Accra Agenda for Action (AAA), Ghana’s success in the area of maternal health care which has been implemented with funds from international donors can be showcased as a success story of aid effectiveness.

Tackling corruption is necessary for achieving aid effectiveness

By Emmanuel K. Dogbevi


For most developing countries, international development assistance (IDA) or aid is a very important component of national budgets without which a lot of development projects in health, education, water and sanitation, security, infrastructure development and transportation could not be achieved. Ghana for instance received as much as $1.2 billion in grants in 2009.

However, corruption remains one of the biggest means of revenue and income loss to developing countries.

While it is not easy to define corruption in one specific term, its different manifestations lead to loss of much needed money that otherwise could have gone to use in the public good or welfare of the majority. Corruption is an effective means of siphoning public funds into private pockets of individuals and companies.

A study by the World Bank says nearly $1 trillion is lost to corruption around the world every year.

The World Bank also says billions of dollars are lost through corruption in developing countries each year.

And for a continent like Africa that has an infrastructure financing gap of $35 billion per year, tackling corruption must be a priority. Ghana for instance requires $1.6 billion annually for its infrastructure development.

According to the World Bank, although the exact magnitude of the proceeds of corruption circulating in the global economy is impossible to ascertain, estimates demonstrate the severity and scale of the problem.

“An estimated $20 to $40 billion is lost to developing countries each year through corruption”, the Bank said in a report titled “Barriers to Asset Recovery” which was released Tuesday, June 21, 2011.

According to the U4 Anti-Corruption Resource Centre, 2007, 25% of the GDP of African states is lost to corruption. It adds that the amount lost to corruption each year totals $148 billion. And this amount it says covers the full range of corruption, from petty bribes to inflated public procurement contracts.

The World Bank, Star Report of 2007 also indicates that proceeds of corruption in bribes received by public officials from developing and transition countries are estimated to be between $20 billion to $40 billion per year, and this figure is equivalent to 20% to 40% of Official Development Assistance (ODA).

The devastating effects of corruption can be felt in poor quality of services in health, roads and education.

A Transparency International Global Corruption Report of 2006 estimates that 50% of health funds is lost to corruption. The report says this is the estimated percentage of allocated funds that do not reach health facilities in Ghana.

A UNDP report titled Accelerating Human Development in Asia and the Pacific released in 2008 says corruption accelerates the depletion of natural resources, notably primary forests and inshore fishing grounds, which many communities rely on for their livelihoods.

And citing an example, the report says the government of Indonesia has estimated that lost forest revenue costs the nation up to $4 billion a year or around five times the annual budget for the Indonesian department of health.

Corruption is also a major setback to achieving the Millennium Development Goals in many developing countries.

According to a Transparency International Report released in 2008, corruption raises the cost of connecting a household to a water network by as much as 30%, inflating the cost of achieving the MDG on water and sanitation by more than $48 billion or nearly half of annual global aid outlays.

It has been found that Ghana had met only 45% of the commitments it had pledged to improving water and sanitation in Washington DC in 2010 where the government pledged to invest $200 million a year in providing water and sanitation, which means that the country is still not going to meet its MDG target.

Corruption is a major hindrance to aid effectiveness and therefore, should be one of the issues that the 4th High Level Forum on Aid Effectiveness (HLF-4) in Busan, South Korea gives considerable attention to.

The principles of the Paris Declaration which stipulates Ownership, Alignment, Harmonisation, Results and Mutual Accountability can be effectively implemented if corruption is put on the radar.

The ideals of the Paris Declaration that it is now the norm for aid recipients to forge their own national development strategies with their parliaments and electorates (ownership); for donors to support these strategies (alignment) and work to streamline their efforts in-country (harmonisation); for development policies to be directed to achieving clear goals and for progress towards these goals to be monitored (results); and for donors and recipients alike to be jointly responsible for achieving these goals (mutual accountability) can effectively be reached if corruption is tackled.

In the same vein, the Accra Agenda for Action or AAA should also be pursued with zero-tolerance for corruption.

The AAA which takes stock of progress and sets the agenda for accelerated advancement towards the Paris targets, proposes the following three main areas for improvement:

Ownership – that countries have more say over their development processes through wider participation in development policy formulation, stronger leadership on aid co-ordination and more use of country systems for aid delivery.

Inclusive partnerships – which requires that all partners – including donors in the OECD Development Assistance Committee and developing countries, as well as other donors, foundations and civil society – participate fully.

Delivering results – that aid is focused on real and measurable impact on development.

With the counter-productive and development-eroding effects of corruption, the hard work of dedicated civil servants, citizens, honest governments and civil society in developing countries won’t amount to the money’s worth of donor countries and agencies, and development targets can’t be attained no matter how much aid money is given to developing countries if the canker of corruption is not tackled headlong.

The development of country systems and capacity development must factor the fashioning of anti-corruption mechanisms to keep an eye on the efficient and effective use of aid.