The government is to collapse the Ghana Supply Company Limited and the GNPA Limited into a new institution - the Procurement Services Company - to help streamline public procurement and supply processes in the public sector. A document on the merger has been finalised by the Ministry of Trade and Industry and is now ready for submission to Cabinet for review and approval.
The Minister of Trade and Industry, Mr Ekow Spio-Gabrah, told the GRAPHICBUSINESS that the approval was expected earlier in the year to help pave the way for the full integration of the two institutions into the new company. He did not say if the integration required parliamentary approval but explained that it was expected to help create a robust procurement company capable of influencing public sector purchases and supply of goods and services in favour of local producers.
"The new Procurement Services Company, if approved by Cabinet and established, will have the specific responsibility of marketing Made-in-Ghana (MiG) products so that there will be public procurement of those products with the view to strengthening the Ghanaian economy, create jobs and protect our industries," the minister said after a media interaction in Accra.
The initiative is in line with the government's MiG drive, which is aimed at whipping up patronage for locally produced goods and services. Currently, public procurement of goods constitute about 70 per cent of annual purchases and expectations are that the woes of local producers would be reversed if half of the sector's requirements are procured locally. "We all know that the public sector is the biggest spender and if we can get public institutions to patronise more of MiG products, then we will be finding markets for our companies and by that they can expand, create more jobs and be sustainable businesses," Mr Spio-Gabrah, who chairs the MiG Committee, added.
It is not clear what role the Public Procurement Authority would play should the merger go through, given that the authority is currently in-charge of all public sector procurement processes.
The media encounter, which was at the instance of the Institute of Financial and Economics Journalists (IFEJ) and the Made-in-Ghana (MiG) Committee, was aimed at giving members of the institute and other practitioners firsthand information on the activities of the committee established two years ago. It was also give updates on the works of the committee, which was commissioned by the President in 2014 to help whip-up public support and patronage for locally produced goods.
It has since developed the MiG Logo, which is now being used by local producers on their products for the local and international market. Impact of imports on indices The push for increased patronage for MiG products is expected to help cut down on the country's import bill, which is having a toll on key macroeconomic indices, including the exchange rate, balance of trade, the debt stock and the ratio of debt to total economic output, measured by gross domestic product (GDP)
In 2013, the country expended over US$1.5 billion on consumables, majority of which were either produced locally or could be produced by local companies. The value of imported consumables helped pushed the national import bill to US$17 billion in that year, the President, Mr John Dramani Mahama, said in his 2014 State of the Nation Address. This is unacceptable, the minister said at the event, which was attended by members of the committee.
Although the problem required continuous push for increased patronage of locally produced products over imported substitutes, Mr Spio-Gabrah said it could have been better if public institutions procured majority of their products locally. "That is one of the reasons for the merger. If they (the Procurement Services Company) can assemble the 1,000 plus Ghanaian companies producing various products and services, then our ministries, departments and agencies (MDAs) will not claim that they are not aware that company A produces this and company B produces that," the minister said.
The merger is also expected to relieve the two institutions of some structural defects, which have impeded their proper functioning. The two companies are currently wallowing in debt, with that of the GNPA, which specialises in procurement and supply of agricultural raw material inputs to local industries, running into GH¢500 million. The minister, however, explained that issues of debt on the part of any of the two companies "will be considered within the merger processes."