The Ghana Union of Traders Association (GUTA) has called for a simplification of the procurement system to allow multiple businesses, particularly, small and medium enterprises (SMEs) to benefit from public spending next year.
It said the current system, where one winner of a bid in public procurement was always allowed to execute the entire contract was unfair and risked limiting the gains of the government’s historic fiscal expansion programme for next year.
While lauding the government for projecting to spend GH¢15.62 billion more and also double investments in infrastructure next year, the President of GUTA, Dr Joseph Obeng, said the association was concerned that those expenses would not benefit the base of the economy if one entity or individual was allowed to execute multimillion cedi contracts for the state.
He was sharing his views on the 2019 Budget Statement and Economic Policy of the government.
Consequently, Dr Obeng told the Daily Graphic last Tuesday that GUTA would be engaging the government through the Ministry of Procurement to encourage packaging works or services in lots to allow for multiple bidders for the same service or work.
Ghana News Headlines
For latest news in Ghana, visit Graphic Online news headlines page Ghana news page
He expressed the belief that if implemented well it would help spread the national cake to many businesses, thereby translating the projected fiscal expansion — the highest annual increment since 1992 — into direct growth for businesses, especially those in the lower end of the economy.
“For instance, if government is procuring, say, 500,000 pieces of a particular item, the price and all that go with it will definitely be high and we cannot bid.
Because of that one entity or even a foreign bidder can win. But if you break it into several pieces, many more people can win and it will also increase the sharing of the national cake,” Dr Obeng said.
Like many post-budget reviewers, Dr Obeng observed that the 2019 Budget was an ambitious revenue and expenditure estimation, which showed the government’s preparedness to spend more after two years of fiscal consolidation.
He said the budget “gives us a glimmer of hope for the coming year” after two years of less activity in the economy.
“Basically, we want to embrace the budget because the whole budget is quite ambitious, to tell you the truth.
“We are excited that they now want to spend. When they first came, they were concentrating on settling down and so no major infrastructural development took place and those things also affect businesses.
“Now with this ambitious infrastructural development planned for next year, we are going to embrace it and take advantage of the opportunities in it,” he said, citing the proposed construction of roads, schools and hospitals as areas GUTA members would be looking to exploit.
Asked how the proposed investments in public infrastructure will benefit GUTA members, Dr Obeng said: “I, for instance, sell electrical products and so building schools, hospitals and roads will surely trickle down for businesses because we all know that when government does not spend, business becomes dull.
He explained that over the years, big companies had used their clout and financial muscle to deny SMEs, which constitute the majority of businesses, from benefiting from public contracts and spending in particular.
The GUTA president also reminded the business community of the need to pay taxes to enable the government to fund its programmes.
Dr Obeng said with the ambitious task ahead, the government would surely need to mobilise more revenue to be able to execute, hence the need for all to pay their taxes.
He, however, reminded the government of the need to give tax incentives to compliant taxpayers to help increase collection.