The Institute for Liberty and Policy Innovations is calling for the development of a decentralized robust monitoring system for economic and social projects to avoid crumbs of wasteful spending by the Ghana government.

The award-winning Think Tank through a public perception report identified the major factors resulting in wasteful spending as the lack of transparent and accountable procurement processes as well as weak monitoring processes for projects. The report discovered that weak bidding systems, inadequate oversight mechanisms, and instances of corruption lead to inflated contract prices, and wastage of public funds.

Major factors discovered through the Representative Perception Polls include, presidential travels, the infamous national cathedral project, abandonment of the Saglemi Housing units, government size, youth employment programs, the banking sector clean up, the fight against galamsey among others.

The report states that 92% of Ghanaians are of the view that the government is wasting their taxes due to lack of accountability and transparency in the implementation and execution of policies and programmes to determine value for money.

One of the areas that results in wasteful spending is financial irregularities. The Auditor General’s Report from 2014 to 2021 disclosed a total of GH¢15,154,264,534.25 (GH¢15.1 billion) as financial irregularities which are often associated with non-compliance with the Public Financial Management Act 2016 (Act 921) and omission of information relating to financial transactions or matters such as embezzlement, fraud, and the falsification of records to misappropriate assets.

Another accounting factor for wasteful spending is reported ghost names on the government’s payroll. The perennial bloating of government payroll with Ghost Names been causing taxpayers millions of Cedis. In 2015 alone, about 2,913 ghost names were found on the Ghana Education Service Payroll after staff auditing and the country loses approximately GH100 million every year to payroll fraud. Ghana’s engagement with the International Monetary Fund (IMF) for bailout also discovered this fraud. As part of the conditions, an employee audit on its payroll was conducted across the country and it was observed in 2015 and 2022 IMF’s 16th and 17th financial programme for Ghana that taxpayers cough out GHC100 million annually to pay ghosts.

The Saglemi Housing project is a typical example of the government's wasteful spending as they failed woefully to generate any returns or fulfil its intended objectives due to lack proper monitoring mechanisms to ensure value for money. Therefore, the resources already invested in it, such as finances, time, materials, and manpower, could not be replaced.

Saglemi Housing Project was birthed after the government in 2013, secured a loan of $200 million from Credit Suisse International for the construction of up to 5,000 affordable housing units on 2,172 acres of land under Engineering-Procurement-Commission (EPC) Agreement with Construtora OAS Ghana Limited (the Brazilian company). However, out of the 5,000 proposed housing units, only 668 were completed but the Attorney General reported that the completed houses were not habitable and that the project at the site were only worth $ 64 million, far from the stipulated $196 million spent. Currently, the government is in court with actors who were in charge of the project and consequently dragging its feet to continue the project claiming it will be more expensive to do so.

These and many other wasteful initiatives of which taxpayers are still bearing the cost are the reasons ILAPI is calling for a robust technologically-inclined monitoring system including the blockchain to track the progress of every useful project to avoid creating waste.

The 2022 report also revealed that other contributing factors of wasteful spending are obsolete government programs and agencies that often engage in duplicate functions, resulting in inefficient resource allocation and unnecessary administrative costs.

The policy research institute recommended that streamlining such programs and agencies will drastically reduce waste and redirect resources to more productive areas adding that deficient evaluation of project feasibility, unrealistic cost estimates, and poor monitoring of expenditures often amount to cost overruns and misallocation of resources.

To mitigate wasteful spending and gain citizens trust with their tax usages, the report recommended the strengthening of budgetary processes and introducing effective oversight mechanisms in promoting a culture of fiscal responsibility within the government financial architectures.

Also, there should be fiscal covenant responsibility laws and rules which will regulate government spending to enhance transparency and accountability. It suggested that a comprehensive review of government programs and agencies should be conducted to identify redundancies and inefficiencies. Eliminating or merging redundant entities or institutions can result in cost savings and improved service delivery.

The organization believes that the implementation of robust monitoring systems, promoting competitive bidding, and imposing strict penalties for fraudulent engagements would help save taxpayers contribution. Besides, engaging citizens and involving them in what their actual needs are play a significant role in curbing wasteful spending by encouraging public scrutiny of government expenditures.

Read full Report here: www.ilapi.org/reports