President John Dramani Mahama’s recent remarks on the striking difference in construction costs between private and government projects have reignited an important national conversation.
At his first press briefing of his second term, the President questioned why a private mining company such as Gold Fields could build a 10,000-capacity stadium in Tarkwa at a fraction of the state’s usual expenditure.
This demonstrates his commitment to ensuring that government spending delivers real value for money, which is commendable because it sets an important tone for prudent public financial management.
However, while his observation is refreshing, it also highlights deep systemic weaknesses that require a bold rethink of governance and accountability in Ghana.
The comparison between private and public construction costs is troubling and invites closer scrutiny.
It has long been alleged that foreign mining companies sometimes inflate the cost of their corporate social responsibility projects.
These inflated costs are believed to secure tax benefits or other favourable concessions from the state, under the assumption that weak oversight institutions will not detect or challenge them.
However, even if such projects are inflated, they often remain cheaper than similar state-funded initiatives.
This reality paints a grim picture of how poorly Ghana manages its public finances and raises serious doubts about the effectiveness of government procurement systems.If an alleged inflated private price still represents the more cost-effective option, then the state is fundamentally failing its citizens.
Inflated contracts
The question then becomes: Why are state projects so consistently overpriced?
Ghana’s Public Procurement Act was designed to guarantee transparency and value for money in public spending.
Yet the persistent disparity in costs suggests the Act is not working as intended. It may be poorly implemented, deliberately bypassed, or structurally flawed in practice.
The President’s candid acknowledgement is, therefore, more than a criticism of past or present administrations.
It is an admission of systemic failure.
Asserting that successive governments have allowed inflated contracts to drain state resources, often awarding deals to individuals or companies that lack both capacity and integrity.
This practice not only undermines efficiency but also erodes public trust in governance.
One critical but often overlooked factor driving inflated projects is the opaque financing of political parties.
Political campaigns and party structures require vast resources, and most funding comes from wealthy individuals or corporate entities.
Once a party gains power, it is widely perceived that financiers must be rewarded.
This frequently occurs through the awarding of inflated government contracts, enabling sponsors to recoup their investments while burdening taxpayers with unjustifiable costs.
The result is a destructive cycle: underfunded political parties depend on private financiers, who in turn expect contracts as compensation, creating a fertile ground for corruption.
Without reform, this cycle will continue to undermine public finances and weaken democratic accountability.
Solution/role of citizens
The solution may lie in establishing a transparent and accountable system for financing political parties.
A national political fund, managed with strict oversight and public reporting, could provide a sustainable alternative to private sponsorship.
Such a system would reduce the pressure on governments to “pay back” financiers through inflated projects.
Until these reforms are implemented, however, ordinary Ghanaians must remain vigilant and demand transparency at every stage of public spending.