IMF Warns Against Corrupt Contracts: Global Financial Risks Highlighted
IMF warning - corrupt contracts - The International Monetary Fund (IMF) has identified Ghana’s public procurement system as highly prone to corruption, citing widespread bribery, kickbacks and illicit dealings that continue to drain public resources.
The country’s procurement processes have become a fertile ground for rent-seeking and political interference, undermining value for money in government spending.
The IMF’s 20-year review of the country’s procurement contracts, indicates that companies seeking major government contracts often make large ‘side payments’ running into millions of dollars to influence key decision-makers.
The report notes that this entrenched practice has given rise to other forms of corruption, such as the sale of contracts to third parties and fraudulent judgement debt settlements.
The IMF warns that corruption in contract awards has become institutionalised, creating a shadow economy around public spending.
“These practices have distorted the procurement system and created avenues for public officials and private firms to engage in illicit gains,” the report stated.
Judgement debts
A 20-year review of Ghana’s fiscal record found that the country paid about 358 million dollars (equivalent to GH¢1.9 billion in 2019 value) in judgement debts between 2000 and 2019.
The report indicated that a significant share of these payments likely resulted from collusion between public officials and private contractors.
In several cases, contracts were awarded without due process, later leading to legal disputes that ended in costly settlements against the state.
“These payments often arise from weak contract management and deliberate manipulation of legal processes for private gain,” the report stated.
Political influence
The report further highlights how Ghana’s political system allows rent-seeking by ruling parties and their affiliates.
It explains that the use of state institutions and resources for political advantage has fuelled corruption and weakened governance structures.
Citing past corruption scandals involving the Ghana Youth Employment and Entrepreneurial Development Agency (GYEEDA), Ghana Education Trust Fund (GETFund), National Service Scheme (NSS), and COCOBOD, the IMF observed a recurring pattern of public fund misappropriation that erodes public trust.
Natural resource
Widespread frustration persists among government officials, international partners, and civil society due to the apparent impunity surrounding corruption cases, particularly those involving politically connected individuals.
The report also flagged Ghana’s natural resource management, especially in the oil, mining and cocoa sectors, as highly vulnerable to corruption.
It cited weak enforcement of agreements with oil companies, irregularities in mining licences, and poor monitoring of cocoa revenues as persistent threats to transparency and accountability.
“The lack of strong oversight and enforcement mechanisms has created significant leakages in resource management,” the report stated.
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