Includes how major projects are financed and gives examples where relevant. Explains activities of the multilateral development banks in and other aid-funded projects where procurement is open to U.S. bidders.
Government of Ghana
U.S. companies are strongly encouraged to contact the U.S. Commercial Service Ghana for assistance prior to bidding on government projects for the following reasons:
- The U.S. Commercial Service can provide information on the market, which can be helpful when preparing a successful proposal. It can also assist in obtaining more information about a proposed project;
- The U.S. Commercial Service can help verify the legitimacy of an unsolicited request for participation in a government tender. There have been some fraudulent procurement offers that utilize real government tenders, falsely claiming to represent the government body in question. There have also been some fraudulent companies that put forward nonexistent government tenders; and
- There have been some allegations of irregularities in government tendering processes. The U.S. Commercial Service Ghana can push for an even playing field for all bidders.
Government ministries, departments, agencies and local governments have their own tender committees, which buy directly from suppliers. Ghanaian law stipulates that purchases below a certain threshold are reserved for local companies. Because these thresholds can change, U.S. companies are advised to contact the U.S. Commercial Service Ghana for information on the latest threshold amounts. There is no requirement for a local agent to be able to sell to the Ghanaian government. However, local agents can be useful in providing leads and contacts. U.S. suppliers can also take advantage of the margin of preference given to domestic suppliers of goods and services.
Note: Although a local partner can be of great assistance when entering the market, the U.S. Commercial Service Ghana highly recommends that any new potential partner be subjected to due diligence prior to entering into any type of business arrangement with a U.S. company.
U.S. companies bidding on Government tenders may also qualify for U.S. Government advocacy. A unit of the U.S. Commerce Department’s International Trade Administration, the Advocacy Center coordinates U.S. Government interagency advocacy efforts on behalf of U.S. exporters bidding on public sector contracts with international governments and government agencies. The Advocacy Center works closely with our network of the U.S. Commercial Service worldwide and inter-agency partners to ensure that exporters of U.S. products and services have the best possible chance of winning government contracts. Advocacy assistance can take many forms but often involves the U.S. Embassy or other U.S. Government agencies expressing support for the U.S. bidders directly to the foreign government. Consult Advocacy for Foreign Government Contracts for additional information.
Financing of Projects:
Large projects are usually financed by external sources such as multilateral development banks, international development finance institutions, private equity funds, international commercial banks and export credit agencies. However, perhaps due to the recent reforms in Ghana’s banking sector, several local banks have demonstrated their capability to participate in the financing of large-scale projects. Due to the non-availability of government guarantees, the use of alternative enhanced credit facilities such as partial risk guarantees are common.
Multilateral Development Banks and Financing Government Sales
Price, payment terms, and financing can be a significant factor in winning a government contract. Many governments finance public works projects through borrowing from the Multilateral Development Banks (MDB). A helpful guide for working with the MDBs is the Guide to Doing Business with the Multilateral Development Banks. The U.S. Commercial Service has a Foreign Commercial Service Officer assigned to the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the World Bank.
Successful companies usually have a “ground game” in the country where the project will be implemented. This often includes relationships with implementing Ministries and local MDB officials, local partners or local presence. Companies need to be able to evaluate opportunities as they know their capabilities, bandwidth and risk tolerance. Companies are most successful in projects in markets where they already have relevant experience, and willing to put in the time: project development can take 1 - 3 years.
Ghana remains one of the 74 nations under the umbrella of the International Development Association (IDA)
Learn more by contacting the:
· Commercial Liaison Office to the African Development Bank
· Commercial Liaison Office to the World Bank