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Parliament approves US$162.9 million Barclays Bank loan

Parliament has approved a US$162, 931,563.27 Barclays Bank PLC loan to finance the design, construction, and furnishing of seven district hospitals and provide an integrated IT system by NMS Infrastructure Limited.

The money is part of the amendment agreements to the ECGD Loan Agreement between the Government of the Republic of Ghana, Barclays Bank PLC (as Coordinating MLA), and Her Britannic Majesty’s Secretary of State acting by the Export Credits Guarantee Department (ECGD).

The money is part of a total $13 billion in agreements signed in September 2010 between Ghana and the China Development Bank and China Exim Bank aimed at developing infrastructure projects, including in the oil and gas sector.

The House also approved a request for waiver of Import Duty, Import GETFund Levy, Import NHIL, Import VAT, EXIM Levy, Special Import Levy, and Domestic VAT amounting to the Cedi equivalent of $16,212,764.64 (made up of US$15,418, 702.14 on imports and US$794,062.50 on local purchases) on materials, equipment, and works/services to be procured for the project.

The two were presented to the House on Monday, January 4, 2021, by the Deputy Minister of Finance, Abena Osei-Asare, on behalf of the Minister of Finance, Ken Ofori-Atta, which were referred to the Committee on Finance for consideration and report, in pursuant to Article 103 of the 1992 Constitution and Orders 169 and 171 of the Standing Orders of the House.

Background

The policy thrust of the Ministry of Health (MoH) is to reduce inequities in access to care and increase coverage, quality and use of health services so as to achieve a healthier national population.

The introduction of the National Health Insurance Scheme, according to the government, has enhanced financial access to health services with increasing utilization of Out Patient Department (OPD) services nationwide.

The Finance Minister said despite the continuous increase in demand for OPD services in all regions and districts of the country, the development of health infrastructure had not kept pace with the demand.

“The demand and government spending on health care and other infrastructure are growing at a pace that is likely to be unsustainable unless new funding sources are found,” he indicated and added that managerial strategies for improving quality assurance also should be matched with corresponding expansion and improvement in health infrastructure.

“The instant project thus falls within the Government of Ghana‘s commitment to upgrade healthcare infrastructure in the country,” he said.

It would be recalled that Parliament at its 46th sitting held on Wednesday, August 15, 2012, approved an ECGD Loan Agreement in the amount of US$162,931,563.27 and a Commercial Loan in the amount of GH¢55 million (equivalent to US$28,752,628.81) between the Government of the Republic of Ghana and Barclays Bank PLC for the design, construction and furnishing of seven district hospitals and provision of an integrated IT system by NMS Infrastructure Limited.

A Commercial Contract between the Government of Ghana and NMS Infrastructure Limited was also approved by Parliament on 12% September 2012 for the implementation of the project.

The Ministry of Health subsequently signed the commercial contract with Messrs NMS Infrastructure Limited of the United Kingdom on November 2012 to design, construct and equip six new district hospitals at selected locations and provide the Takoradi European Hospital with housing units and to provide an integrated IT system at a contract sum of $175 million.

The Ministry of Health in consultation with its agencies proposed and chose Abetifi, Fomena, Dodowa, Garu, Kumawu, Sekondi and European Hospital in Sekondi-Takoradi Metropolis for the project.

The project was scheduled to be completed in 36 months from the commencement date, and due to delays in the implementation of the commercial contract, the availability period of the loan facility elapsed without the loan being fully utilized.

The instant amendment is aimed at extending the utilization of the facility to November 30, 2022 and ensures the successful completion of four out of the original seven intended projects.

The overall goal of the seven district hospitals project is to have a healthy and productive population that reproduces itself safely to achieve the objectives of bridging the equity gaps in geographical access to health services, and improving efficiency in management of the health system.

The rest of the objectives are to improve quality of health services delivery in the country, enhance national capacity for the attainment of the health-related MDGs and sustain the gains and intensify prevention and control of communicable and non-communicable diseases.

Observations

The Finance Committee observed that the project formed part of measures to meet the government’s commitment towards the provision of universal healthcare delivery to the people of Ghana in line with the government’s vision under the Sustainable Development Goals (SDG 3).

Status of the Project

The project includes the provision of Hospital Information Technology and Pharmaceutical Management Systems as well as medical equipment for all the hospitals involved. The total cost of the project was US$175 million and it was expected to be completed within 36 months from the commencement date of April 2013.

The seven-hospital projects at the various sites reached different stages of completion.

Works were suspended in December 2016 at which time the progress of work across all the sites stood at an average of 50.51%.

 

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