The quest to promote Made in Ghana Goods received a major boost yesterday with the formal launch of a “Margin of Preference" that would compel public agencies to patronise locally made goods and services.
Margin of Preference, which comes under clause 60 of the Public Procurement Act 2003, set out the guidelines such as the range and limits of various margins that could be applied to give preference to Ghanaian goods and services.
Mr Kwadwo Baah-Wiredu, Minister for Finance and Economic Planning, who launched the guidelines, said Government had decided to bring these guidelines into effect immediately and back them up with law before the end of the year.
"Government has charged the Public Procurement Board and the Internal Audit Board to supervise and monitor the introduction and full compliance by public agencies," he noted.
The Minister said the private sector was also expected to adopt the guidelines in their procurement practices to help themselves and the country to nurture and sustain a competitive valued added capacity for wealth creation and economic prosperity.
He said the launch was in fulfilment of Government's promise that public agencies should be made to pursue a "Buy Ghana First" policy to demonstrate concrete support for local value-added industries and to facilitate the creation of more jobs.
Explaining the technicalities of the guidelines, Mr Adjenim Boateng Adjei, Chief Executive Officer of the Public Procurement Board, said in situations where local labour/raw materials and components from within Ghana accounted for 15 per cent or more of the ex-works price of a product offered, a 20 per cent margin of preference shall be applied.
He said where imported raw materials constituted the bulk of inputs and local labour and additional components were required for processing into finished products and the proportion of domestic value added was equal to 10 per cent or more of the ex-works price of the product offered, a margin of preference of 15 per cent would be applied.
Defining who an eligible domestic contractor was; Mr Adjei said he must have a registered company incorporated under the laws of Ghana with majority shareholdings by Ghanaians.
A domestic contractor could not sub-contract more than 50 per cent of the total value of works to foreign contractors. The margin of preference to be applied in this instance would be 10 per cent.
Mr Adjei said where sub-contracting firms sub-contracted 30 per cent or more of the value of works to a domestic contractor, a 7.5 per cent margin of preference should be applied.
He said to promote the development of Ghanaian technical and professional capability, some incentives would be allowed under the technical score when evaluating proposals for services.
Mr Adjei said effective utilisation of the margins of the domestic preference would promote local industries' development, generate employment and assist the local business community to become competitive and efficient suppliers to the public sector.