Background
The Bulk Oil Storage and Transportation Company Limited (BOST) has made the headlines over the past few weeks for deciding to buy iPhones for its top management members.
Social media has been awash with reports of expenses incurred by government agencies in purchasing what some critics describe as luxury phones.
The purchases of the phones by these top BOST management teams come at a time when the country is highly indebted and grappling with serious economic challenges.
This has generated numerous discussions on social and traditional media. Ghanaians have questioned why it has become necessary to use state funds to procure these phones at exorbitant prices when the country is going through economic challenges.
An Instagram post by aba_the_great1 claimed that Bulk Oil Storage and Transportation Company Limited(BOST) purchased 18 iPhone 13 for board members and general managers. Find a post here.
The post was captioned: “BOST awarded a contract to Eskew Ventures, Kaneshie for 18 iPhone 13 for board members and general managers. The total amount spent on buying 18 iPhone 13 was Ghc 28,541,261 million. Meaning one iPhone 13 costs Ghc 144,147?”
On X (Twitter), we found a similar post by MantseBiAgo. Find a post here.
Find similar posts on Facebook here and here.
Purpose of the iPhones
In a press release dated Sept. 30, 2023, BOST admitted to buying 18 pieces of iPhone 13 Pro Max for its corporate executives in May 2022.
According to the press release, the phones enable their corporate executives to stay in touch with management information and business intelligence systems. BOST explains that it was necessary to ensure that executives were efficient in decision-making. This has increased access to processed information.
Cost of the iPhones
According to BOST, the phones cost GH¢234,000 which was grossed up for taxes at GH¢285,412.16.
This implies that each iPhone 13 Pro Max cost GH¢13,000 which was grossed up for taxes at GH¢15,856.26.
A review of an official document by the Public Procurement Authority indicates that the phones were procured at a similar ‘grossed for taxes’ cost of Gh¢ 285,412.61 as quoted in the BOST presser.
Cost of iPhone 13 Pro Max On Apple Store
According to the Apple Store, the iPhone 13 Pro Max was announced and released on Sept. 14, 2021, and Sept. 24, 2021, respectively. As at the time of its release, the iPhone 13 Pro Max cost $1099 before trade-in or $45.79 a month for 24 months for customers in the USA.
Bank of Ghana’s interbank forex exchange rate for the United States Dollar on May 16, 2022, was Gh¢ 7.1167 and Gh¢ 7.1239 for buying and selling respectively. On May 30, 2022, the rate was GH¢ 7.1377 and GH¢ 7.1449 to a dollar for buying and selling respectively.
Procurement of the iPhones
According to the Public Procurement Authority, the PPA Board approved the purchase of the iPhones. BOST used the single-source procurement method. The Public Procurement Act spells out the conditions under which sole sourcing can be used.
The Public Procurement Act, of 2003, further posits that a procurement entity can conduct procurement through the following methods:
- Competitive tendering
- Single Source Procurement
- Selection of consultants
- Framework contracting
Single Source Procurement
Paragraph forty of the Public Procurement Act, 2003 states that with the approval of a Board, an organisation or a procurement entity can engage in single-source procurement in the following circumstances:
- a particular supplier or contractor has exclusive rights to goods, works or services and there is no reasonable substitute.
- under unforeseeable circumstances, there’s an urgent need for the goods, works or services and as a result, engaging in tendering procedures or other procurement methods is impractical.
- there is an urgent need for goods, works or services owing to a catastrophic event making it impractical to employ other procurement methods.
- having procured goods, equipment, technology or services from a supplier, a consultant or contractor must determine that additional supplies must be procured from the same supplier. This must be because of standardisation or compatibility with existing goods, equipment, technology or services.
- the procurement entity or organisation wants to enter into a contract with the supplier for research, experiment, study or development. There’s an exception to this when the contract involves the production of goods in quantities to establish commercial viability or recover research or development costs.
- the organisation or procurement entity uses a single source as the most appropriate method because of concerns about National Security.
So the question is, which of these conditions justifies the decision by BOST to use single-source procurement to purchase what critics describe as luxury?
BOST has justified the selection of this procurement method by citing (40[1] d) of the Procurement Act. The contract was awarded to Eskew Ventures on May 16 2022, to be delivered by May 30, 2022.
The Auditor-General
In pursuant to Article 187 (5) of the 1992 constitution, the Auditor General is responsible for submitting a report on public accounts of state public boards and corporations. The accounts of BOST are covered in Paragraphs 330-372 of the Report of the Auditor-General on the Accounts of Ghana: Public Boards, Corporations and other Statutory Institutions for the year ending Dec 2022. However, the report has no specific information on the procurement of the 18 pieces of iPhone 13 Pro Max.
