The Minority in Parliament has described as “inflated and misplaced” the procurement of drones to deliver blood and essential medicines to rural areas.
The Ghana Health Service (GHS) introduced the deal to help deliver blood and essential medicines across the country, especially to rural communities and was approved by parliament on Tuesday, 11 December 2018, after three failed attempts.
Hon. Cassiel Ato Forson
According to the Minority’s spokesperson on Finance, Cassiel Ato Forson, who is also a former deputy minister of Finance under the erstwhile Mahama adminstration, the contract
between the Government of Ghana and Zipline for the operation of drone delivery services was “inflated.”
Ghana Medical Association
His stament comes at a time the Ghana Medical Association (GMA) has called for the government to suspend the procurement of the drones.
The GMA believes the proposed services to be provided by the drones do not conform to the existing primary health care policy in Ghana.
“The use of drones without the necessary improvement in the human resource capacity will not inure to the health benefit of the country and its quest to improve health care delivery,” the GMA said on Tuesday.
President of GMA, Dr. Frank Ankobea, said the drones should be seen as an augmentation in existing efforts, adding that “Government should suspend the planned implementation of this system immediately”.
“Broader stakeholder consultations on the use of this autonomous remotely piloted aircraft system (drones) in the healthcare delivery in the country should be conducted to decide the way forward,” the statement added and suggested that steps be taken to “improve the referral systems especially in the emergency situations which to all intents and purposes is more beneficial”.
The GMA said it was not consulted on the issue and pointed out that “health should not be politicised and that the health of Ghanaians is critical”.
Despite Parliament’s approval of the deal, former Deputy Finance Minister under the erstwhile Mahama administration who is the Ranking member of Parliament’s Finance Committee, Cassiel Ato Forson believes Ghanaians have been defrauded.
In a statement, Mr Forson has accused the vice president, Dr Mahamudu Bawumia as hiding behind public servants such as the Director-General of the Ghana Health Service (GHS), Dr Anthony Nsiah-Asare to milk the tax payer.
Below is the Minority’s statement
Subsequent to the Minority in Parliament’s discovery of evidence of inflation in the contract
between the Government of Ghana and Zipline for the operation of drone delivery services in the country, I have noted a number of mispleading claims by persons who appear ill-informed about the subject.
It is widely known that this inflated contract is the baby and handiwork of the Vice President, Dr. Mahamadu Bawumia. Yet he has failed to own up and explain the many inflated cost items inherent in the contract.
Instead, he appears to be seeking refuge behind Civil and Public servants who have demonstrated little knowledge about the project through their public statements. The pronouncements of these officials have created more confusion than A case in point is the public submission by the Director-General of the Ghana Health Service, Dr Nsiah Asare. Dr Asare has been unable to answer critical questions relating to this transaction leaving many issues outstanding. I wish to draw attention to the fact that:
1. Up to date, Dr. Nsiah Asare has not been able to tell Ghanaians what the cost of a drone
per distribution center is. Neither has he disputed the $1m cost per distribution Centre
figure I put out.
2. Import duty is 20% on CIF, hence the basis of my cost computation
$100,0000/0.2 =$500,0000/4 = $125,0000
3. Dr. Nsiah Asare refused to comment on the discount of $11,000 when he made his
$88,000 argument. Even if the $88000 cost is true for 100% operating capacity, why is it
that it is not pro-rated so that if Zipline operates at only 5% capacity which is the most
likely then Ghana pays only 5% x $88000 =$4,400 instead of the $10,000 in the agreement.
The $10,000 for only 5% operating capacity implies that Ghana is being charged the
equivalent of $200000 ($10000/0.05) per month per distribution center. Despite
amending page three of the agreement to make the service charge $ 88,000 per month
per distribution centre, it should have been pro-rated.
4. Dr. Nsiah Asare also stated in his emotional argument that the money is not coming from the state, but rather from GNPC and some Petroleum and Mining companies. Let me
make it very clear to all that GNPC is wholly owned by the state hence the $1m promised
per year is public funds. Also, Mining and Petroleum companies pay tax at 35% hence
every $100,000 donated by such companies in the form of CSR implies that the state is
contributing $35000 (tax shield) since CSR is tax deductible.
5. I sincerely believe that if Ghana buys the drones and the ancillary equipment’s from
Zipline and Zipline agrees to train staff of the GHS to operate it for a period of just two
months, the state will not spend more than $6m on all the four distribution centers over
the four year period.
6. The 20% penalty for delayed payment in the agreement implies that Zipline’s cost of
capital is 20% which is quite outrageous and unimaginable because the last Eurobond that
Ghana issued was at only 7.62% (10yr bond). This means that Ghana’s cost of capital on a
dollar project should never exceed 7.62% which strengthens the argument for outright
7. Dr. Nsiah Asare says the Suhum sight is ready hence GNPC should just give us the first
$1m so that Ghana can buy the equipment from Zipline to kick-start the project.
8. Per the 72 rule in finance, Zipline will double their investment in 3.6yrs (72/20) if Dr. Nsiah Asare’s $12m cost for the project is true then this confirms my assertion that Ghana need not spend more than $6m for the entire project if Ghana buys the equipment’s from
It quite clear from the above,that this Zipline deal is an extremely bad one for the country and it unfortunate that the Vice President would champion it with the zeal that he has deployed.
I believe that posterity will soon vindicate this position.
Cassiel Ato Forson