Can Government Do Good Business?

These past few days, a musician popularly known as A Plus has accused two Deputy Chief of Staff, Abu Gyinapor and Boakye Asenso, of being corrupt. This musician had accused the previous administration of thievery. This time he is accusing members of the political party he supported into power, of doing wrong. His allegations come on the back of a change in the decision to terminate a contract between Korle-Bu Teaching Hospital and UniBank.

According to a news release from the Korle-Bu Teaching Hospital, it outsources its revenue collection. The hospital has partnered with some banks in the past to collect its revenue. Now, it works with Stanbic Bank and UniBank. Here lies the problem: the hospital says in the press release that it is dissatisfied with the services of UniBank, had decided to no longer work with them, and preferred to solely work with Stanbic bank; it has been unable to terminate its contract with UniBank because of political pressure.

This is where A Plus comes in. It appears A Plus is close to the current CEO of the hospital who together with the hospital board wants the contract with UniBank to be terminated. A Plus claims that the two deputies have ensured that the contract remains. A Plus claims one of those he has accused of corruption, Abu Gyinapor, said the contract between the hospital and UniBank could not be rescinded because the bank contributed to the election campaign of the ruling government which he, Mr Abu Gyinapor, serves. For this reason, the musician calls them corrupt; they trade political donations with the protection of contracts which are not in the interest of the nation.

Kwame Asare Obeng aka A Plus

Although the musician has apologized for his utterances, there is a lot we can learn from this case. Some parts of the News Release by Korle-Bu Teaching Hospital are difficult to understand. The hospital implies that even as it first contracted the services of UniBank it did so reluctantly. It makes it known that UniBank was selected with Stanbic bank despite the fact that UniBank placed fourth out of six banks initially shortlisted to undergo a competitive selection process; Stanbic Bank was first. How competitive was UniBank’s selection? The hospital writes:

“When the Hospital submitted the names of the two banks to the Controller and Accountant General’s Department for approval, it raised issues about weaknesses in UniBank’s operation in two other hospitals in the metropolis. These issues were:

  • Reconciliations challenges
  • delays
  • non-provision of real-time access to relevant stakeholders.

In spite of the advice of the Controller and Accountant General’s Department, an MOU was signed, appointing UniBank to simultaneously collect revenue in the Hospital with Stanbic Bank…”

Why should a contract be signed between the hospital and the bank when the hospital from the onset thinks the bank cannot perform the job it has been contracted for? This does not make sense. How many private hospitals will act against their self-interest in this way? In the unfolding situation where the hospital cannot terminate a contract that it is not satisfied with because of political pressure, we need to ask ourselves who knows what is good for the hospital than the hospital. Will that be politicians in the Flagstaff House?

Another argument some make as to why UniBank’s contract should be held is that UniBank is an indigenous company whereas Stanbic Bank is not. They claim it is wrong to give a contract to a foreign company when a local one is present. This should not be an issue, especially when the local business does not do good work. It does not matter if a company comes from hell and its owners dine with the devil so far as it can do the job. The common reason for such statements is the concentration of interest. UniBank can easily complain that it is being sidelined as a Ghanaian firm, because UniBank is an organized entity  and can see its bottom line shrinking, but patrons of Korle Bu’s services are not organized, and it will be difficult for them en mass to realize the decrease in costs when they are provided more efficient services.

When the government blindly supports firms who have contributed to its election campaign, it is natural to ask whose interest the government is serving. It might be in a government’s self-interest to uncritically support its sympathizers, but will its popularity with its followers be enough to make it popular generally? It is not in a government’s enlightened self-interest to support cronies. Enlightened self –interest to mean the long-term interest of the government; this is because of the possibility that the government would be found out. When it so happens the damage to the government’s image can be irreparable. It is also in the self-interest of the bank whose service is substandard to try to resist termination of its contract. Now the question is- who fights for the consumers’ interest? It should be the government in the case of Korle Bu Teaching Hospital because it is a government-run hospital. When a government sits down for incompetence to continue we must ask ourselves: what good is the government in business? Although most people are against the idea of health services making a profit, it does not make health services any less a business even if the goal of the service is to be sustainable. With government inefficiencies, there is a danger that the standards of this vital service will fall, and it is indeed falling. Consider having ready money to pay for a hospital’s service but being unable to access it due to the inefficiencies of a bank collecting revenue. Now imagine what happens in an emergency.

Government is so terrible at business that it should not go close to any activity that has a semblance of commerce. Last month, the Vice President of the Republic of Ghana, Mahamadu Bawumia, revealed that 18 State-Owned Enterprises (SOEs) made a net loss of GH¢791 million. When SOEs lose money the government channels more money into them. It is time we rethink the relevance of government businesses. They generate waste as we saw in the case of Korle-Bu Teaching Hospital. Again, politicians do not run businesses effectively because it is not their money on the line; they do not directly feel the heat of a bad job done.

WRITER: Kwaku Gyamfi

IMAGES: Google

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