How to Avoid Contractor Fraud During Construction in Ghana: A 2026 Practical Guide

From inflated costs to abandoned projects — protecting your investment from fraud

Executive Introduction

The most dangerous moment in your construction project is not when the foundation cracks or the roof leaks. It is the moment money changes hands without independent verification. That is when fraud becomes possible. The Public Procurement Authority’s Contract Administration Manual explicitly identifies the implementation stage—when money starts flowing—as the most fraud-prone phase of any project .

A study of government construction projects in Ghana identified that fraudulent practices are driven by contractor competition, bribery, profit maximisation, illegal contract awards, and a lack of transparency . The consequences of this fraud include poor craftsmanship, short project lifespans, inflated project costs, and—most devastatingly—project abandonment .

This ASJ report provides a practical framework for avoiding contractor fraud during construction in Ghana. We examine the common fraud schemes, the warning signs that indicate something is wrong, the documentation and verification systems that protect your money, the legal remedies available when fraud occurs, and the practical steps to take before you sign a contract.

Part 1: Common Fraud Schemes in Construction

The Unjustified Variation Order

The Public Procurement Authority’s manual identifies “unjustified variations and change requests granted by the Employer” as one of the most common forms of fraud . This occurs when contractors request changes to the original scope of work—often to items with high rates and prices—inflating the total cost.

How it works: The contractor performs more expensive activities at the beginning of the contract, putting the contract at risk of incompletion as a significant portion of the contract amount is disbursed early . This is known as front-loading, and it is one of the earliest warning signs of potential fraud.

Product Substitution

Another common scheme involves substituting inferior, less expensive, and lower-quality products than those specified in the contract . The contractor charges for premium materials but delivers substandard ones, pocketing the difference.

In construction: This might mean using 0.40mm roofing sheets but charging for 0.50mm, using local steel instead of imported GRBS-certified rods, or substituting the specified tile brand for a cheaper equivalent.

False Invoicing and Billing

The PPA manual also identifies a scheme where the “Employer is billed for work done by senior consultants or non-existing consultants, while the actual services are delivered by a limited number of less qualified staff” . This is particularly dangerous for diaspora builders who cannot physically verify who is on site.

Land Fraud

Construction fraud often begins before any building does. A 2025 case saw a building contractor defrauded of GH¢155,000 by a mother and son who sold him land they did not own—the land had been legally assigned to another person in 2002 and registered at the Lands Commission . Another case involved a contractor who sold land and took an additional GH¢9,000 for 3,000 cement blocks he never delivered .

The lesson: Land verification at the Lands Commission is non-negotiable. The seller’s presentation of an indenture is not sufficient—you must verify with the state authority.

Advance Fee Fraud and Fake Contracts

The GETFund has issued multiple warnings about fraudulent contract award notices being circulated in its name. “The publications currently in circulation are unauthorised and do not originate from the Fund,” the GETFund warned . “Any individual, contractor, supplier, consultant, or organisation that engages with persons behind such fraudulent publications does so at their own risk.”

The U.S. Commercial Service Ghana identifies procurement fraud as a primary area of international fraud, warning companies about “advance fee schemes” that present nonexistent government tenders .

Part 2: Warning Signs of Contractor Fraud

The Public Procurement Authority’s Contract Administration Manual provides a detailed list of indicators that should trigger suspicion :

Practical Indicators

In addition to the PPA’s official list, watch for these practical warning signs:

The Low-Bid Trap: A contractor who bids significantly lower than others may be planning to make up the difference through variation orders and product substitution. The study of government projects in the Wa Metropolis found that “contractors’ competition” and “profit maximisation” are key drivers of unethical practices .

Demand for High Advance Payment: A contractor who demands 50-70% upfront either lacks capital to run the project or plans to use your money for other projects. This is a significant red flag.

Lack of Insurance or Professional Certifications: Ask for proof of the contractor’s insurance and licenses. If they cannot provide them, do not proceed.

Unwillingness to Provide References: A reputable contractor will have completed projects and satisfied clients. Visit completed homes and speak directly with past clients about schedule and aftercare.

Part 3: Prevention Systems — Protecting Your Money

1. The Bill of Quantities (BOQ)

The most critical document in fraud prevention is an itemised Bill of Quantities prepared by an independent quantity surveyor. A BOQ lists every item—from cement bags to tile square footage—with unit prices [citation:original article]. When you know exactly what money should buy, you can hold the contractor accountable for every cedi spent.

The Value for Money Office Bill, 2026: Ghana is institutionalising accountability for public spending. The Bill requires a Certificate of Clearance before any public contract above a threshold may be awarded. Every major project must pass an independent value test before a cedi is committed. Clause 34 requires a pre-award assessment of cost estimates against prevailing market benchmarks . This directly targets “optimism bias,” the tendency to underestimate costs to secure approval—a common cause of cost overruns.

For individual home builders: Apply the same discipline to your private construction. Get an independent quantity surveyor to prepare your BOQ. Use it to verify every payment.

2. Payment Structures That Protect You

Milestone-based payments are essential. Do not make large upfront payments. The Public Procurement Authority’s manual emphasises that “the person approving the payment should not be involved in the verification of payment documents” .

Sample payment structure:

• Foundation: 25% on excavation, 75% on completion

• Structural frame: Payment after verification of steel and concrete

• Roofing: Payment after roof is complete and inspected

• Finishing: Payment after each phase completion

• Final: 5-10% retention held until snagging is complete

3. Independent Oversight

The PPA manual advises: “Maintain close control on the Project Manager/Engineer with permanent contact, spot checks, site visits, issues log, inspection and control of logbook” .

For remote or busy builders: Hire a professional project manager who provides daily site presence, verifies material deliveries, manages the contractor, sends daily photos and weekly videos, and approves milestone payments [citation:original article].

4. Reporting and Documentation Systems

Enforce a comprehensive reporting system: “monthly, quarterly, by milestone to monitor closely all aspects actual versus planned progress, both quantity and quality, timeliness of deliverables, quality of inputs and outputs” .

What to document:

• Invoices and supporting documents

• Progress photographs (timestamped)

• Material delivery receipts

• Labour attendance records

• Variation orders with justification

• Inspection reports

5. Penalties for Non-Compliance

The PPA manual advises: “Penalize promptly any failure to report delays, cost over-runs, time over-runs, variation orders, use of substandard materials and workmanship, deviations from the technical specifications and any leniency towards the contractors” .

In your contract: Include penalty clauses for delays, non-compliance with specifications, and failure to meet quality standards. Enforce all applicable contract remedies, including liquidated damages for delays and remedies against insurance policies and performance securities.

Part 4: Due Diligence — Before You Hire

1. Verify Licenses and Certifications

The Public Procurement Authority and GETFund have warned that fraudulent entities often mimic government procurement websites . All official procurement processes use authorised and verifiable channels .

How to verify:

• Check the Public Procurement Authority’s website (ppa.gov.gh)

• Check the GHANEPS portal (ghaneps.gov.gh) for government tenders 

• For private construction, ask for proof of contractor registration and insurance

• The U.S. Commercial Service recommends performing due diligence on any new potential partner before entering into any business arrangement 

2. Visit Completed Projects

A reputable contractor will have completed projects you can visit. Speak directly with past clients about:

• Whether the project was completed on time

• Whether the budget was maintained

• Whether the contractor responded to issues after handover

• Whether there were unexpected cost overruns

3. Check the Public Procurement Authority’s Registry

The Public Procurement Authority maintains records of contractors. For government contracts, “the procuring entity must inform all unsuccessful bidders in writing on the outcome of the award,” and specific appeal procedures exist if bidders believe there has been a violation of the law .

Part 5: What to Do If Fraud Occurs

1. Gather Documentation

The PPA manual emphasises maintaining “poor filing and record keeping” as a warning sign of fraud . Conversely, good documentation is your best tool for recovery.

Preserve:

• Contract documents

• Payment receipts and bank transfers

• Photographs of defective work

• Communications with the contractor

• Inspection reports

2. Report to the Police

Fraud is a criminal offence. Report to the Police Commercial Crime Unit. Cases involving land fraud have been prosecuted under the Land Act, 2020 (Act 1036) and the Criminal Offences Act, 1960 (Act 29) .

The GETFund is working closely with the Ghana Police Service and other national security agencies to investigate fraudulent contract award notices and ensure perpetrators are arrested and prosecuted .

3. Report to the Public Procurement Authority

For public sector procurement fraud, report to the Public Procurement Authority. Ghana’s public procurement law provides for specific appeal procedures that can result in the cancellation of a bid, compensation for reasonable costs incurred, and damages for losses suffered .

4. Civil Remedies

You may pursue civil action to recover losses. In the GH¢155,000 land fraud case, the accused were charged with “grant of land without title” and “defrauding by false pretence” . In another case, a contractor was charged under Section 131(1) of the Criminal Offences Act and Section 277(2)(a) of the Land Act, 2020 .

Conclusion: Prevention Is Your Best Protection

Contractor fraud in Ghana’s construction industry is not rare—it is documented in academic studies, prosecutions, and regulatory warnings. The Public Procurement Authority’s manual calls the implementation stage “the most prone to fraudulent and corrupt practices” . The Wa Metropolis study identified bribery, illegal contract awards, and lack of transparency as persistent drivers of unethical practices . And the Value for Money Office Bill, 2026, was drafted precisely because “procurement fraud, inflated unit prices, and weak supervision drain resources that should reach communities” .

The tools to protect yourself are not secrets. The Contract Administration Manual provides clear guidance: maintain close control, enforce comprehensive reporting, penalise failures promptly, and ensure independent verification of payments . The GETFund and PPA provide verification channels. The police and courts provide remedies.

Your next step: Before you sign any contract with a contractor, verify their registration, check references, get an itemised Bill of Quantities, establish milestone-based payments, and insist on independent oversight. Do not let the desire to “just get started” override the need for protection.

The most expensive decision you will make is not hiring the right professional—it is trusting the wrong one without verification.

Quick Reference: Fraud Prevention Checklist

Last Updated on June 17, 2026 by Samuel Kwame Boadu

Samuel Kwame Boadu

Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.

accrastreetjournal.com/