Purchase Order (Ghana)

A Purchase Order in Ghana directs the recipient to act, or refrain from acting, as it specifies.

Section 6 of the Sale of Goods Act 1962 (Act 137) defines a contract of sale as a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price. A purchase order constitutes an executory agreement to buy and sell goods — an agreement to sell — which becomes a completed sale when the goods are delivered and accepted in accordance with the order. The Sale of Goods Act 1962 (Act 137), which is based on the UK Sale of Goods Act 1893, applies to all commercial sales of goods in Ghana where the parties have not contracted out of its provisions by express agreement.

The Contract Act 1960 (Act 25) governs the general law of contract in Ghana, including the formation, validity, and enforcement of purchase orders. A purchase order issued by a company incorporated under the Companies Act 2019 (Act 992) must be signed by an authorised officer acting within their actual or apparent authority under section 137 of Act 992. An officer who exceeds their actual authority but acts within apparent authority can still bind the company to third parties who deal with the company in good faith.

The Value Added Tax Act 2013 (Act 870) requires VAT-registered suppliers in Ghana to issue tax invoices in respect of taxable supplies. A purchase order does not itself constitute a tax invoice, but triggers the obligation on the supplier to issue a VAT invoice on delivery. The standard VAT rate in Ghana is 15%, with an additional 2.5% National Health Insurance Levy (NHIL) under the National Health Insurance Act 2012 (Act 852) and a 2.5% Ghana Education Trust Fund (GETFund) levy under the GETFund Act 2000 (Act 581), making the effective rate on standard-rated supplies 20%.

The Ghana Revenue Authority (GRA) administers VAT, income tax, and customs duties on imported goods. Where a purchase order is for imported goods, the buyer must comply with the Customs Act 2015 (Act 891), pay applicable import duties and VAT at the port of entry, and obtain an import declaration from the Ghana Revenue Authority's Customs Division. The Destination Inspection Scheme administered by Ghana Customs requires pre-shipment inspection of specified imported goods including food products, pharmaceuticals, electrical equipment, and construction materials.

The Ghana Standards Authority (GSA), established under the Standards Authority Act 1973, sets and enforces standards for goods sold in Ghana. Goods ordered by a purchase order must comply with applicable GSA standards, particularly for food products, pharmaceuticals, electrical equipment, construction materials, and consumer goods. The Food and Drugs Authority (FDA), established under the Food and Drugs Act 1992 (Act 438), regulates the importation and sale of food, drugs, cosmetics, and medical devices in Ghana, and all such goods ordered by a purchase order must carry valid FDA registration.

The Weights and Measures Act 1975 (Act 304) requires all commercial transactions in Ghana to use metric units of measurement. Purchase orders must specify quantities in metric units — kilograms, litres, metres, or cubic metres — to comply with Act 304. The Ghana Metrology Service of the Ghana Standards Authority inspects commercial measuring instruments used in the weighing and measuring of goods supplied under purchase orders in Ghana's markets and industrial establishments.

The Consumer Protection Agency Act 2022 (Act 1065) established the Consumer Protection Agency (CPA) of Ghana to protect consumers against unfair trade practices, defective goods, and misleading representations by suppliers. The CPA has jurisdiction over complaints from buyers about goods that do not conform to their description or that are unsafe. Suppliers who receive purchase orders from Ghanaian buyers must comply with Act 1065 by confirming that goods delivered match the description in the purchase order, are fit for the disclosed purpose, and are not dangerous to health or safety. The CPA may investigate complaints, order refunds or replacements, and impose civil fines on non-compliant suppliers. This statutory protection supplements the implied terms under the Sale of Goods Act 1962 (Act 137).

A Purchase Order in Ghana is needed whenever a business, government entity, NGO, or individual buyer wishes to formally instruct a supplier to deliver goods and to create a written record of the agreed terms before delivery takes place.

A purchase order is needed by private companies in Ghana when procuring raw materials, components, packaging materials, office supplies, machinery, vehicles, or equipment from local or international suppliers. The purchase order records the agreed price, quantity, specification, and delivery date, preventing disputes about what was ordered and on what terms under the Sale of Goods Act 1962 (Act 137). Companies that procure goods on credit rely on purchase orders to track outstanding obligations to suppliers.

A purchase order is needed by Ministries, Departments, and Agencies (MDAs) and Metropolitan, Municipal, and District Assemblies (MMDAs) for low-value procurement of goods under the Public Procurement Act 2003 (Act 663). Below the competitive tendering threshold set by the PPA, public entities use a request for quotation followed by a purchase order to formalise the supply transaction and create an audit trail required by the Auditor-General's Department under the Audit Service Act 2000 (Act 584).

A purchase order is needed by NGOs, international development organisations, and United Nations agencies operating in Ghana — including the United Nations Development Programme (UNDP), UNICEF, WHO Ghana, and bilateral development partners — to procure goods locally while maintaining procurement audit trails required by their donors and funding agreements. Most donor compliance frameworks require purchase orders as authorisation documents for expenditure above specified amounts.

A purchase order is needed by construction contractors in Ghana when ordering building materials from hardware suppliers, quarries, and roofing material manufacturers. The purchase order specifies the grade, quantity, delivery address (project site), and price of materials in accordance with applicable Ghana Standards Authority (GSA) standards, creating a binding contract that the contractor can enforce if the supplier fails to deliver on time under the Sale of Goods Act 1962 (Act 137) s.37.

A purchase order is needed by retailers and distributors in Ghana when restocking inventory from manufacturers or wholesalers. A purchase order provides the legal basis for the buyer to inspect and reject non-conforming goods at the point of delivery and to claim a refund or replacement under the implied terms of merchantable quality and fitness for purpose in the Sale of Goods Act 1962 (Act 137) ss.13–15.

A purchase order is needed by healthcare institutions — public hospitals under the Ghana Health Service, private hospitals licensed by the Health Facilities Regulatory Agency (HeFRA), clinics, and pharmacies — when ordering medical supplies, medicines, and equipment from distributors licensed by the Food and Drugs Authority (FDA) under the Food and Drugs Act 1992 (Act 438). The purchase order records the product name, batch number requirements, delivery conditions, and cold-chain specifications for temperature-sensitive pharmaceutical products.

A purchase order is also needed by agricultural businesses, food processors, and beverage manufacturers in Ghana when procuring raw agricultural commodities — such as cocoa, maize, rice, palm oil, cassava, and groundnuts — from farmers, aggregators, or the Ghana Grains Council. The purchase order records the agreed commodity standard, weight, moisture content, and price per tonne or per bag in accordance with the relevant GSA commodity standard.

A complete and legally effective Purchase Order in Ghana under the Sale of Goods Act 1962 (Act 137) must contain the following key elements.

Purchase Order Number and Date: A unique sequential reference number issued by the buyer's procurement or finance department, and the date of issue. The purchase order number links the order to the delivery note, tax invoice, and payment records for audit trail purposes required by the Financial Administration Regulations 2004 (L.I. 1802) for public entities and by the Income Tax Act 2015 (Act 896) for private businesses.

Buyer Details: Full name, physical address, Ghana Post GPS digital address, VAT registration number (if VAT-registered), Taxpayer Identification Number (TIN) issued by the Ghana Revenue Authority (GRA), and the name and signature of the authorised buyer or procurement officer. For companies incorporated under the Companies Act 2019 (Act 992), the company registration number issued by the Office of the Registrar of Companies (ORC) should be stated.

Supplier Details: Full name, physical address, GPS digital address, VAT registration number, company registration number from the ORC if the supplier is a limited company, and bank account details for payment via the Ghana Interbank Payment and Settlement Systems (GhIPSS) national payment platform.

Goods Description: A precise description of the goods — including item name, product code, specification, grade, colour, size, weight, and any applicable Ghana Standards Authority (GSA) standard — sufficient to identify the goods without ambiguity. The description corresponds to Section 13 of the Sale of Goods Act 1962 (Act 137), which implies a condition that goods supplied by description must correspond to the description.

Quantity and Unit of Measurement: The quantity ordered and the unit of measurement (pieces, kilograms, litres, metres, cartons) in accordance with the Weights and Measures Act 1975 (Act 304), which requires the use of metric units in commercial transactions in Ghana. Any packaging specifications — for example, 50 kg bags, one-litre bottles, or 12-piece cartons — should also be stated.

Unit Price and Total Price: The agreed unit price in Ghanaian Cedis (GHS) and the total order value, stated exclusive and inclusive of VAT at the effective rate of 20% (15% VAT + 2.5% NHIL + 2.5% GETFund levy) under the Value Added Tax Act 2013 (Act 870), the National Health Insurance Act 2012 (Act 852), and the GETFund Act 2000 (Act 581).

Delivery Address and Date: The precise delivery address (physical address and GPS address if available), the required delivery date or delivery window, and any special delivery instructions regarding packing, labelling, documentation, or temperature control for perishable and pharmaceutical goods subject to FDA cold chain requirements.

Payment Terms: The payment terms — cash on delivery, 30 days net, 60 days net, or prepayment — and the bank details for payment by electronic funds transfer through GhIPSS, mobile money via MTN Mobile Money, Vodafone Cash, or AirtelTigo Money under the Payment Systems and Services Act 2019 (Act 987).

Acceptance and Inspection: The buyer's right to inspect goods on delivery and to reject non-conforming goods within a reasonable time under the Sale of Goods Act 1962 (Act 137) s.34, and the procedure for returning rejected goods and obtaining a replacement or refund.

Governing Law and Dispute Resolution: Ghana law, with disputes subject to the High Court (Commercial Division) in Accra or arbitration under the Alternative Dispute Resolution Act 2010 (Act 798). For small claims below GHS 10,000, the District Court has jurisdiction under the Courts Act 1993 (Act 459).

Forms-legal.com provides this Purchase Order as a starting point for businesses operating in Ghana. Companies dealing in regulated goods — pharmaceuticals, food products, construction materials, electrical equipment — should verify applicable GSA and FDA standards before issuing purchase orders. The Ghana Revenue Authority (GRA) requires VAT invoices to be issued in response to purchase orders for all taxable supplies made by VAT-registered suppliers.

Record Keeping and Audit Trail: Both buyer and supplier must retain copies of all purchase orders, delivery notes, tax invoices, and payment records for a minimum of six years under the Revenue Administration Act 2016 (Act 915). For public entities, the Auditor-General's Department under the Audit Service Act 2000 (Act 584) requires complete procurement files including the purchase order, delivery note, inspection certificate, and payment voucher to be maintained for at least ten years as part of the public financial management audit trail. Companies incorporated under the Companies Act 2019 (Act 992) must maintain accounting records including purchase orders under section 127 of Act 992 and the Financial Reporting Act 2004 (Act 647) for audit by the external auditors appointed at the annual general meeting.

Export and Cross-Border Considerations: Where a purchase order is placed with a foreign supplier for goods to be imported into Ghana, the buyer must comply with the Customs Act 2015 (Act 891) administered by Ghana Customs. The purchase order must specify the incoterms — for example, CIF Tema Port or FOB supplier port — to allocate risk and insurance obligations between buyer and seller. Import duties, VAT at the port of entry, the Import Levy, and the ECOWAS Community Levy apply to imported goods under the Customs Act 2015 (Act 891) and the Ghana Revenue Authority tariff schedule. Agricultural imports require phytosanitary certificates and clearance from the Plant Protection and Regulatory Services Directorate of the Ministry of Food and Agriculture (MoFA). Pharmaceutical imports require Food and Drugs Authority (FDA) import permits. The buyer should state on the purchase order whether a pre-shipment inspection certificate from an accredited inspection body is required under the Destination Inspection Scheme administered by Ghana Customs, to avoid delays at the Port of Tema or Takoradi.

Sustainability and Local Content: Government policy under the Ghana Beyond Aid framework and the Buy Ghana First initiative of the Ministry of Trade and Industry encourages businesses and government entities to source goods from Ghanaian manufacturers and suppliers. Purchase orders placed with Ghanaian producers support local industry, reduce import costs, and contribute to economic development. The Public Procurement Act 2003 (Act 663) provides a 7.5% price preference to domestic goods manufacturers in public procurement, creating a structural incentive for public bodies to favour Ghanaian suppliers. Private businesses may voluntarily adopt local procurement policies aligned with national development objectives and report on local content in their corporate social responsibility disclosures under the Companies Act 2019 (Act 992) and the Ghana Stock Exchange (GSE) Listing Rules for listed companies.