NRGI and others call on gov’t to prioritize the poor, vulnerable businesses in funds disbursemen
Adnan Adams Mohammed
Some Civil Society Organizations (CSOs) have on the
government to ensure transparency, prioritization of the poor and vulnerable
businesses in the informal sector, amongst others with regard to contraction
and disbursement of funds from the World Bank and the International Monetary
Fund.
The CSOs; Friends of the Nation, Center for Public Interest
Law and Natural Resource Governance Institute in a statement said, as the
government seeks rapid financial facilities from the World Bank (GHS 1,716
million) and the IMF (GHS 3,145 million), we expect that the processes for
contracting and utilization of these funds be transparent and must prioritize
the poor, vulnerable businesses in the informal sector, primary health care
providers and especially target women and Persons with Disability.
They showed support for expanding the Livelihood Empowerment
Against Poverty (LEAP) programme to cushion the impact on extremely poor people
and further called on Parliament to ensure that all legislative amendments
requested by the Ministry of Finance have a transitional and temporal period
and provision after which the original laws amended come back into force.
“We recognize that these amendments are sought to address
extraordinary situations in such an extraordinary time therefore, when all this
stabilizes and when oil price appreciates by at least 100% further, the
‘‘normal’’ times should be governed by ‘‘normal’’ laws”, the CSOs stated in
apress statement issued last week.
On 30 March, 2020, the Minister of Finance tabled before
Parliament some fiscal proposals in order to enable the government tackle the
COVID-19 pandemic.
But the CSOs said though they welcomed government on the
positive steps outlined, however, they are deeply worried about some radical
proposals which, if carried through, would have serious implications on
petroleum revenue management in particular and fiscal governance during and
post the pandemic.
The proposals include invoke section 23 of the Petroleum
Revenue Management Act, 2011 (Act 815 as amended) (“PRMA”) to lower the cap on
the Ghana Stabilisation Fund (GSF) from the current US$300 million to US$100
million ostensibly to allow for transfers of sufficient funds to the
Contingency Fund to finance government’s Coronavirus Alleviation Programme and
the amendment of the PRMA to allow for withdrawal from the estimated US$591.1
million in Ghana Heritage Fund (GHF) to undertake urgent expenditures in
relation to the Coronavirus pandemic.
With regard to the Ghana Stabilisation Fund, the CSOs said
the proposal though legal is questionable.
“Like in many instances over the years, the proposed US$100
million cap is very low and has the potential to trigger government’s appetite
for borrowing against the Sinking Fund to the disadvantage of the
constitutionally mandated Contingency Fund established for purposes of helping
government mitigate the impact of unanticipated fiscal imbalances.
It is precisely because the Contingency Fund has
consistently been starved of the needed earmarked funds that we are hard hit by
this crisis in the first place. If successive governments had adhered
religiously to the requirements of law, we should not be having difficulty
mitigating the economic impact of the present crisis (assuming the 30th March
crude price of US$22.9 a barrel) without having to cap the GSF at US$100
million below the current threshold of US$300 million”, it emphasised.
In the case of the Ghana Heritage Fund, they pointed out
that the proposal should not be welcomed at all.
This because the Petroleum Revenue Management Act (PRM)
makes provision for excess resources to be deposited into the contingency fund.
However, adherence to this requirement has often been problematic as observed
by many CSOs.
“If this were adhered to, the proposal to use the Heritage
Fund which is meant to be an intergenerational investment for when Ghana’s oil
resources are depleted to mitigate economic impact of COVID-19 would not be
necessary”. It said.
The 5% threshold of fiscal deficit as a percentage of GDP as
per the Fiscal Responsibility Act (Act 928) are also proposed to be amended.
However, the CSOs said the Finance Minister’s statement does
not indicate by what margin, adding, this discretion is not anything welcoming
and needs to be plugged.
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