Touch Heritage Fund ‘only’ as a bridge financing facility or temporary credit – Mould advises gov’t
Adnan Adams Mohammed
A renowned financial and energy expert has added to calls on
government to stay off its intention to seek permission to use the Ghana
Heritage Fund as an emergency response fund to the fight against the global
pandemic coronavirus (COVID-19).
Reechoing that, touching the Heritage Fund should be the
absolute last option, and every government should resist the temptation of
doing so irrespective of the cost of raising money elsewhere. But, the expert
proposed that, the Heritage Fund should only be used as a bridge financing
facility or a temporary line of credit to government.
Nonetheless, terms constituting such dire emergency
situations to leverage the Heritage Fund need to be defined and agreed to, with
a strong burden on government to prove beyond any doubt that they have
exhausted all avenues to reducing costs and raising funds; only then should
there be a National referendum to decide if these funds can be touched.
“Presently with the situation of the COVID-19 pandemic, if
all options to raise money are exhausted and government is in a total bind to
save human lives in the midst of this crisis, then in my view, the Heritage
Fund should only be used as a bridge financing facility or a temporary line of
credit to government”, Alex Mould, former Boss of Ghana National Petroleum
Corporation (GNPC) advised the government.
This means that government must commit to, and replenish
these funds within a clearly predefined repayment timeline with a dedicated
source of funding– our future generations are counting on us for this.
Mr Mould expressed that, “In my opinion, the Finance
Minister’s mention of the drawdown of the Heritage Fund, was not genuinely
intended to generate approvals/buy-in to touch the fund on an immediate basis.
I believe he mentioned it to prompt a debate amongst our law makers, and to
test Ghanaians’ response to a possible drawdown of the fund, if serious
considerations need to be made as a result of financial hardship in the
country.
“When an institution (i.e. government) experiences a revenue
shortage, the most prudent thing for the person in charge of finance to do, is
to rally all the various heads of departments (in government's case the Ministers),
to review budgets and institute draconian cuts in expenditure. This must
include recurring and discretionary expenditure. The government should focus
more on operations and maintenance expenditure, and postpone all new
infrastructure and non-core expenditure i.e. the nice-to-haves.
“Since the government has not fully completed such
cost-management activities there should be no mention, as yet, of utilizing the
Heritage Fund. Any discussion, at this stage, of utilizing the Heritage fund
denotes a fragile economy that is unable to withstand the stress tests of
shocks to it.”
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