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.
