Collateralisation is good if it is not used for subsidies – AFRO executive

The Deputy Chairman of the Alliance For Responsible Opposition (AFRO), Jake Addo, has backed the government's decision to collateralise Ghana's oil as long as the government does not channel the funds into subsidising the social programmes in place.

At a press conference by AFRO on Wednesday, Mr Addo stated that the revenue to accrue from the oil operations should be invested in the country's infrastructure rather than social programmes such as the National Health Insurance Scheme, which he feels should be funded from other income-generating sources.

“[Concerning] oil revenue, if it's used for infrastructure; whether it's houses, [or] whether it's roads, [or] whether it's bridges, it is in order. What may not be very good is when we use the oil money on social amenities like free education, free health, free school uniforms [and] free feeding,” Jake Addo stated.

In a statement read on behalf of AFRO, the National Coordinator, Lord Koranteng Hamah, said the group was pleased with the 2011 budget, adding that, "the 2011 budget represents a bold initiative of the Mills regime to reduce poverty and create conditions for mass livelihood and prosperity."

He also said the 2011 budget will serve its purpose of stimulating growth and creating employment. He also expressed the backing of the group of the collateralisation of the nation's oil.

"AFRO is in favour of the collateralisation of oil revenue as a means of addressing Ghana's infrastructural challenges. It provides the most pragmatic and effective solution to the country's lagging housing and transportation infrastructure," he said.

Lord Hamah said AFRO was however not pleased with some provisions in the budget, particularly issues concerning the provision of schools and health facilities, insisting that such social amenities should be more rural oriented at the expense of developed communities.

He added that the group was displeased about some tax exemptions, highlighting the mining sector in particular.

Lord Hamah also criticized the 2008 presidential candidate of the Convention People's Party, CPP, Dr Paa Kwesi Ndoum. Dr. Nduom has been critiquing the budget and performance of the ruling NDC government.

Lord Hamah, said, “Dr Ndoum is an ideological misfit, both in record and personality. For eight years he defended the most spiritually bankrupt regime in Ghana's history; supported the most scandalous tax regimes on popular consumption; defended anti-inflationary policies and the kind of micro economic stability that he now condemns.

“His condemnation of the $13 billion loan and the STX Korea reflects a lack of recognition of the relation between oil revenue and long term public investments particularly, infrastructural development in the developing world.”

Story by Fidel Amoah/Myjoyonline.com/Ghana