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22.12.2007 Business & Finance

Government Signs Agreement With Seven Banks

By GNA

Government yesterday signed an agreement with seven commercial banks for the provision of on-site and daily collection banking services to selected Ministries, Departments and Agencies (MDAs) as a means to reduce the incidence of revenue leakage due to fraudulent receipting and handling of cash.

The Minister for Finance and Economic Planning, Mr Kwadwo Baah-Wiredu, representatives of the seven commercial banks and the MDAs signed the agreement. The Ghana News Agency and 14 other MDAs, are to participate in the pilot phase of the arrangement.

Mr Baah-Wiredu said the measure was to improve the level of public financial management in the area of domestic resource mobilisation, increase the share of Non-Tax Revenue as a percentage of domestic revenue from the current 6 per cent to between 10-12 per cent

Besides, the arrangement by government will improve the collection mechanism, improve risk management and ensure a more efficient and timely transfer as well as prevent the appropriation of collections without legislative approval.

Under the term of the agreement, the bank would pay into the consolidated fund, the daily collection of monies within 48 hours. Mr Baah-Wiredu said initial assessment of the workings of the arrangement in the Driver Vehicle and Licensing Agency and the High Court in Accra, where the arrangement had been piloted since 2006 showed almost a 50 per cent jump in revenue collections.

Mr Daniel Gyimah, Managing Director of National Investment Bank, said with improved Information Technology systems and facilities for weekly reconciliation of accounts with the Bank of Ghana, the participating banks would be able to pay the monies within 48 hours.

Mr Christian Sotti, Controller and Accountant General, warned that banks that would not stick to the transfer terms would have their contracts abrogated.

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