Minister announces disbursement of HIPC funds
Accra, Aug. 17, GNA - Government would disburse 1,507 billion cedis as accrual of the Highly Indebted Poor Country's (HIPC) benefit for this year.
Mr Yaw Osafo-Maafo, Minister of Finance and Economic Planning, told Journalists on Tuesday that the money would be used specifically to service domestic debt, implement poverty reduction and growth enhancing programmes.
Allocation of the monies would be made through the Ministries, Departments and Agencies (MDAs), Municipal, Metropolitan and District Assemblies.
Out of the amount, 301.4 billion cedis, which forms 20 per cent, has been allocated for reduction of domestic debt.
Allocations to the Ministries include 91.3 billion cedis for self-help electrification project by the Ministry of Energy; 20.1 billion cedis for sanitation, water and disaster preparedness programmes by Ministry of the Interior and 6.17 billion cedis for salt production by the Ministry of Mines.
The Ministry of Lands and Forestry has been allocated 50 billion cedis for reforestation, Works and Housing would receive 65 billion cedis for water and guinea worm eradication projects while the Ministry of Health could access 103.8 billion cedis to fund 22 District Health Insurance Schemes, accommodation for health workers and expansion of 21 health training institutions.
Other beneficiaries are the Ministries of Manpower Development and Employment, 13.21 billion cedis; Communications and Technology, 13.2 billion cedis; Roads and Transport, 80 billion cedis and Local Government and Rural Development, 98.84 billion cedis.
The rest are the Ministries of Food and Agriculture, 7.75 billion cedis; Education, Youth and Sports, 105.36 billion cedis; Trade, Industry and President's Special Initiative (PSI), 69.93 billion cedis and Women and Children Affairs, 14.5 billion cedis.
An amount of 60.7 billion cedis has been earmarked for Micro Finance Projects.
Mr Osafo-Maafo, said each of the 10 Municipal Assemblies would receive five billion cedis while the four Metropolitan Assemblies - Accra, Kumasi, Sekondi Takoradi and Tamale - would receive, 12 billion cedis; 10 billion cedis; eight billion cedis and seven billion cedis in that order.
The Minister said their sizes and population informed the allocation of monies.
He said the remaining 124 Districts have been allocated two billion cedis each.
In addition, the Ministry had allocated a total of 215 billion cedis for special activities made up of 20 billion cedis in subsidy for Basic Education Certificate Examination fees, 72 billion cedis in subsidy for second cycle institutions and 20 billion cedis for the PSI Distance Learning Programme.
An amount of 30 billion cedis has been earmarked for the construction of lecture halls and hostels for the University of Ghana, Legon; Kwame Nkrumah University of Science and Technology, Kumasi and University of Cape Coast while 15 billion cedis has been targeted for the eradication of guinea worm and the sinking of boreholes in guinea worm endemic areas.
Mr Osafo-Maafo noted that, as has been the practice, the beneficiaries would receive 50 per cent of their allocations upon the submission of applications to the Ministry of Local Government and Rural Development, which is the supervisory body.
The remaining 50 per cent would be disbursed subject to returns or reports received from the implementation of the various projects. The Ministry of Finance would, however, create a special monitoring team in collaboration with the National Development Planning Commission to monitor the implementation of HIPC Projects.
Mr Osafo-Maafo said since the beginning of the HIPC programme, the Government had lodged a total of 2,236.54 billion cedis with the Bank of Ghana. A total of 1,871.1 billion cedis of the amount had been disbursed so far.
A break down of the disbursements are 266.79 billion cedis in 2002; 850.79 billion cedis in 2003 and 753.52 billion cedis as at the end July 2004.
The Minister said out of the total amount disbursed in 2002-2003; 225.4 billion cedis went into the reduction of domestic debt; 632.56 billion cedis to the MDAs while 259.62 billion cedis was used by the Municipal, Metropolitan and District Assemblies.
He said the Government's spending priorities from HIPC resources had yielded verifiable results, an example of which was the reduction in the stock of domestic debt and the resultant decline in domestic interest rates including the lending base rates of the banks.
"The pursuit of this policy was a contributory factor in the sharp fall in the percentage of domestic debt to GDP from 28.9 per cent in 2000 to 17 per cent by mid-2004", the Minister said, adding; "we are hopeful that this year's allocation would contribute immensely to push further down domestic interest rates".
Mr Osafo-Maafo said with the coming into force of the Public Procurement Act 2004, it was necessary that all procurements, including those from HIPC resources and releases should be compliant with the rules, procedures and processes laid down in the Law.
He urged all Metropolitan, Municipal and District Chief Executives to implement the Act by setting up District Tender Committees and District Tender Review Boards by the cut off date of August 27, 2004 when the Law comes into effect.