To Deal with Special Development Ministry’s Advertised Planned Financial Waste, Tame the Runaway Office of Government Machinery Horse Before It Destroys the Stable
This week, we heard two worrying news items on potential waste of financial resources involving two government agencies whose creation my colleagues at IMANI questioned. These are the Senior Minister’s and the Ministry of Special Development and Initiatives.
Unsurprisingly both agencies are sitting within the Office of Government Machinery. Thankfully, Parliament refused to approve the Ghc 6m allocation to the Senior Minister’s office on the valid basis that its primary function is to ensure policy coherence in the execution of individual mandates of all ministries without the leisure of a decorated physical office stuffed with bureaucrats and expensive vehicles. However, Parliament didn’t go far enough in questioning the budgetary allocation to the Ministry of Special Development and Initiatives.
When the leadership of Parliament invited me in late November to its post-2018 budget workshop in Koforidua, I did present to the house IMANI’s understanding of the confusing budgetary allocation to the Special Development Ministry.
IMANI felt that the allocation of GHS 423 million to the Ministry of Special Development Initiatives towards capital expenditure (capex) for the Infrastructure for Poverty Eradication Program (IPEP) from the Road, Rail and Other Critical Infrastructure Development priority area of the Annual Budget Funding Amount (ABFA) was a worrying; especially considering the fact that only GHS 150 million (a reduction from the 2017 budget allocation of GHS 177.8 million) was allocated to capex for rail infrastructure and GHS 200 million to capex for road infrastructure. Earlier caution had been given in our analysis of the 2017 budget concerning the vagueness of the “Other critical infrastructure” aspect of the priority area because it gives room for the thin spread of the ABFA. There is no comprehensive policy document that details the projects the IPEP would cover (even though some of government’s flagship projects have been listed) yet the programme has been allocated GHS 423 million. We suggested that it would be useful for the government to clearly justify this allocation by presenting the details of the programme that warrants this allocation.
We now have the details.
And here we are with a Ministry whose total budgetary allocation in 2018 is Ghc 1bn, with less than half of the budgeted amount for crucial capital expenditure inspite of a Ghc 73m of that depressed amount being assigned to the unexplained “Other critical infrastructure” lot. All the functions the Special Development Ministry performs can be undertaken by existing infrastructure related ministries. If we collapsed the ministry, we would be saving nearly Ghc 300m of the Ghc 1bn allocated to the ministry.
In the fourth republic, all governments preceding the current one stubbornly converted the Office of Government Machinery (OGM) into an amorphous receptacle hosting such agencies as the Office of the President, Office of the Head of Civil service, National Security, assorted Commissions and a potpourri of ‘councils’ of all kinds, until the current NPP government conflated it with all kinds of ministries resulting in a ballooning of the OGM’s budget from Ghc 1.5bn in 2017 to Ghc 3bn in 2018.
It is not surprising that some of the biggest scandals we have seen in recent times took place in agencies locked in this Office of Government Machinery (OGM) structure, such as SADA and GYEEDA under the NDC.
To prevent further nightmarish stories of waste such as we are witnessing with the Special Development Ministry, our President must immediately tame this runaway OGM horse before it completely destroys the stable. The following actions, which we recommended earlier this year are critical:
1. Immediately take steps to rationalize the agencies placed within this poorly coordinated structure and reduce the number of entities reporting directly to the President to the bare minimum. Many of the mandates can be aligned with Ministerial mandates and placed in tighter reporting systems within the Ministries.
2. Outline plans and strategies to reverse the practice of overspending and establish key indicators that the public can hold government agencies accountable to. Reasons for any overspending should be clearly explained in audit reports which should be timely and available to the public.
3. Implement an institutional audit to remove redundancies like the Zongo and Inner-City Ministry, The Ministry for Special Inititiatevs. The Ghana AIDs Commission can fit cleanly within existing infectious disease programs at the Ministry of Health. The institutional audit should be followed by a financial restructuring with the aim of saving Ghc 300m by 2018. With competitive procurement and a dedicated financial management system across the leaner remnant of the reformed OGM, 50% of the 2018 OGM budget can be shaved off.
4. To galvanise the political will for these drastic reforms, radical transparency is required. The government should proceed to publish the contracts awarded in the various units within the Presidency and redact only the sections of national security contracts of proven sensitivity.
The beautiful thing about implementing these recommendations is that benefits shall be evident within 100 days from January 7th, 2018, (which marks the first anniversary of the incumbent NPP government) and considerable fiscal impact would be felt well ahead of the timeline for other government expenditure reforms across the government and the work of the Special Prosecutor to start showing results. What could be more urgent in the President’s in-tray than this?
Merry Christmas everyone.
Franklin Cudjoe is Founding President and CEO of IMANI Africa.
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