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Provide Clarity And Details On Annual Budget Funding Amount 2017 – 2019 To Ghanaians

Feb 26, 2018 | Solomon Okai

The African Development Programme (ADP) takes cognizance of the recent 2017 Annual Report on the Petroleum Funds submitted to Parliament by Minister Finance Ken Ofori-Atta.

ADP by this public interest call is seeking for interpretation of the priority areas captured on page 21 of the 64 paged report vis-à-vis the 2018 Budget Statement and Economic Policy and Appropriations Act (951).

Table: 1---Highlight of priority areas of Annual Budget Funding Amount (ABFA)

2014-2016 Priority areas

2017-2019 Priority Areas

1

Expenditure & Amortization of Loans

for Oil and Gas Infrastructure

Physical Infrastructure and Service Delivery in Health

2

Road and Other Infrastructure

Road, Rail and other critical Infrastructure

Development

3

Agriculture Modernization

Agriculture

4

Capacity Building (Including Oil and

Gas)

Physical Infrastructure and Service Delivery in

Education

Source: Ministry of Finance
The above notwithstanding, ADP is worried that the 2018 ABFA allocation may jeopardize and defeat the purpose of the 2017-2019 priority areas. Using a simple ranking tool based on ABFA allocation for the 2018 budget estimates, there are important concerns and need for further clarity in connection with government commitment to these priority areas. These concerns and need for details, in line with transparency and accountability, is evidenced from our analysis and comparison of information utilized from the 2017 Annual Report and the 2018 Budget Estimates i.e Appropriations Act (951).

Table: 2---2018 Budget Estimates focusing on ABFA allocation based on Appropriation Act

MDAs

ABFA Allocation

Percentage Share of ABFA

(%)

Priority Ranking based on ABFA allocation

1

Office of Government Machinery

455,913,085

30

1st

2

Ministry of Special Development Initiatives

423,997,875

27

2nd

3

Ministry of Finance

4,266,504

0.2

8th

4

Ministry of Food and Agriculture

247,754,500

16

3rd

5

Ministry of Fisheries and Aquaculture Development

2,000,000

0.1

9th

6

Ministry of Roads and Highways

200,000,000

13

4th

7

Ministry of Railways Development

150,000,000

10

5th

8

Ministry of Education

10,000,000

1

7th

9

Ministry of Health

50,000,000

3

6th

Total

1,543,931,964

100

Source: Programs and Research Department – ADP, 2018

Comparing Table 1 and Table 2, it is quite clear that Office of Government Machinery, Ministry of Special Development Initiatives and Ministry of Finance have no explicit mention in the 2017-2019 ABFA priority areas, and yet they have a total ABFA allocation of over 57%. There is the need to explain the linkage between the priority area of Physical Infrastructure and Service Delivery in Health and the heavy spending on the former.

Again, the Ministry of Special Development Initiatives have been allocated Gh¢ 423,997,875 representing 27% of the total ABFA expenditure allocation. On head-to-head, this allocation is more than all the other areas with the exception of Government Machinery. It is imperative for the Ministries of Finance and Special Development Initiatives to continuously engage the citizens on the estimates as approved and mechanisms being put in place to safeguard the use and reporting of funds.

In our opinion, the 2017-2019 priority areas are no longer the 4 areas but 5 given the heavy expenditure under the Ministry of Special Development Initiatives. In this vein, we urge the Finance Ministry to come out clear on the utilization of ABFA for the Ministry of Special Development Initiatives.

Importantly, the Minister of Information-Mustapha Abdul-Hamid [ii] noted that “The Minister for Special Development Initiatives therefore plays only a supervisory role over the Development Authorities and, thus, does not execute their projects and programmes directly. Accordingly, out of the over GH¢1 billion that is at issue, only GH¢1.5 million is available to the Ministry directly; the rest of the amount is only an appropriated ceiling made available in the 2018 Budget for the three Development Authorities to validate, properly budget with, plan and execute their on-ground projects, once established”.

We find this statement incomplete because, there is a budget item on page 25 of the Appropriation (No.2) Act 951 of 2017 which justifies our claim of incompleteness.

Table 3---Approved Budget for Special Development Initiative (2018)

046-Ministry of Special Development Initiatives

GoG

Total

ABFA

Grand Total

Compensation of

employees

Goods and

Services

Capex

04601 - P1. Management and Administration

350,000

71,059,970

14,537,414

85,947,384

0

85,947,384

04602 - P2. Infrastructure for Development

0

0

729,464,711

729,464,711

423,997,875

1,153,462,586

Total

350,000

71,059,970

744,002,124

815,412,094

423,997,875

1,239,409,969

Source: Excerpted from Appropriation Act 951[iii]

By this budget item we feel it will be prudent if there is further explanation on what constitutes 04601 - P1. Management and Administration and difference between “only GH¢1.5 million is available to the Ministry directly; and its supervisory role over the development authorities” as stated by the Minister.

It must also be noted that the Public Interest and Accountability Committee (PIAC)[iv] set up by the Petroleum Revenue Management Act (815) 2011 and as amended (Act 893) 2015 is mandated to among other objectives; provide space and platform for the public to debate on priority areas of utilizing the oil revenue.

Any attempt to include new priority areas without public consultation is a relegation of our democratic principles of participation and inclusion.

We want clarification and interpretation now!!!

Recommendation

  1. While this call seeks for clarification we also want to mention that it will be very important for the inclusion of PIAC on the Governing Body of the Development Authorities in the 3 development zones. Their inclusion will ensure that their objectives of monitoring the use of petroleum revenues and investments is fulfilled.
  2. Alternatively, civil society coalitions such as the Public Financial Management Network (PFM Network) with nation-wide membership can provide citizens’ representation on the governing body of these Development Authorities.

Solomon Okai
Programs and Research Officer
0269776090



2017 annual report on the petroleum funds. https://www.mofep.gov.gh/publications/petroleum-reports

[ii] http://presidency.gov.gh/index.php/2017/12/27/statement-on-the-2018-budget-of-the-ministry-of-special-development-initiatives/

[iii] https://www.mofep.gov.gh/news/2018-01-04/the-appropriation-no-2-act-2017

[iv] http://www.piacghana.org/portal/

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