The Budgetary Allocation and Wasteful Expenditure at the Office of the President in recent times are now topical.

A total budget of over one billion new cedis (GHC 1,269,392,402), (equivalent to one trillion old cedis), was approved for the Office of the President in the 2017 budget. Out of the total amount, about 37 million new cedis (GHC 37,255,287) was approved for compensation, 152 million new cedis (GHC 151,739,332) for goods and services, and 1.3 billion new cedis (GHC 1,269,392,402) for capital expenditure.

Within the space of nine (9) months (Jan – Sept. 2017), the Office of the President spent a total of about 76 million new cedis (GHC 76,108,388.94) on goods and services. 69 million new cedis (GHC 68,458,797.94) of this amount was spent at the Office of the Chief of Staff, and 4 million new cedis (GHC 3,831,270.00) at the Vice President’s Secretariat

We would humbly like to ask, on behalf of fellow Ghanaians, what kind of purchases of goods and services will amount to about 72 million new cedis (GHC 72,290,067.94) for the Office of the Chief of Staff and VEEP Secretariat within 9 months?

Putting this in proper perspective, the immediate effect of the wasteful expenditure at the Presidency is that key growth sectors are denied resources to spur economic growth and development

2018 Budget

This situation is not going to be different in 2018. The total budget estimates for the Office of the President for 2018 is GHC 454,167,449.

Table 1: 2018 budget estimates for Office of the President

It is intriguing to note that the budget estimate for goods and services at the Presidency far exceeds the total capital expenditure of GHC 257,689,610 for the Ministry of Trade and Industry (about GHC 172 million) and the Ministry of Energy (about GHC 85 million). In fact the total capital expenditure of about GHC 146.6 million for 3 strategic MDAs: the Ministry of Water Resources and Sanitation (GHC 60 million); Ministry of Works and Housing (about GHC 80 million); and the Ministry of Communications (6.6 million); does not add up to the budget estimate for goods and services at the Presidency.

The Ministry of Railway Development is allocated GHC 150,000,000 for capital expenditure for 2018, whilst the Presidency gets GHC 272,497,855 for Goods and Services.

The total capital expenditure of 72.8 million new cedis for the Ministry of Education (GHC 12.8 million) and Ministry of Water Resources and Sanitation (GHC 60 million) does not add up to the cost of renovating the Flagstaff House and the Peduase Lodge (100 million new cedis (GHC 100,000,000). We, therefore, ask: what are the priorities of the current government? Is it the renovation of the Flagstaff House and the Peduase Lodge or the construction of educational infrastructure for the over-crowded Senior High Schools.

The points made are illustrated graphically below.

Mr. President, the good people of Ghana strongly opposed the creation of some of your Ministries but you decided to ignore the call from the very people who elevated you to occupy the Number One Office of the Land. You also ignored the fiscal impact of the creation of these Ministries. The 2017 and 2018 Budget figures give credence to this stance by the good people of Ghana.

Even with a casual look at Table 1 below, one cannot help but marvel at the unnecessary and over-bloated expenditure allocations to the Ministry of Special Initiatives as discussed below.

1. The Ministry of Special Initiative has created an expenditure item titled Internal Management of Organizations, that will cost the tax payer over 8 million new cedis (GHC 8,600,000), and another titled Local and International Affiliations that will cost the tax payer 2.5 million new cedis (GHC 2,500,000). These huge expenditure allocations to finance these specific activities when the Ministry is yet to properly roll out the implementation process of its initiatives.

2. Under item 2, 10 million new cedis (10,000,000) has been allocated for the purchase of 20 4WD vehicles. Is it prudent for a Ministry to have 20 4WD vehicles at its disposal? Furthermore, one wonders about the allocation of 0.8 million new cedis (GHC 8000,000) for the development of a website, which is more than the submitted cost of a 4WD vehicle (GHC 500,000).

3. Under item 4, 3 million new cedis (GHC 3,000,000) has been allocated for the Management and Monitoring of Policies, Programmes and Projects, and 1.5 million new cedis (GHC 1,500,000) for Policies and Programme Review Activities. Are the Policies and Programmes Review Activities not part of the Management and Monitoring of Policies, Programmes and Projects? Isn’t that a duplication?

Mr. President, what is there to show for the GHC 1,555,509 spent on capital expenditure in the 2017 budget?

Table 1: Over-bloated expenditure and duplication of expenditure items

Table 2 below, which is also part of the expenditure allocations for the Ministry of Special Initiatives suggests that the purpose for the $1 million per constitution policy initiative has outlived its usefulness. The VEEP made it clear to Ghanaians that the purpose of the initiative was to encourage a bottom-up approach to development by involving the constituents (grassroots) in the determination of their developmental needs. By the table below, the views and voices of the people are ignored in determining their priority projects

Table 2: Project expenditure for constituencies

Furthermore, for some of the items, the market prices are overstated. For instance, the current market price of an ambulance range between $18,000 and $40,000 (GHC 81,000)

• GHC 180,000, at an exchange rate of 4.5), but the unit price, as stated in the budget, is GHC 379,596.30. Are the procurement of new ambulances necessary when those ordered from the past just need some maintenance?

It is quite obvious from Table 2 that some constituencies may not benefit from some of the projects and there is no criteria to determine the distribution of the benefits. This can be very problematic.

Lastly, the list of projects in Table 2, portrays the duplication of work of traditional MDAs like the NDPC, MOH, MoF, etc. etc.

MERRY CHRISTMAS MR. PRESIDENT

By: Cassiel Ato Forson, MP

Ranking Member

Finance Committee

Parliament of Ghana

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According to him, her Ministry’s allocation of GH¢800,000 for the development of a website smacks of corruption and must not be encouraged.

It emerged on Thursday that the Ministry for Special Development and Initiatives had budgeted GH¢800,000 of tax payers’ money to build a new website.

The amount, although heavily criticized by the minority in Parliament, was approved by Parliament since the NPP has the majority in the House.

[contextly_sidebar id=”4rF7Q6nk4hIsLybxKe95DNZLgp9wozqx”]But many Ghanaians have taken to social media to criticize the ministry and the minister over the amount which has largely been described as bloated and an overestimation.

Following the backlash, the sector minister, Mavis Hawa Koomson, claimed that the GH¢800,000 was a typographical error, and that the actual amount was GH¢80,000.

But Cassiel Ato Forson believes the Minister’s statement was merely a reaction to the public outcry and that amount was indeed GH¢800,000.

“What we considered at the committee is GH¢800,000, certainly not GH¢80,000. Is the Minister telling me that she is such an incompetent lady to the extent that she couldn’t read and understand her own document?” he said.

He said Hawa Koomson must immediately resign because of her “incompetence” in handling the matter.

He said the Minister “must immediately resign over this is gross incompetence.”

“I don’t think she even deserves to occupy the office as a minister of state. She should go immediately, she doesn’t qualify to occupy that office… This is blatant corruption. It is job for the boys,” he said.

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By: Jonas Nyabor/citifmonline.com/Ghana

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The Minority Spokesperson on Finance, Cassiel Ato Forson, who made the call, had stated that government had reviewed some key economic targets without recourse to the House.

[contextly_sidebar id=”M5Z8p3dKwen9XewuIXaV46Tl3cL4GI7Z”]According to him, “The Minister responsible for Finance cannot revise the expenditures and revenue without parliamentary resolution.”

Mr. Kwarteng however dismissed these suggestions, saying the Minority’s argument is flawed since government cannot premise its budget on the previous one passed by Parliament, while ignoring the realities on the ground.

“The point that we should have rather premised the 2018 budget on the 2017 budget passed by Parliament, and we should have ignored the realities and we should have not built future plans on the basis of today’s actuals is a very strange proposition.

“You do your budget on the basis of actuals because going forward, you want to plan on the basis of reality so for anyone to suggest that because you did midyear review and Parliament did not approve of it, then you are unable to do 2018 budget statement because you would have premised it on the mid year review projections is flawed,” Mr. Kwarteng argued.

About the 2018 budget

The Minister of Finance, Ken Ofori-Atta, on Wednesday, November 15, 2017, presented the Akufo-Addo government’s 2018 Budget Statement and Economic Policy to Parliament.

The budget highlighted results from the government’s policy programmes over the past few months, and announced the government’s planned developmental programs for the next fiscal year.

Among the major programs to be rolled out by the government in 2018, are tax relief for private universities, tax holiday for young entrepreneurs, proposed 13% reduction in electricity tariff for residential consumers and 21 for industries, the establishment of a nation-building corps to offer jobs to graduates, and operationalization of the special prosecutors’ office.

The budget, dubbed the ‘Adwuma Budget’ [Job’s Budget], focuses mainly on revenue mobilization through strict tax collection modules and job creation.

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By: Marian Ansah/citifmonline.com/Ghana
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Speaking at a Breakfast meeting on Monday with stakeholders ahead of the 2018 budget and economic policy in Accra, Minority Spokesperson on Finance, Cassiel Ato Forson, said they are reliably informed that government is nursing such intentions, something they believe will threaten financial inclusion.

“The intention to tax mobile money transactions, as we are reliably informed, must be aborted immediately since it constitutes a serious threat to financial inclusion and economic growth in Ghana.”

[contextly_sidebar id=”IymPRnOZptuAHD03QWyZeTkbqdvpyeOt”]Ato Forson also argued that, such a move will adversely affect millions of Ghanaians who use mobile money for daily financial transactions.

“It is also regressive because, compared to the relatively affluent non-core financial services that the NPP removed for the relatively rich, this insensitive ‘mobile money umbrella tax’ will seriously affect millions of Ghanaians who use their telephones to transfer small amounts to relatives.”

The minority made the claim ahead of the 2017 budget statement which is expected to be delivered on Wednesday, November 15, 2017.

Ursula wants mobile money taxed

The idea of taxing mobile money transactions was suggested by the Communications Minister, Ursula Owusu Ekuful during her vetting in February 2017, where she said it may not be a bad option to generate revenue for government.

But Ursula at the time added that, government was yet to consider the decision.

Ato Forson argued that, taxing mobile money transactions “is an indirect way of taxing transactions such as transfers of school fees and medical bills.

In particular, the NPP must provide some relief to low-income families from this ‘chop money’ transfer tax, as this is nothing more than a backdoor move to reintroduce the taxes they removed last year.”

2018 budget to announce massive job creation

President Nana Addo Dankwa Akufo-Addo, had revealed that the 2018 budget statement and fiscal policy will focus largely on job creation and also announce a downward review of electricity tariff.

Mobile money transactions reach GHc109 billion in first half of 2016

The country’s mobile money transaction for half of 2016, according to the Telecoms Chamber, reached GH¢30 billion with over 80,000 people making a living as agents.

The value for the country’s annual transaction which was GH¢400,000 per annum shot up to GH¢35 billion in 2015.

In 2016, MTN Ghana alone recorded about GH¢56 billion in mobile money transaction.

Figures from the Bank of Ghana suggests that mobile money transactions hit GHc109 billion as at September 2017.

This represents a 112% growth from the 2016 figure.

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By: Godwin Akweiteh Allotey/citifmonline.com/Ghana
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Addressing the press on the development on Tuesday, the ranking member on Parliament’s Finance Committee Casiel Ato Forson urged the “Bank of Ghana to ensure that the acquiring bank in this case GCB which is the largest indigenous bank with both private and public shareholders is not overburdened unnecessarily with non-performing loans and impaired assets.”

[contextly_sidebar id=”00qH9pdyfibW08Ag7njzVWk1K78YFvhe”]He made the comment on the back of GCB’s takeover of UT and Capital banks on Monday.

GCB bank was given the opportunity to assume ownership of the two banks because according to the Bank of Ghana (BoG) the said banks had “severe impairment of their capital.”

BoG also revoked the licenses of the two banks while the Ghana Stock Exchange (GSE) also suspended the listing status of UT Bank.

However, Mr. Ato Forson at the press conference urged the BoG to ensure that depositors with the two banks do not lose their monies adding that “should this happen, it will result in an unforeseen burden on taxpayers instead of the original owners of UT and capital bank.”

“It is important for us to stress that GCB is a listed company and we are hoping that at the minimum the shareholders resolution was passed before this major transaction was taken. If that is not the case, we urge that the minority and public demand to know whether the resolution of GCB was very much so conducted or approved before this transaction was approved,” the Ato Forson added.

We followed due process

But the Chief Executive Officer (CEO) of GCB, Raymond Sowah who addressed the press on Tuesday explained that they did not require an immediate consultation with its shareholders before the move but said they used due process.

“If you were at the Bank of Ghana press conference, they indicated the sensitivity of the matter and therefore everything had to be hush-hush because they were concerned about certain things going wrong. Now we have a lot of respected shareholders. We could not say that we are going to conduct an AGM or EGM to ask this question. This is something that we can deal with post assumption,” he added.

Non-performing loans, banks headache

Figures from the BoG show that non–performing loans (NPL) in the banking sector increased by as high as 69.4% from GH¢ 3.6 billion in July 2015 to GH¢ 6.1 billion in July 2016.

The central bank claimed that most of the NPL also known as bad loans were contributed by mainly Ghanaian companies.

It also attributed the issue to a number of factors, including the general slowdown in the economy, increasing cost of production due to high utility tariffs and loan portfolio reclassification by some banks.

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By: Godwin Akweiteh Allotey/citifmonline.com/Ghana
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Mr. Ato Forson reiterated a previous position by a fellow National Democratic Congress (NDC) Member of Parliament, that the vehicles were ordered upon the express request of the current administration.

[contextly_sidebar id=”8LjMtZbVJTZn4sRxq5MYpEJ6wD7MaiZX”]“It hurts when you deal with someone at that high level and you expect that everybody will keep good faith to their promise and when you authorize somebody to do something on your behalf and you change your position, I think it is bad faith,” he said to the media on Tuesday.

Denial from gov’t

The Akufo-Addo administration has maintained it knew nothing of this deal despite claims by a former Presidential Staffer, Dr Clement Apaak.

A deputy Information Minister, Kojo Oppong Nkrumah, speaking on the authority of the Senior Minister, Yaw Osafo Maafo, insisted that there were no conversations of this kind to purchase new vehicles.

Dr. Apaak had claimed that the current government agreed with the then out-going Mahama government to buy the 43 new vehicles a few days before leaving office.

Deal authorized before transition process

Later on, a two-paragraph letter authorizing the purchase dated December 9, 2016 emerged, and it was signed by the former Chief of Staff, Julius Debrah two days before the Transition team was officially inaugurated on December 11, 2016.

The letter noted that, the deal was authorized by the outgoing Finance Minister, Seth Terkper, to take note of the decision to purchase the 43 vehicles “for necessary action accordingly.”

The letter also clearly stated that, the outgoing government had “decided to acquire some vehicles for the incoming administration.”

Earlier documents sighted by Citi News revealed that the contract for the new cars for the Presidency was awarded by the Mahama government on the 3rd of January, 2017, to Amalgamated Security Services LTD.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

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According to him, the budget does not fit into the country’s medium-term objectives and will lead the country into difficult times.

[contextly_sidebar id=”oRFnkLfnSYkkU1LRjSUPScle10VwcLfA”]”This budget is very deceptive, it is populist, it does not preserve the medium term objectives of this country. I’ll say that Ghanaians should brace for a difficult medium-term ahead of us. The minister said he was going to abolish the special petroleum tax; but he was quick to say that he was going to abolish the 1% of the component of the special petroleum tax, so he is not going to abolish the special petroleum tax per say. It is in two categories, 1% and 2%.”

Cassiel Ato Forson, who is also the Member of Parliament for Ajumako Enyan-Essiam constituency in the Central Region, said the government’s decision to scrap taxes on imported vehicle spare parts would result in dumping of old vehicles in the country.

He lamented that, it would have a negative ripple effect on various sectors of the country’s economy including health.

“Go to Abossey Okai today, we did a research on them some time ago, and in excess of 80% of what they sell are over-age vehicles. What you are doing is that, you are encouraging over-aged vehicles, the emission rate is going to go up, and the health hazards are there. Ghana is continuously going to be a dumping ground, so I think it is not well-thought through.”

He further cast doubt on the government’s announced plans of raising revenue, which he said were “overly ambitious.”

“I’ll tell Ghanaians not to be happy yet, because what I can see is a case of robbing Peter to pay Paul.”

He predicted that, the government will not meet its revenue targets for the fiscal year.

Meanwhile, the New Patriotic Party (NPP) Member of Parliament for Effiduase Asokore, Nana Ayew Afriyie, has discredited Mr. Ato Forson’s claims, saying the government will introduce measures to ensure proper regulation of the various sectors that will enjoy tax reliefs to ensure that they are not abused.

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By: Jonas Nyabor/citifmonline.com/Ghana
Follow @jnyabor

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