Business

Halt Plans To Withdraw From Heritage Fund – CSOs Demand

Halt Plans To Withdraw From Heritage Fund – CSOs Demand

Some Civil Society Organizations (CSOs); Friends of the Nation, Center for Public Interest Law, and Natural Resource Governance Institute have joined calls urging government not to use the Heritage Fund to combat the novel coronavirus in Ghana.

The Finance Minister, Ken Ofori-Atta while addressing Parliament on the economic impact of COVID-19 on the country called for the amendment of the Petroleum Revenue Management Act (PRMA) to allow the government to utilize portions of the Heritage Fund to combat the Coronavirus outbreak.

He also sought the support of Parliament to amend the relevant laws to lower the cap of the Stabilisation Fund from US$300 million to US$100 million to enable the government scoop the excess funds to bridge the gap created by the economic impact of the pandemic.

These suggestions from the Minister has since sparked up many discussions, with some individuals and groups disagreeing to the move or not.

The three CSOs, in a statement, expressed worry with these “radical proposals which, if carried through, would have serious implications on petroleum revenue management in particular and fiscal governance in general during and post the pandemic”.

Giving reasons for this assertion, they said that the usage of the Heritage Fund should not be welcomed at all because “the PRMA makes provision for excess resources to be deposited into the contingency fund. However, adherence to this requirement has often been problematic as observed by many CSOs.”

“If this were adhered to, the proposal to use the Heritage Fund which is meant to be an intergenerational investment for when Ghana's oil resources are depleted to mitigate economic impact of COVID-19 would not be necessary. It is important going forward to streamline this and ensure that this is enforced in the long-term. In the short term and within the remit of the exigency, we expect any crude price appreciation and subsequent revenues to be distributed in ways that would not constrain the contingency fund,” the statement added.

The group further suggested that “As the government seeks rapid financial facilities from the World Bank (GHS 1,716 million) and the IMF (GHS3,145 million), we expect that the processes for contracting and utilization of these funds be transparent and must prioritize the poor, vulnerable businesses in the informal sector, primary health care providers and especially target women and Persons with Disability. We further support expanding the LEAP programme to cushion the impact on extremely poor people.”

---citinewsroom