Parliament to cap statutory funds at 25%

Parliament is today (Tuesday) expected to pass the bill that will allow the government to cap its budgetary allocation to statutory funds at twenty-five percent.

The bill, on Monday, March 27th, passed the consideration stage.

When passed, all allocations to the eight statutory funds will not exceed twenty-five percent of all government revenue for this year.

Deputy Minority Leader, James Avedzi had stressed that the move will affect the operations of local assemblies with the reduction from 7.5 to 5 percent.

But the Finance Minister Ken Ofori Atta maintains that the decision is necessary as it will afford the government some fiscal space to undertake other key economic policies outlined in the budget.

There are currently eight earmarked statutory funds; the District Assemblies Common Fund (DACF), the Ghana Education Trust Fund (GETFund), the National Health Insurance Fund (NHIF), Petroleum-Related Funds, Ghana Infrastructure Investment Fund (GIIF), Ghana National Petroleum Corporation (GNPC), the Social Security and National Insurance Trust, and the Road Fund.

Economic think tank, the Institute for Fiscal Studies (IFS) has been a strong critic of the allocation to the statutory or earmarked funds.

The IFS has argued that the development has made it difficult for government to carry out some critical expenditure over the unavailability of requisite funds.

Though the erstwhile NDC government had a varied allocation to the eight earmarked funds year on year, it allocated about thirty-three percent of the government’s revenue to the earmarked funds in 2016.


Source: CitiBusinessNews

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