IMF conditionality not to pay statutory funds unacceptable

The ongoing negotiations between the government of Ghana (GOG) and the International Monetary Fund (IMF)is dangerously shortchanging the poor and vulnerable Ghanaian through a twin conditionality program seeking to reduce or remove all statutory funds thereby denying us the needed funds for education, health, roads and the devolution of development to the districts of this country.

The IMF mission that visited Ghana on 26th February, 2014 in its report to the IMF Board made inter alia twin recommendations for:

1. Further prioritization of capital spending combined with reduction in transfers to statutory funds to the lowest permissible levels.

2. Full integration of spending by statutory funds in the overall investment program combined with a review of possible legislative change to replace rigid transfers. It is significant to know that the government through the President and the Finance minister are kowtowing to this conditionality and are withholding statutory payments to the tune of GHC 1.42b for the 2013/2014.

Mr. Seth Terkper on 11th July, 2014 on Joy FM Super morning show indicated the government’s readiness to abide albeit blindly by this conditionality when he said we should consider a review of the laws making statutory fund payments compulsory. He took this radio discussion a notch further on 16th July when he suggested to Parliamentarians to consider amending the law requiring government to make compulsory payments into statutory fund accounts. Indeed, the finance minister categorically said the government cannot pay the money else the government will be bankrupt.

This is a dangerous development bothering on national security and we pray parliament does not entertain any such clause suggesting the removal or reduction of statutory payments in the report to be put before them by the combined IMF GOG teams. The sovereignty of Ghana cannot be sold on the platform of austerity measures.

Prof Kwesi Botchey, the leader of the Ghana team should be mindful of the fact that the statutory payments by government to education, health, roads, DACF and the social security payments of Ghanaians are a legal obligation as a welfare interface between the people and the government in the social contract between us. Any breach will have its consequences.

Whilst we agree with the IMF for the need for a cut in government expenditure, it is unthinkable that they will suggest a cut or removal in statutory payments. It is our view that the following areas will be a better suggestion in reducing government expenditure, waste and corruption.

a. Repayments of all bogus payments made to schemes such as GYEEDA, SADA and SUBAH back to the consolidated fund. Government dissipated an estimated $1b to these three schemes.

b. All bogus judgments payments through the Attorney General’s office should be repaid to the consolidated fund whilst at the same time restructuring the Attorney General’s Department to make it more professional, purposeful and modern.

c. Legislative changes to empower the Attorney General to prosecute all offenders found culpable in the Auditor General’s report to rid this country of the blatant thievery by public officers.

d. Last but not least a restructuring of the payroll to reduce payroll fraud which is so pervasive in our public and civil service sectors.

We however support any restructuring of statutory bodies and their boards especially in terms of payments and disbursement systems of monies to the various service providers who are contracted by employed by them. Forensic auditing, receipt and voucher systems are a few ways that can be used to track proper use of monies paid.

We also edge the de-politicizations of these funds as most government’s see these funds and their associated schemes as a means of rewarding party faithful rather growing the economy.

Currently, government owes Ghc 1.42b in arrears in statutory payments as follows: 1. Ghc 64.2m 2. Ghc 329m 3. Ghc 596.7m 4. Social security contributions Ghc 354.1m

It is an irony that the government owes 354.1m in social security contributions and yet thinks it has the moral right to prosecute Mr. Agudey and others who owe a few millions.

In conclusion the PNF fully supports the coalition of civil society organizations (COS) call on both the government and IMF to include civil society and ordinary Ghanaians in the negotiations to ensure such economy damaging suggestions by the IMF don’t get into the final document.

Ghana’s economy is depends on how well educated we get, how healthy we are, how safe our roads are and the basic infrastructural amenities available for our people at the districts. Any attempts to remove these funds will be fiercely resisted.

SIGNED

Richard Nyamah (Spokesperson)