NDC Minority Spits Fire On DACF

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The National Democratic Congress Members of Parliament have accused the government of illegally starving Metropolitan, Municipal and District Assemblies of funds.

According to the MPs, a “directive has gone out to The MMDCEs that the direct transfer allocated to and approved for The MMDCEs should be strictly applied as followed: School Feeding Programme 40%, National Builders Corps 20%, Planting Fit Food and Jobs 20 and Balance For Assembly’s own projects 20%”.

Addressing the Parliament Press Corps in Parliament, The Deputy Ranking on Local Government and Rural Development and MP for Ho Central, Benjamin Kpodo, noted that, the alleged directive was not contained in the approved formula for the disbursement of the District Common Fund for 2018.

According Mr. Kpodo, ” that means it does meet the legal requirements for the application of The DFCF, indeed is being done on the blind side of Parliament, (refer to Hansard of March 22, 2018)”.


Full Statement of the NDC Minority Group (CAUCUS) Below:


STATEMENT OF THE MINORITY GROUP (CAUCUS) IN PARLIAMENT TO THE PRESS ON THE FORMULA FOR THE DISBURSEMENT OF THE DISTRICT ASSEMBLIES COMMON FUND FOR 2018 FINANCIAL YEAR

Ladies and Gentlemen of the Press!

We have invited you here today to bring to your attention, and, through you, to that of the nation, certain developments in the local governance sector which have the potential of ruining the decentralization concept and process which the 1992 constitution seeks to uphold and practise.

Article 252 (1), (2) & (3) of the 1992 Constitution establish the District Assemblies Common Fund and the mode of application of the Fund. Act 936 S. 126 also provides for the establishment and operationalisation of the Common Fund. The purpose of these provisions is to provide financial support for the decentralized administrative structures so created to enable them to function.

In March 2018, the Parliament of Ghana approved the formula for the disbursement of the District Assemblies Common Fund (DACF) for 2018 pursuant to Article 252 (3) of the Constitution. A total amount of GHS1,812,144,435.00 (Appropriation (No. 2) Act 2017) was appropriated for disbursement over Nineteen (19) line items. Significant among these are:

a. Transfers to other legal entities – Youth Employment Agency (10%), National Youth Authority (5%) and National Disaster Management Organisation (1.5%) – amounting to GHS299,000,665.00,

b. Allocation to People With Disabilities (3%) amounting to GHS54,364,333.00,

c. National Projects – Education, Seed Capital for newly created District Assemblies and Waste managemet – (11.59%) amounting to GHS210,000,000.00 and

d. Direct Allocations to MMDAs (50.25%) amounting to GHS905,999,982.00.

(All these received Parliamentary approval as required by law.)

 

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Our expectation therefore is that the 254 Metropolitan, Municipal and District Assemblies in Ghana will be given a total of GHS905,999,982.00 in 2018 for their planned local development projects and programmes as approved for them in the formula.

(This amounts to a theoretical average of GHS3,566,929.06 per District).

Most of these funds are applied for planned capital projects that meet the specific demands of the local communities of the respective assemblies.

However, we have information that a directive has gone out to the MMDAs that the direct transfer allocated to and approved for the MMDAs should be strictly applied as follows:

a. School Feeding programme – 40% GHS362,399,992.80

b. Nation Builders Corps – 20% GHS181,199,996.40

c. Planting for Food and Jobs – 20% GHS181,199,996.40

d. Balance for Assembly’s own projects – 20%. GHS181,199,996.40

The above directive was not contained in the approved formula for disbursement of the District Assemblies Common Fund (DACF) for 2018; that means it does not meet the legal requirements for the application of the DACF.

Indeed it is being done on the blind side of Parliament. (Refer to Hanzard of March 22, 2018.)

The second major concern is that the MMD Assemblies are deprived of funds to implement their localized development projects which they had already planned for and incorporated in their budgets.

This financially weakens the Assemblies, and, in effect, derails the decentralization and local governance process.

Indeed the directive is illegal and extremely restrictive. During the debate in Parliament prior to the approval, the three priority projects, namely SF, NaBCO and PFJ, were brought up on the floor of the House, but the Committee of the whole observed as follows:

The Committee is of the view that the amount left for the Fund to disburse to the various MMDAs is woefully inadequate.

The shortfall will seriously impair the planned activities of the MMDAs who needed these funds to complete the numerous projects being undertaken by the Assemblies.

In order not to defeat the purpose for which the DACF was established the Committee recommends that, the Ministry of Finance should strictly adhere to the provisions of the Earmarked Funds Capping and Realignment Act, 2017 (Act 947) and not further offload programmes unto the already capped funds of the Fund”.

Parliamentary Debates – Official Report – Thursday 22nd March, 2018. Col. 2963 and 2964.

In statistical terms, the directive re-allocates GHS724,799,985.60 (80% of GHS905,999,982.00) for Central Government “priority” projects leaving only GHS181,199,996.4 (20% of GHS905,999,982.00) for discretionary spending by the MMDAs. It becomes even more demeaning (catastrophic or crippling) to realize that on the average “every MMDA” will have only GHS713,385.81 to carry out its development activities (out of an estimated average of GHS3,566,929.06).

There are many Districts which depend largely or solely on the Common Fund for survival, because there are very limited local sources for generating other revenue, i.e. Internally Generated Funds. Such districts will therefore be heavily exposed financially and could be heading for stagnation and eventual collapse.

We view this illegal directive as one of the indications of the Government’s inability to fund its numerous promises to the people of Ghana. It is an act of desperation to fulfill promises, the funding of which was not well thought out.

We further note that the District Assemblies Common Fund has also been subjected to capping under the Earmarked Funds Capping and Realignment Act, 2017 (Act 947).

In 2018 the Fund has been capped to GHS1,812,144,435.00. But by a true interpretation of the Constitution the District Assemblies Common Fund should have been allocated more than GHS2,400,000,000.00. This act is, in our view, also considered unconstitutional.

We are aware of the pendency of a law suit at the Supreme Court of Ghana regarding the interpretation of not less than “5% of total revenue” to the DACF.

We urge the Courts to expedite action on such determinations so as to clarify and strengthen the operations of the Fund.

{We note again with concern that all the other traditional Earmarked Funds are under similar threat and are dying off slowly or gradually.

The GETFund is heavily capped and yet what is left is being used for recurrent expenditure.

The National Health Insurance fund is also heavily capped; and yet what is left is being applied for payment of Nurses’ trainee allowances.}

We as Minority Members of the Parliamentary Select Committee on Local Government, and the entire Minority group in Parliament, therefore demand the following:

a. The Government should immediately withdraw the said restrictive directive to the Metropolitan, Municipal and District Assemblies regarding the use of the approved direct transfers to the Assemblies.

b. The Government should explore and find other means of funding its flagship programmes and projects as directed by Parliament on March 22, 2018. It has become notorious for Government to run to the DACF to prey on its resources whenever it needs money for anything extra-budget.

c. The Government should desist from any further acts that seek to deprive the Assemblies of lawful funds due to them for implementation of their local developmental agenda, such as introducing legislation that seeks to appropriate parts of the monies due to the DACF.

d. The Government should take steps to regularly, and timeously, release monies due to the District Assemblies Common Fund as stipulated in the Constitution (on a quarterly basis) and avoid holding such funds long in arrears. Indeed, as a constitutionally established fund, the DACF should have priority over all other disbursement from “total” revenue.

Ladies and gentlemen, we believe that our decentralization, as a fundamental component our democracy, can be deepened when the decentralized units are strengthened, especially financially, to function satisfactorily.

We therefore call on you to spread the message to all stakeholders, generate the necessary discussions that can make the government listen and effect the changes we are advocating.

We thank you for your attention!

 

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