Finance Ministry Not Meeting 5% ABFA Requirement – PIAC | Economy

The Public Interest and Accountability Committee (PIAC), simplified report titled, “Citizen Version 2022,” has revealed that the Ministry of Finance has failed to meet the requirement to transfer 5% of the Annual Budget Funding Amount (ABFA) to the District Assembly Common Fund (DACF).

The report suggests that for two consecutive years, the Ministry of Finance failed to transfer 56% of the ABFA to the DACF despite a directive by the Supreme Court in 2019.

In 2021, the Ministry of Finance was only able to transfer 1.74% of the ABFA, and in 2022, it could only transfer 2.39%. This is contrary to the decision of the Supreme Court of Ghana in the case of Kpodo and Another vs Attorney-General in 2019.

The ABFA is to maximize the rate of economic development to promote equality of economic opportunity to ensure the well-being of citizens among others.

The priority areas for 2020 to 2022 include agriculture, road, rail & other critical infrastructure development, industrialisation, physical infrastructure, and service delivery in education and health.

The industrialisation priority area received an amount of GH¢9.29 million representing 0.20 percent of the total ABFA (GH¢4.41 billion). The disbursement which represents 4.29% of the amount budgeted (GH¢216.3 million) for the priority area for 2022 does not reflect giving priority to industrilisation in the use of ABFA.

The Ministry’s inability to transfer the required amount indicates a lack of local development commitment.

The report further indicated that an amount of GH¢643.61 million (US$73.68 million) was disbursed to Ghana Infrastructure Investment Fund (GIIF) which was entirely used to support the Agenda 111 Project of the Government. This is the second year GIIF has received funds for the Agenda 111 Project.

Speaking at the report launch, PIAC Chair, Emerita Professor Elizabeth Ardayfio-Schandorf, emphasized the importance of transparency and accountability in managing petroleum revenues.

The simplified ‘Citizen Version’ of the report aims to make complex information more accessible to empower citizens and promote informed decision-making.

Former PIAC Chair, Dr. Steve Manteaw, highlighted the need to reevaluate petroleum revenue spending priorities, suggesting investments in renewable energy technology to ensure sustainable energy access beyond the petroleum industry.

He urged the government to consider redirecting part of the petroleum revenue towards such investments for the benefit of the people, saying, “this is the time for us to consider putting part of our petroleum revenue into investments and in renewable energy technology so that beyond the petroleum industry we can sustain access to energy for people”.