Advertisement

Seth Tekper - Minister of Finance

Assemblies must be ready to borrow for projects — Terkper

Metropolitan, municipal and district assemblies (MMDAs) have been told to brace themselves up for the possibility of borrowing to support the development of infrastructure in their areas of jurisdiction.

The Minister of Finance, Mr Seth Terkper, who gave the hint, said it was important for the MMDAs to start a savings culture which he noted would allow them to borrow to support their development agenda.

In a speech read on his behalf at a composite budget hearing for the Gomoa West District Assembly, Mr Terkper said local governments all over the world were increasingly accessing long-term borrowing to finance large capital investments.

Poor saving culture

He said, however, that recent studies in Ghana continued to show that the borrowing capacity of the assemblies, as measured by their annual operational savings, was very low.

The study, he said, noted that only 20 to 25 assemblies would be in a position to borrow, adding that even with that, not all could borrow every year due basically to the poor saving culture which was a precondition for sustainable borrowing.

Mr Terkper said it was important that the MMDAs improved their public financial management and budgeting practices to create the environment which could support the possibility of prudent and sustainable borrowing for public infrastructure and services at the local level.

Dwindling resources

He noted that dwindling resources had affected promptness in the release of budgetary resources to the MMDAs and called on them to engage in revenue mobilisation drives to generate additional resources to improve local-level services and reduce dependency on the central government.

“Currently, the government is in the process of consulting relevant stakeholders to review the draft 2008 Local Government Finance Bill to fashion an appropriate framework, policies and procedures to empower assemblies to borrow for long-term investment projects which can further support local economic and social development,” he stated.

Mr Terkper said he was convinced that the assemblies would take advantage of the financial management reforms in the public sector to improve their budgeting and financial management practices to further improve local public services while generating the necessary conditions which could enable demand-driven accountable and sustainable borrowing.

Project impact

A Chief Economic Planning Officer at the Ministry of Finance, Mrs Eva Mends, asked the MMDAs to ensure that projects embarked on were not merely to honour political promises but that each project undertaken in the communities impacted positively on the lives of the people.

She said the MMDAs would no longer be assessed according to the number of projects undertaken but how those projects had impacted the people in the communities positively.

“We must not just build many schools or clinics for them because we have made these political promises. Now we would demand to know how these projects have bettered the lives of the people,” she said.

The Central Regional Minister, Mr Aquinas Tawiah Quansah, said the budget hearing was also to ensure that MMDAs were working in line with the national development agenda and ensure that funds were being used judiciously for the development of the communities.

He said it would also ensure transparency by providing ordinary citizens the platform to present their views on district budgets before they were approved by the respective assemblies.

Connect With Us : 0242202447 | 0551484843 | 0266361755 | 059 199 7513 |