The Minority in Parliament has kicked against the government's decision to review the Petroleum Revenue Management Act (PRMA) to allow for the use of the Heritage Fund to finance its free senior high school (SHS) policy.
The Minority indicated that it would resist any attempt to amend the PRMA for the purpose of funding the free SHS, which President Nana Addo Dankwa Akufo-Addo said his government would fully implement from the 2017/2018 academic year in September this year.
However, Mr Kwaku Kwarteng, the NPP Member of Parliament (MP) for Obuasi West and member of the Finance Committee, says the government has not taken any definite decision to use the Heritage Fund to finance the free SHS policy.
Responding to the concerns of the Minority in Accra, Mr Kwarteng said the government’s means of funding its flagship programme would be communicated to Ghanaians in its 2017 budget scheduled to be presented to Parliament in March.
The Senior Minister, Mr Yaw Osafo-Maafo, who dropped the hint about the Heritage Fund on the sidelines of the Graphic Business-Stanbic Bank Breakfast Meeting in Accra last Tuesday, said the Heritage Fund, which receives nine per cent of the country’s annual petroleum revenue, would be used to sustain the free SHS programme.
Speaking at a press conference in Accra yesterday, the Ranking Member on the Finance Committee of Parliament and former Deputy Minister of Finance, Mr Cassiel Ato Forson, said the Minority joined majority of Ghanaians and civil society "to register our disapproval of and objection to this idea and wish to state emphatically that we shall resist any attempt to amend the PRMA for this purpose".
He said the plan to use the proceeds accruing from the Heritage Fund was not just an incompetent way of redeeming a campaign promise "but a lazy man's approach that completely undermines the national consensus and painstaking efforts made to create a balance between saving versus expenditure and between recurrent expenditure and capital expenditure”.
Mr Forson said it appeared the NPP government had run out of ideas within its first month in office as to how to fund its flagship campaign promise of providing free SHS education.
"We in the National Democratic Congress (NDC) would like to offer them free advice to rather reallocate the distribution of national resources from sectors they regarded as non-priority to their campaign promise.
"We urge the NPP government to stay off the Heritage Fund, for it is particularly reserved as savings for the future generation, since petroleum resources are not renewable. The future generation deserves a shot at progress and that is what the Heritage Fund seeks to achieve. We cannot sit idle while the NPP attempts to mortgage our future for its partisan objectives," he said.
Mr Forson, who is the MP for Ajumako/Enyan/Essiam, said the Heritage Fund and the amount accrued so far since its inception six years ago stood at $266 million.
Therefore, he said, the proceeds of the fund "would be woefully inadequate to meet the close to $1 billion required annually to underwrite the free SHS programme".
He said the proposal to allocate the Heritage Fund to education came with much cost because it formed part of the core reserve of the nation which took into account the long-term needs of the nation, such as macroeconomic stability.
Secondly, he said, the notion that the fund was set aside from the country's fiscal management was erroneous, since a critical examination of the fiscal table in the budget showed that there was an accounting set-off between revenue generation and deficit financing.
"Therefore, the setting aside of the Heritage Fund is likely to have a negative impact on the country's reserves and the value of the currency and will lead to a likely destabilisation of the macroeconomic and fiscal situation of the country," he said.
Product of national consensus
Mr Forson said the PRMA was a product of national consensus and went through a series of processes, including Executive and Legislative approval, and was regarded as one of the best legislation for national resource revenue management in the world.
"In recognition of the fact that the nation will need resources for development, a higher premium was placed on current development, which explains why only nine per cent of petroleum revenue was allocated to the Annual Budget Funding Amount (ABFA) and the Stabilisation Fund," he said.
The MP said another balance which the government's proposal wanted to destroy was the 70 per cent of total petroleum receipt allocated to development and indicated that education was in the four priority sectors which the ABFA was applied.
The Deputy Minority Leader, Mr James Avedzi, said the NDC supported the implementation of the free SHS programme because the past government had started implementing it in a progressive manner.
However, he said, the NDC wanted the government to use its men and brains to raise money to fund the programme, instead of relying on savings from the Heritage Fund, which was inadequate.
Mr Avedzi, a former Chairman of the Finance Committee of Parliament, said the fund was supposed to be reviewed after 15 years of its implementation and indicated that the country was in the sixth year of its implementation.
The MP for Ellembele and former Minister of Energy, Mr Emmanuel Armah-Kofi Buah, said the PRMA was passed after exhaustive consultations and, therefore, it did not lie in the bosom of the NPP to amend it.
"This is not the time to touch that money. They should look for other options. They should not come to Parliament to seek an amendment," he said.