Let assemblies source own funds for efficiency
The Minister of Finance, Mr Seth Terkper, in a speech read on his behalf last Wednesday, prompted metropolitan, municipal and district assemblies (MMDAs) to endeavour to do their own borrowing for development projects in their jurisdictions.
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Coming at a time when government borrowing has hit the $90 billion threshold, it may be one of the ways that the government can cut down on its large borrowing.
Although we do not subscribe to borrowing before development projects can be embarked on in the various MMDAs, experience has shown that internally generated funds (IGFs) have never been enough for very extensive developments to take place.
But no matter how small the IGFs are, we believe the assemblies can do themselves a lot of good if they cultivate a savings habit to win the confidence of lenders.
With the release of the District Assemblies Common Fund (DACF) always in arrears for many months, the Daily Graphic believes it is time for the MMDAs to source their own funding and stop depending on the central government for either very little, delayed or non-existent funds to advance the course of their assemblies.
We believe that if the MMDAs look for their own funding for their projects and programmes, it will cut down on wastage, since they will be forced to use those funds judiciously.
As things stand presently, some assemblies incur needless cost on projects because they know that it is the central government that will bear the cost.
Sourcing their own funds will also make the assemblies think through very carefully, the benefits of each programme to the people in their jurisdictions and save the government from always having to service their debts.
The conditions that sometimes accompany loans will also ensure that the incidence of uncompleted projects resulting from the mismanagement of funds becomes a thing of the past.
Already, the government is no longer guaranteeing loans for water projects by the Ghana Water Ghana Company Limited (GWCL) and the company is now bearing its own cost. This has freed the government from the responsibility of ensuring that the GWCL is operational.
Speaking at the launch of the GWCL’s 50th anniversary on Thursday, the Managing Director of the GWCL, Mr Frederick C. Lokko, said: “Funding for capital expansion works which hitherto was absorbed by the government is now to be borne by the assemblies under the new debt management policy and this means that we must operate in a more efficient manner.”
This buttresses the fact that when state entities are given charge of raising their own funds, they become more efficient. The government must, therefore, make it a policy and wean itself from the sourcing funds for the operation of all state-owned agencies. This way, officials will be more circumspect in the use of resources.