Date: April 1, 2009, 2:56 pm


The Integrated Social development Centre (ISODEC) has lauded the Government for the establishment of the Northern Ghana Development fund with a seed amount of GH25million but said judging by the geographical imbalance of national development, similar funds are needed for other deprived areas in the country. Addressing a press conference on the 2008 Budget statement in Accra yesterday, the Acting Coordinator of the Centre For Budget Advocacy (CBA) of ISODEC, Mr Nicholas Adamtey, said there was the need to have proper discussions through stakeholder consultations on how to address the geographical imbalance in the nations development, including its financing, strategy and time frame for achieving semblance of parity in the levels of development across the ten regions of Ghana.

 He added that setting up a fund along the lines of the Northern Ghana Development was also one of the steps needed to address the problem. He also called on the Government to subject the Northern Ghana Development Plan and Strategy, which is being currently developed, to stakeholder critique and revision, where necessary, when it is completed. Beyond the needs for infrastructural transformation, other challenges that must find expression in the strategy document are livelihood opportunities and securities, affordable access to credit, market access and transformation of the Agricultural Sector, which is the preoccupation of the people of Northern Ghana, he said.

We urge that the needs of the vulnerable, especially women and children and persons with disabilities are incorporated in the strategies, he added. On the Economy, Mr Adamtey said Statistics had revealed that the mining sector experience 30% growth from a rate of 13.3% in 2006, adding that the explanation of the growth on the full scale operationalisation of the Newmont mine in Ahafo alone raise serious concerns about the countries mining code and investment agreement with the mining companies. He said the mining code and investment agreement appeared to have the companies the major beneficiaries of rising world gold prices which had hit a record of $800 per ounce mark from $600 per ounce at the beginning of the year.

 We note that the mining sector is one with the highest foreign investment, and growth in this sector is likely to lead to net transfer of resources from Ghana to the rest of the World. Besides the sector has little forward and backward linkage with the rest of the economy and therefore its impact on the economy interms of welfare will not be significant, he said. For the mining sector to benefit Ghanaians and for that matter the poor we urge the Government as matter of urgency to take another look at the country’s mining code and investment agreement, and to investigate why in spite of the rising world gold prices, mining companies persist in the payment of minimum 3% royalties set on a sliding scale of 3 to 6%; depending on profitability, he added.

He called on the Statistical Service to disaggregate the Gross Domestic Product (GDP) to inform the nation how each region was contributing to the growth of the economy. On the Budget deficit, Mr Adamtey said the rate at which was incurring Budget deficit was high and likely to lead the country into fiscal indiscipline and mounting public debt. In 2006, the deficit was as high as 7.8% of GDP. In fact in 2006, the Government targeted domestic financing of the Budget to be a net borrowing of 0.2% of GDP but this was worsen to 4.1% of GDP. The domestic primary has been in surplus between 1994 to 2005 and has worsened in 2006, sliding into a deficit of 4.9% of GDP. The implications of the high deficit are high inflation and mounting public debt, he stressed.

 With regard to public debt Mr Adamtey said despite the huge flow of resources as a result of debt relief it was strange that public debt had reduced marginally since 2000, that is from $7.5billion in 2000 to $7.2billion by December 2007. He said ISODEC found the situation alarming and Government needed to do something about it, adding Our fear is borne out of the fact if we do not manage our debt stock very well, we will soon have to spending a huge chunk of the public resources on debt, leaving very little for poverty related expenditures. Turning the spotlight on revenue mobilisation, he said the Value Added Tax (VAT) was regressive in that the poor pay more than the rich, and urges the Government to shift emphasis from the current regressive tax regime to a progressive regime where the rich paid more and all goods imported into the country taxed.

 As regards the District Assembly Common Fund (DACF), he said the percentage of total revenue disbursed to the districts in 2006 was below what was stipulated by the constitution, adding that only 4.09% was actually disbursed that year. He said given the recent increase in the number of district Assemblies from 138 to 166, the relative allocation of DACF would affect the district Assemblies. Those who are yet to commence operations need massive injection of funds to enable them to stand on their feet. We will entreat the Government to go by the stipulated 7.5% of total revenue to enable some meaningful development to take place at the local level he added.

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