October 24, 2021

The Minority in parliament is unhappy about government’s indebtedness to the District Assemblies Common Fund; and called for urgent steps to determine the monies due the DACF within a maximum of one month after the end of each quarter and accordingly release same to the DACF.

At a press briefing on Thursday, October 21, 2021, the minority on the Committee on Local Government and Rural Development said “the Ministry of Finance is very heavily indebted to the DACF to the tune of about billion Ghana Cedis (GHS2,000,000.00+)”

They bemoaned the mal-functional status of the District Assembly Common Fund (DACF) and the suspected misapplication of the constitutionally created fund by the government. “the monies due to the Fund have not been given to the Fund to enable it to carry out its mandate as abundantly outlined by the Constitution and the relevant Act.”

According to the Minority, the reasons for the mal-functional status of the DACF include;

  • Underfunding of the DACF.

Government they said has persistently done everything possible to deprive the DACF of the needed funds for the discharge of its constitutionally mandated duties, stating that amounts due to the Fund were under-provided and owed to the Fund for 2017 and 2018. These debts were only partly settled in 2020 with an amount of GHS144million with monies borrowed during the COVID-19 intervention period.

They said even before this, the government had earlier introduced the “Earmarked Funds Capping and Realignment Act” under which the DACF was listed as those funds that should be capped so as to retain funds for the Central Government spending.

More so, the Ministry of Finance has refused to comply with the 2019 ruling of the apex court in the case of “Benjamin Kpodo and Richard Quashigah VS Attorney General” which ruled that as a constitutional creation, the DACF could not be capped, and that the receipts from petroleum sources should be included in the total revenues when computing funds due to the DACF. Instead, the Finance Ministry deducts certain amounts from the total revenue ceded to GNPC and GRA before computing the 5% of the balance.

According to the Minority, the practice is unconstitutional and a ploy to reduce the amounts due to the DACF. They therefore asked the Ministry of Finance to “provide the constitutional 5% of total revenue to the DACF before making budgetary allocations to MMDAs.

  • Timing of the Determination of Amount Due to the DACF.
    They said even though the amounts due to the DACF are based on the total revenue generated within the relevant period, the Ministry has over the years refused to make known to the public and the DACF how much is generated for each period. This makes it difficult for anybody to determine the base figure upon which the 5% is computed.
  • Non-payment of Monies to DACF in quarterly Installments
    Article 252(2) mandatorily requires that monies for the DACF shall be paid by quarterly installments. However, the Finance Ministry has arbitrarily determined that the amount due to the DACF for one quarter of the year is not due until after the end of the next quarter. The finance Ministry has failed to release funds to the DACF for several quarters over 2020 – 2021, a clear violation of the 1992 Constitution, Article 252(2).
    The Finance Ministry is heavily indebted to the DACF to the tune of over 2billion Ghana Cedis (GHS2,000,000.00+) as follows:

2019 – GHS700m (per the Auditor–General’s report)
2020 – GHS587M
2021             –     GHS 884M (Estimated for only 1st and 2nd quarters).

Additionally, “a release letter issued by the Ministry of Finance indicated an amount of GHS434,587,416.00 for the fourth quarter of 2020; this amount was lower by GHS210,301,339 than the amount computed by the same Ministry of Finance by which the allocation should have been GHS644,888,755.00.”

The Chief Director of the Finance Ministry in reconciliations explained that the Ministry did not release the full amount because that would have exceeded the legally appropriated allocation to the DACF. “We realize that that position is not acceptable because if even the correct amount were fully released that would amount to GHS1,822,795,315.00, still lower than the appropriated amount of GHS2,312,706,550.00 for the 2020 year.”

The Minority described as undermining development at the local level when for the whole of 2021, not even a pesewa has been paid to the DACF. “We have been informed that a release letter was issued for the first quarter for an amount of GHS434, 291,958.21, but no money has been paid to the DACF as of today”, the Minority lamented.

Dominic Shirimori/Ghanamps.com