WEDNESDAY JULY 22, 2020
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Oil revenue drop set to affect Free SHS funding BY BENSON AFFUL
Policy analyst Gideon OfosuPeasah, at the Africa Centre for Energy and Environmental Sustainability (ACEES), says he foresees a drop in funding for the government’s Free Senior High School (SHS) programme for the 2020 fiscal year, as the Finance Minister readies to present the mid-year budget review this month. Of the Free SHS programme’s 2020 funding allocation of GH¢2.43bn, 53 percent was expected to come from petroleum revenues. However, the oil sector revenue has suffered a setback since the outbreak of the global pandemic. The 2020 budget was based on an oil-price assumption of US$62.6 per barrel, and total petroleum revenue was projected at US$1.6bn. Finance Minister Ken Ofori-Atta
told Parliament earlier this year that at an average crude oil price of US$30 per barrel this year, the government will register a shortfall in crude oil receipts amounting to GH¢5.7bn. Mr. Ofosu-Peasah, who is an economist and the deputy director of ACEES, said he expects a downward review of the benchmark oil price from US$62.6 to a price between US$45 and US$50. “I expect a downward review of the benchmark petroleum revenue of US$1.5bn, to be slashed down by a range between 24 percent and 28 percent due to the dip in crude oil prices on the international market and the effect it will have on the various petroleum income streams, excluding surface rentals,” he told Business24. Hesaidalltheprojectsearmarked for funding through the Annual Budget Funding Amount (ABFA)
will witness reduced or delayed disbursement. President Akufo-Addo, during the Free SHS policy launch in September 2017, said his government will invest revenues from oil into one of the most ambitious social programmes in the country’s history. According to him, Free SHS is ensuring that the country’s oil revenues are being equitably distributed to the people—and not ending up in the pockets of a few. The first year of implementation of the policy saw the government earmark about GH¢400m to take care of over 300,000 students who were placed in Senior High Schools (SHS) across the country. With the full roll-out of the policy completed, total enrolment in SHS currently stands at 1.2m students, the highest ever in the country’s history. In 2019, out of the GH¢12.87bn
allocated to the Ministry of Education to fund its programmes and activities, GH¢1.68bn was earmarked for the Free SHS programme. Two years ago, in the second year of implementation of the policy, the government earmarked GH¢679.6m to be spent on the programme, out of a total GH¢2.1bn of oil money allocated to the ABFA.
Mid-year budget not the place to account for CAP funds—Assibey-Yeboah BY EUGENE DAVIS
The mid-year budget review expected to be delivered by the Finance Minister on Thursday to the legislature does not present an opportunity to account for the Coronavirus Alleviation Programme (CAP) funds, chairman of Parliament’s Finance Committee, Dr. Mark Assibey-Yeboah, has said. There have been calls for the Finance Minister, Ken Ofori-Atta, to provide details of the CAP allocations and expenditure in the mid-year budget presentation. However, Dr. Assibey-Yeboah said that is not the remit of the Finance Minister. “I hear people say the Minister should come and account for the coronavirus money. This is not the place for that thing. In this country, at the end of the year, all our expenditure is submitted
to the Auditor-General. He vets, audits it, and submits it back to Parliament. It is for the AuditorGeneral to vet the accounts and come and submit accounts to parliament. If the Minister comes and does any other thing, he will be straying into matters that are not required of him,” he told Business 24 in an interview. The Public Financial Management law mandates the Finance Minister to present a mid-year budget review to Parliament before the close of July of every financial year. The law, according to Dr. Assibey-Yeboah, spells out what is required of the minister, which includes to update the country on happenings at the macroeconomic level, revenue shortfalls, government expenditure, and update on government’s financing realignments. It
is
understood
that
Dr. Mark Assibey-Yeboah says the Finance Minister is not expected to account for the CAP funds during the mid-year budget review.
government is working to roll out unemployment benefits for Ghanaians soon, which is expected to be contained in the budget review. The move has been influenced by how conditions of some workers have been affected because of the coronavirus pandemic. Similarly,
another
stimulus
package for businesses is expected to be captured in the budget review. Government earlier this year introduced a GH¢1bn stimulus package for small businesses. This was aimed at assisting small firms that have been badly hid by the coronavirus. The next round of stimulus is expected to target large firms in the country.
