Gov’t must pay interest on delayed payments to MMDAs

A Local Governance Expert, George Kyei Baffour, has questioned government’s disregard for laws that clearly states that funds should be allocated to Metropolitan, Municipal and District assemblies.

His concerns come at a time when some MMDAs have their common funds in arrears of over seven months.

The situation has proven challenging to the smooth running of several assemblies across the country, some of whom are indebted to service providers.

Discussing issues surrounding decentralization and the financial empowerment of local governance structures in the country on Ultimate Radio, Mr. Kyei Baffour emphasized that the financial woes of MMDAs should be blamed on how successive governments have flouted laws that govern the allocation of funds to MMDAs.

He stated that although the law clearly enjoins government to release 7.5% of total government revenue to assemblies; the finance ministry has constantly disregarded this provision, creating problems for local governance in the country.

Buttressing his point, he stated, “The district assembly common fund is not a central government transfer, but a constitutional obligation on central government in the beginning of the year as part of the budget which is approved by Parliament to set aside a minimum of 7.5% for distribution to assemblies.”

“This constitution has suffered a number of breaches by subsequent governments. It is so endemic that at the end of the year 2000, when we were transiting from one government to another, district assemblies were owed seven quarters of one year and three months of arrears. As we speak now, monies for three quarters have not been released,” he bemoaned.

Mr. Kyei Baffour is further proposing a clause that slaps a punitive interest charge on government whenever it defaults in releasing its statutory funds to MMDAs, considering the massive responsibilities that decentralization has handed to assemblies.

“Government should have signed an agreement with the MMDAs to pay interest on these monies because government is going into the open market and paying 25.5% interest on bonds and so if government has utilized assembly’s common fund, which is a statutory fund that is supposed to be transferred, governments should be made to pay interest on those monies,” he opined.

George Kyei Baffour also dismissed suggestions that MMDAs have to now depend on their internally generated funds to fund their activities.?He contended that several Assemblies did not even have the needed taxable economic activities in their jurisdictions to generate any substantial revenue.