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General News of Friday, 16 October 2015

Source: Daily Guide

NDC gov’t blows SSNIT cash

Dr Assibey-YeboahDr Assibey-Yeboah

The National Democratic Congress (NDC) government’s inability to pay statutory funds has been extended to public workers pension funds as the Mahama administration could not pay Social Security and National Insurance Trust (SSNIT) contributions running into almost GH¢1 billion for 2014.

According to Daily Guide sources, 2015 pension contributions are also in arrears leading to the government borrowing money from the capital market to pay the arrears.

The minority New Patriotic Party (NPP) in Parliament on Wednesday raised red flag over some ‘unscrupulous and illegal’ borrowing and expenditure by the Mahama administration, which it said were against the spirit and tenets of the Constitution.

According to the Minority, the NDC government had secretly gone to borrow an amount of GH¢914 million to pay its 2014 indebtedness to SSNIT and had also infamously paid an amount of GH¢500 million to the Bank of Ghana (BoG) as its dividend for 2014 to enable the government spend the money ‘anyhow.’

All these came out of the IMF review of the credit facility granted the country. Ghana missed most of the key indicators.

“As far as we the minority members are concerned, we have never heard the Central Bank, which is the Bank of Ghana, ever declaring a dividend in its history. This is unheard of and we think the government is pushing the bank to do that in order to give it the leverage to spend that amount,” Dr Mark Assibey-Yeboah, who spoke on behalf of the Minority at a press conference in Accra, pointed out.

Dr Assibey-Yeboah indicated that the government had already notified the International Monetary Fund (IMF) about its intention to use half of BoG’s dividend to cover the damage caused by the June 3 flood/fire disaster, even though Parliament had already approved between GH¢20 million and GH¢30 million from the Contingency Fund for that purpose, while the government intends to use the rest of the dividend to clear part of newly identified arrears with the Bulk Oil Importers.

The NPP strongly contended that those intended expenditures had not been sanctioned by Parliament, and therefore warned the government about the constitutional implications of such illegal expenditures.

“The government has gone to secretly borrow to pay its indebtedness to SSNIT and wants to also spend the so-called dividend declared by the Bank of Ghana without parliamentary approval; and should therefore know the consequences of its actions,” the Minority cautioned.

It has therefore strongly warned the Mahama government that it (Minority) would use all legal and parliamentary means in the coming weeks to ensure that the laws of the land are duly respected.

The NPP also said that the government breached the Constitution by refusing to put before Parliament the $918 million Extended Credit Facility advanced to it by the IMF, and therefore wants that facility to be immediately laid before Parliament for scrutiny and approval.

“To reiterate, government needs parliamentary approval to spend the BoG dividend. For the avoidance of doubt, the non-recourse to Parliament in securitising its debt to SSNIT is unacceptable. Parliament must probe the securitisation of government’s debt to SSNIT,” the Minority said.

The Minority expressed surprise that even though the government brought $1.5 billion Eurobond with detailed intentions to Parliament for approval, it ended up borrowing just $1 billion at an outrageous interest rate of 10.75, which will cost the nation $1.6 billion in interest payment in addition to the principal of $1 billion over the 15-year period.

“We would like the government to come back to Parliament to tell us why Parliament approved of $1.5 billion but it decided to borrow $1 billion and what that $1 billion is going to be used for,” Dr Assibey-Yeboah demanded.

The minority members told the media that the caucus would pay particular attention to next year’s budget, which would be presented to Parliament in November this year, because it strongly believes that since next year is an election year, the government would try to make some ‘dubious’ expenditure.

“We know we are coming into power in 2017 and we will not sit down for this government to break the economy using the election year budget as it did in 2000. We will indeed put them in check,” the Minority promised.

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