Parliament unable to pass Common Fund bill

Parliament was unable to pass a bill for the sharing and transfer of the District Assemblies' Common Fund (DACF) because there was no administrator to manage it, Mr Kwadwo Baah-Wiredu, Minister of Local Government and Rural Development said on Tuesday. The passage of the bill was necessary to ensure the quick transfer of monies for investment and infrastructure projects at the local level.

Speaking at a "Stakeholder Consultation Meeting On Fiscal Decentralisation Design Report" in Accra, the Minister said the absence of a proper mechanism such as the bill, had delayed the release of funds for development projects for the first two quarters of this year. "However, if the proper mechanism is established soon, Parliament would be able to pass the bill for the quick release of the funds for the three quarters of the year by October".

The meeting would discuss the draft design report, which represented the end of the second phase, of the policy on Ghana's Fiscal Decentralisation Programme. The fiscal decentralisation programme is in three phases namely: the diagnostic, the design and the implementation phases.

Mr Baah-Wiredu said Ghana's programme of decentralisation had a number of major components including political, administrative, participatory development planning, market decentralisation, public-private sector partnership and fiscal decentralisation. He said fiscal decentralisation in particular was one critical component intended to facilitate the implementation of the entire decentralisation policy.

The goals of the fiscal decentralisation programme were to promote growth of sub-national governments, achieve efficiency, effectiveness, economy, transparency and accountability in the management of resources.

Mr Baah-Wiredu noted that there had been some initiatives in fiscal decentralisation such as the merger of the two treasuries at the district level, the establishment of the district tender board, the institution of the ceded revenue and the DACF among other things. "These earlier initiatives, however, have been piecemeal and the need has been expressed for a more comprehensive approach to the subject", he stated.

He said the Ministry recognising the loophole in the disbursement of the DACF for example, had proposed the establishment of a specialised bank for quick transfer and ease in supervision. Currently, it takes two months for funds released by the Bank of Ghana to get to the districts while commercial banks are not willing to advance monies to the districts. Mr Baah-Wiredu noted that the establishment of district banks could serve the interests of the population at the local level.

Asked whether it was not possible to use the rural banks through their apex bank, the Minister said ownership of the banks also had vested interest and as a group of people they would act differently, which could be detrimental to their development. He expressed the hope that the necessary mechanisms would be established soon to correct the uneven development trend in the country.

Mr Joseph Yamoah, Chief Director of the Ministry of Finance, said government with the technical assistance from the Canadian International Development Agency (CIDA) set up the fiscal decentralisation project to design a Decentralised Financial Management System for the country.

He said the draft design sought to change the regulatory framework for financial management from a centralised one to enhance decentralised ownership of development. He urged the participants to offer workable criticism to enable the project team to come out with a workable implementation arrangements and options and a final document to stand the test of time. Participants included district chief executives and officials from the various ministries.