Set Up Dist. Assembly Banks to Aid Decentralisation

THE MINISTER of Local Government and Rural Development, Mr. Kwadwo Baah-Wiredu, has advocated the setting up of a District Assemblies Bank, as a way of speeding up the decentralization process.

He said a district assemblies bank would be a "Dedicated Bank" whose operations would largely be beneficial to the districts as this would facilitate their transactions and eliminate delays.

Hon. Baah-Wiredu, who made the suggestion in an exclusive interview with the Chronicle at Konongo recently, said, as a startup capital, each of the 110 district assemblies could contribute ?20 million for the establishment of such a bank.

He contended that a district assemblies bank with competent directors and personnel would facilitate the release of funds for micro-projects, instead of channeling them through commercial banks where funds take a longer time to process.

The headquarters of the district assemblies banks after receiving the funds from central government, would then release them to its branches nationwide for onward disbursement.

Even the district assemblies can fall on the bank for loans whilst waiting for the common fund. Asked about the current practice of channelling funds into rural banks, he replied that these are privately-owned and that speeding up development at a faster rate than now means having this dedicated bank releasing funds on time.

He indicated that the district assemblies bank could, as a financial institution, work with funds deposited when they are not immediately needed, thus making profit which could be ploughed back for the benefit of its owners (assemblies).

The Local Government Minister, who is also the Member of Parliament (MP) for Asante Akim North, said the problem of the delays in salaries of teachers and nurses, those engaged in agriculture and other category of workers could even be reversed, in that the proposed bank could pay upfront.

When asked about the criteria for determining Metropolitan/Municipal and District status, he explained that Act 462 section 1, sub-section 4, of the Local Government Act requires a population of 250,000, 90,000 and 75,000 in that order.

The other aspect is that "the place must have a geographical contiguity and be economically viable with enough resources such as tourism potential, market, lorry park, etc."

Chronicle investigations have revealed that when the administrator of the Common Fund releases the funds, these are deposited at the National Investment Bank, which can only release them as and when a contractor completes a project.

The rural banks that handle the Poverty Alleviation Fund (PAF) charge 20 per cent per year, with 12? per cent as bank charges whilst the district assembly takes 7? per cent, an indication that a district assembly bank could be a viable one.