De-securitization of statutory funds to create GHS 19.4bn fiscal space for Gov’t – Mahama

Former President John Mahama, has said the de-securitization of proceeds from statutory funds like ESLA, GETFund and the District Assemblies Common Fund (DACF) coupled with the renegotiation of payments to Independent Power Producers (IPPs) will create a fiscal space of over GHS 19bn by 2025.

According to the former President, these measures when implemented by government, will first create a fiscal space of GHS 16bn in 2023, GHS 17.6bn in 2024 and then GHS 19.4bn in 2025.

Making the assertion while delivering an address on the economy titled Building the Ghana We Want at the University of Professional Studies, Accra on Thursday, October 27, 2022, Mr Mahama noted the aforementioned measures would significantly ease the cash-crunch which has crippled the affected sectors.

“We estimate that if the proceeds due ESLA, GETFund, Road Fund  etc., are freed of the burden of collateralization and IPP payments  are renegotiated, government would have access to a total of about  GH¢ 16 billion in 2023, GH¢ 17.6 billion in 2024 and GH¢ 19.4 billion  in 2025 from these funds alone. 

“This would significantly ease the cash-crunch, which has crippled  many sectors resulting in government’s inability to meet such basic  obligations as supplying food to secondary schools and providing  textbooks for basic schools,” he stated.

EXPENDITURE ITEMS FOR CONSIDERATION

ITEM	2023 INDICATIVE (GH¢)	2024 INDICATIVE (GH¢)	2025 INDICATIVE (GH¢)
GETFUND	2,602,792,390	3,009,461,440	3,743,993,613
ROAD FUND	1,949,296,790	2,210,728,337	2,427,680,636
MIIF	1,817,296,790	2,005,210,007	2,329,783,372
ESLA PLC	5,028,665,684	5,715,321,520	6,480,628,825
ENERGY SECTOR IPPs	4,605,709,092	4,533,751,656	4,437,982,034
TOTAL SAVINGS	16,003,903,956	17,614,472,960	19,420,068,034

Speaking at the event, Mr Mahama urged government to stop the collateralizing statutory funds for the purpose of taking in more loans asserting that the wanton collateralization of statutory funds has been unhelpful.

On the way forward, the former President noted that a legislation prohibiting the collateralization of statutory funds should be passed by Parliament to ensure that such decisions are not made by future governments.

The de-securitization of statutory funds coupled with the renegotiation of payments to IPPs formed parts of measures to be implemented by the government to reduce the country’s huge public debt which is currently estimated at GHS 522bn.