Let’s Chop $120m Oil Cash – NDC

The Ghana Heritage Fund (GHF) from the crude oil production off the Jubilee Fields, set up for future generation of Ghanaian citizens, is under threat as the General Secretary of the ruling National Democratic Congress (NDC) Johnson Asiedu Nketia, has suggested that the John Dramani Mahama administration should begin to dip its hands into it.

According to Mr. Asiedu Nketia, “it doesn’t make sense” that Ghana is keeping an estimated at $120 million in an offshore account when the country is smarting under economic hardships arising out of lack of funds in the national kitty.

The NDC chief scribe’s suggestion stems from the fact that all other sources of funding projects has almost been exhausted after government’s unrestrained dissipation of the nation’s funds.

The NDC government is currently unable to pay statutory funds such as GETFund, District Assemblies Common Fund, Health Insurance Levy, Stool Lands Fund among others, all running into several millions of cedis.

The IMF team which visited the country early this year and met President John Mahama and his economic team, including the Finance Minister, Seth Terkper as well as civil society organizations and other stakeholders, warned of a possible shutdown of the Ghanaian economy if the country did not come for a bailout.

Strangely, since Ghana joined the league of oil producers, there is nothing to show for the over $1.5 billion windfall accrued from the country’s share of the Jubilee Fields.

“In this current situation that we find ourselves, it doesn’t make economic sense to be keeping any money called Heritage Funds,” Asiedu Nketia told Accra-based Citi FM, questioning the rationale behind borrowing from international financing institutions and countries “at a rate of about five percent, eight percent and so on, when our own money is being kept by somebody. It doesn’t make sense.”

When Ghana started producing crude oil in commercial quantities, industry stakeholders, government representatives and representatives of civil society groups agreed that two key funds be set aside
from the country’s oil proceeds. They include the Ghana Stability Fund (GSF) to cushion the oil industry from adverse external impacts and the GHF, which was set aside for future generations of Ghanaians by whose time the country may have run out of its non-renewable fossil fuel.

The GHF was set aside, not to be touched for several decades – no matter what hardship the country confronted – but the highly influential General Secretary of the ruling party thinks it is time to rescind the
thinking that went into setting up the fund.

According to him, with the current situation, the country would have deteriorated badly for the future generations to be able to effectively manage the fund set up for them.

The money, he noted, when released later, would be “handled by citizens who have not been properly educated because you don’t have money to educate them now, some of who have died because you don’t have money to take care of their health needs; the roads are not good; the railways are not good and you still are keeping money for some other people who are yet to be born.”

Annual Report

Finance Minister Seth Terkper in his 2013 Annual Report on the two funds, stated that the GHF had accumulated to approximately GH¢116.5 million after just 14 lifting of crude oil.

Jubilee Fields

According to him, the fund kept in special off-shore investment accounts had been yielding impressive returns since it was established.
The Finance Minister stated in the annual report that, “by the end of the third quarter of 2013, GSF had returned investment income of $783,869.51, compared with an income of $205,008.40 in 2012. GHF, on the other hand, earned an investment income of $658,314.26. The return on both the GSF and GHF amounted to $1.442 million, compared with $0.286 million in 2012.”
The fund was set up in 2011 by the NDC government.

Mr. Asiedu Nketia’s prescription to pounce on the GHF particularly, has drawn serious criticism from some concerned Ghanaians.

According to a former Deputy Minister of Finance under the Kufuor administration, Professor Gyan Baffour, Asiedu Nketia’s prescription “is symptomatic of the lack of vision by the John Dramani Mahama administration.”

He observed that if the NDC government had vision, it would not set up the fund in the first place to be untouched for over three decades.

They would have devised means to use the funds in a way as to
benefit the future generation, according to him.

“The problem with this government is, they lack foresight; they cannot anticipate anything; they wait till there is a problem and then they try to manage it. So they are managing this country by crisis,” he remarked.
“And when 30 years down the road, you go and then tell your grandson or your children that I have some money sitting in some account for you. Then they will ask you; ‘are you stupid? And you didn’t use that
money to build the roads for us, you didn’t educate us?” the financial expert charged.

He said his last check on the GHF indicated that it had gotten to $120 million and that that amount was too small to make any impact in the current economic crunch.

Meanwhile, financial analyst Sydney Casely-Hayford has warned the NDC government not to make any attempt to touch the Ghana Heritage Fund because it had amply exhibited its inability to manage such money.
“The Heritage Fund belongs to the unborn children of the people of Ghana. It’s the future generation’s money and those of us who are here today should forget about touching it…let’s leave it alone, let it sit
there,” he told Citi FM.

“There is no way that the people of Ghana are going to relinquish the Heritage Fund to be spent by the NDC government; to be used to provide modules under GYEEDA (Ghana Youth Employment and Entrepreneurial Development Agency), SADA (Savannah Accelerated Development Authority) and all other things, we don’t have a clue where the money went,” he explained.