The Minister of Finance, Mr. Ken Ofori-Attah, has conceded to his inability to fulfill the constitutional obligation of allocating 5% of Ghana’s revenue into the District Assemblies Common Fund (DACF).
Article 252 (2) of the 1992 Constitution states that “subject to the provisions of this Constitution, Parliament shall annually make provision for the allocation of not less than five percent of the total revenues of Ghana to the District Assemblies for development; and the amount shall be paid into the District Assemblies Common Fund in quarterly installments.”
But speaking to the Ad Hoc Committee in charge of hearing the Censure Motion against him, the Finance Minister admitted that he was able to pay only 1.74% out of the 5%.
The issue came up when the Co-Chairman of the committee, Dr. Dominic Ayine, Member of Parliament (MP) for Bolgatanga Central, questioned the Minister as to why he did not comply with the Supreme Court’s judgment in the Kpodo and Another v Attorney-General case.
It would be recalled that in 2017, two National Democratic Congress (NDC) MPs, Mr. Benjamin Kpodo, MP, Ho Central, and Richard Quashigah, MP, Keta, who suspected the Finance Minister, Ken Ofori-Atta, of manipulating funds set aside for the district assemblies, proceeded to the Supreme Court to ascertain what accounted for the total revenue.
According to them, the formula the Minister used for the calculation left the assemblies poorer, because revenues from petroleum and other taxes were not added to the total revenue.
In its judgment, the Supreme Court said that it was, first of all, unconstitutional for the government to cap the disbursement to the DACF at 5%, but, however, ordered the Minister to take steps to ensure that 5% of all revenues of the country went into the DACF account.
At Friday’s hearing, Dr. Ayine asked that “under the Constitution, in terms of the decision in Kpodo and the Attorney-General, you are supposed to pay the five per cent as defined into the District Assemblies Common Fund. Is that correct?”
Mr. Ofori-Atta responded in the affirmative.
Dr. Ayine then put it to the Minister that he paid only 1.74 % in 2021, to which the Minister again responded in the affirmative.
Dr. Ayine then described the Minister’s inability to meet the target as non-compliance with the financial and fiscal laws of the country.
But, Mr. Ofori-Atta put up a very strong defence indicating that even though the Ministry was not able to meet the amount, it does not amount to non-compliance, because the country was running a budget deficit.
“We have gone through very difficult times that you are all aware of. There are lots of other arrears that we are making do on daily basis to be able to make sure the country is running,” he said.
Background
The Parliamentary Ad-Hoc Committee on Censure was set-up by the Speaker to probe the National Democratic Congress (NDC) Minority Caucus’ Motion calling for a vote of censure against the Finance Minister for mismanagement of Ghana’s economy.
The Minority has accused the Mr Ofori-Atta of causing economic hardship in the country by his actions and inactions at the ministry.
The Minority said the high cost of living, high fuel prices, food prices, inflation, the depreciation of the Ghanaian cedi and the country’s huge debt stock was caused by Mr. Ofori-Atta hence the need for motion to remove him from office.
Below is the interraction that ensued between the Minister and Dr Ayine
Dr. Ayine: All right. My second question is in relation to the issue of fiscal recklessness. Would you agree with me that non-compliance with the statutes and the regulations relating to the financial sector generally points to fiscal recklessness? Would you? Non-compliance-
Mr. Ofori-Atta: Non-compliance with what?
Dr. Ayine: Non-compliance with the Public Financial Management Act and its regulations as well as the Fiscal Responsibility Act. Non-compliance.
Mr. Ofori-Atta: Well, I do not know what you are referencing and I am still trying to figure out the understanding of “recklessness”.
Dr. Ayine: So, the legal and regulatory framework for the management of the financial and fiscal resources of the state is there for a reason. They are there to constrain governmental action that results in losses to the State.
Mr. Ofori-Atta: I would imagine so.
Dr. Ayine: And I am saying that noncompliance is an indicator of fiscal recklessness.
Mr. Ofori-Atta: Non-compliance by who? Of what?
Dr. Ayine: Non-compliance by, let us say, a Minister of Finance or a Minister of State a that is indicative of fiscal recklessness.
Mr. Ofori-Atta: Well, I do not know because I have not evinced It-
Dr. Ayine: You have not what?
Mr. Ofori-Atta: I have not seen it. I have not evinced it.
Dr. Ayine: Have you read the Auditor General’s report?
Mr. Ofori-Atta: Certainly, I have.
Dr. Ayine: The Auditor-General’s report for 2021. Have you seen it? (Pause]
[Interruption]
It is a published document, it and it has been laid. Once it is laid, it becomes a it public document, so the fact that – [Interruption] – Yes, it is not final, but that does not mean that am disbarred from asking the Minister for Finance questions on it. [Pause]
All right, let me take it from another angle. Hon Minister for Finance, you are very well aware of the decision of the Supreme Court on Kpodo and the Attorney-General, are you not?
Mr. Addo Atuah: Mr. Cochair, this is indeed a legal question, and I was wondering if the Hon Minister would be in a position to answer such a question.
Mr. Hammond: I have been quiet because of what it relates to. That case is notorious for what it relates to so I was wondering whether we should give him the chance to answer whether he is it aware it has been brought to the legal people’s attention or it has not. We are happy to hear from him.
Dr. Ayine: In fact, personally wrote to the Minister for Finance and attached a copy of the judgement in Kpodo and the Attorney-General.
Mr. Ofori-Atta: So then what is the point of the question? Whether I read your letter?
Dr. Ayine: No, not at all. The point of the question is about non-compliance with the decision and the Constitution, with respect to the per cent total revenue of Ghana that is to be paid to the District Assemblies Common Fund. [Interruption]
Hon Minister for Finance, are you aware of the decision of the Supreme Court in Kpodo and the Attorney-General?
Mr. Ofori-Atta: Yes, Mr. Cochair.
Dr. Ayine: Very well. And you are aware that in that decision, the Supreme Court ruled in relation to the definition of total revenues of Ghana. Are you not?
Mr. Ofori-Atta: I am aware. Mr Chairman.
Dr. Ayine: And under the Constitution, in terms of the decision in Kpodo and the Attorney-General, you are supposed to pay the five per cent as defined into the District Assemblies Common Fund. Is that correct?
Mr. Ofori-Atta: That is correct. Mr Chairman.
Dr Ayine: Not 5 less than 5 per cent of the total revenues of Ghana.
Mr. Ofori-Atta: I see you are being helped by the people on our side. [Laughter]
Dr Ayine: No.
Mr. Ofori-Atta: Thank you very much. Mr. Cochair, there are two distinct issues: there is the awareness when the judgement came, and we changed therefore, the calculation of how we ensure that the total revenue is calculated. And if you see the figures that we then commit to allocate, it is within that bracket.
Now, whether because of financial constraint, we are able to fulfil them, it is another issue. So whether you are talking about arrears or whether you are talking about compliance, that is a very different question, so I would like to know.
Dr. Ayine: Well, in 2021, you did only 1.74 per cent.
Mr. Ofori-Atta: Yes. It does not mean that we did not comply –
Dr .Ayine: That is non-compliance.
Mr. Ofori-Atta: We were not able to meet the amount.
Mr. Cochair we are running a budget deficit. We have gone through very difficult times that you are all aware of. There are lots of other arrears that we are making do on daily basis to be able to make sure the country is running. So the fact that that amount of resource has not been brought to DACF does not mean that we are not committed to complying with the Supreme Court ruling.
Dr. Avine: Yes. All right. Hon Minister, I have in my –
Mr. Hammond: I think my Hon Colleague has finished with that. But Hon Minister
– [Interruption]
Dr. Ayine: So Hon Minister, I have here the PIAC Newsletter of issue numbered 2, July to December, 2022 – [Interruption] – I am entitled to refer to published documents in laying the basis for my question.
Mr. Hammond: Mr. Cochairman, before you put the question, this is in relation to which count?
Dr. Ayine: Non-compliance with the financial and fiscal laws of the country.
Mr. Hammond: Non-compliance. Could we go back to the charge sheet? Well, we do have charge sheet, actually.
Dr. Ayine: It says that:
“For the first time since Ghana started receiving petroleum revenue in 2011, the DACF received an amount of GHC32.380,403.91, following the 2019 decision of the Supreme Court in the case of Kpodo vs The Attorney-General. However, the disbursement made was 1.74 percent of the ABFA instead of the 5 percent specified in the Supreme Court judgement.
Is that correct?
Mr. Ofori-Atta: Mr. Cochair, I do not know that am getting through with the answer have categorically said that we know of that, and therefore, if you look at the budget, the treatment will show you the equivalent of 5 per cent, and that is a fact. The question is whether we have the resources to be able to comply.
Dr. Ayine: Well, the resource envelope does not matter. What matters is whether you are complying with the percentage, so that if you have a resource envelope, you should still be able to do not less than 5 per cent of that for purposes of complying with Kpodo vs the Attorney-General. That is the point that I am driving at. Anyway, Cochair, I think I am done.
Mr. Hammond: Hon Minister. thank you very much. My Hon Colleagues says it is all right. Let us put on record: you have been a Finance Minister for about six years now.
The constitutional provision has been in place since 1993. Do some recollection for us; you can or you cannot, but do your best. As far as you can recall, do you know any Minister for Finance who has been able to comply with the spirit and letter of this particular provision
Dr .Ayine: No, this question
Mr. Hammond: You have already overruled me you will not overrule me. I am asking my question.
Dr. Ayine: Clerk, the question is disallowed.
Mr. Hammond: Let me finish. When am finished you would make your comment. would let you make your comment. – [Uproar] – may we have some sanity please! Order! Calm down. Nobody will push me from the question I am-
Dr. Ayine: Hon K.T. Hammond. When you were on the floor on your question, I did not interrupt you gave you the space.
Mr. Hammond: Cochairman, you have actually interrupted me. You said you finished, we thanked you. My question is: as far as you know, is there any Minister for Finance who has been able to comply with this particular provision? It is yes or no. When I am done and you want to make whatever point, it is up to you.
Who is going to call a point of order on the Chairman? – [Laughter] – Can you answer Hon Minister? – [Interruption]
Hon Ablakwa, you repeated this. There is another provision in the Standing Order. When there is an issue to which an answer has been given, the Standing Order says you cannot repeat that question. You have drawn Standing Order 200 to our attention, you have been overruled two times, yet you have still raising it. You have been overruled 10.000 times.
[Laughter]
Hon. Minister?
Mr. Ofori-Atta: Cochair, I really do not know of any Minister for Finance
Mr. Hammond: Difficult for Ministers for Finance to handle that. Thank you very much Hon Minister.
Mr. Ablakwa we know the case. We know the case of Kpodo, Quashigah and all of that.
It is not antecedence.
Dr Ayine: Who was the finance minister in 2019?
Mr. Ablakwa: Hon Chair, with all due respect, the Supreme Court decision is a recent decision. What is the relevance in going to find out if Ministers for Finance since 1992 complied with a 2019 decision?
Mr. Hammond: You are completely out of order.
Dr. Ayine: Order!
Mr. Hammond: Hon Minister for Finance, thank you very much. Hon Colleagues, thank you. My Hon Colleague and I are done with our questions, and Hon Members are done with their questions. It is up to you.
