Economist Professor Godfred Bokpin says the idea to fall on the Heritage Fund to help support businesses and minimize the impact of Covid-19 on the economy should be the last resort for the government.
The Finance Minister, Ken Ofori-Atta yesterday called for the amendment of the Petroleum Revenue Management Act (PRMA) to allow the government to utilize portions of the Heritage Fund to fight the Covid-19.
“Amend the PRMA to allow a withdrawal from the Ghana Heritage Fund to undertake emergency expenditures in periods of national emergency. There is an estimated US$591.1 million in the Ghana Heritage Fund,” the Finance Minister told Parliament on Monday.
The Minister is also seeking the support of Parliament to amend the relevant laws to lower the cap of the Stabilisation Fund from $300 million to $100 million to enable the government scoop the excess funds to bridge the gap created by the economic impact of the pandemic.
“Mr. Speaker… Since we are faced with extraordinary circumstances which require extraordinary measures, we would like to propose the following measures for the consideration and support of the House – Lower the cap on the Ghana Stabilisation Fund (GSF) from the current US$300 million to US$100 million in accordance with Section 23 (3) of the Petroleum Revenue Management Act (PRMA).”
“This measure will enable the excess amount in the GSF account over the US$100 million caps to be transferred into the Contingency Fund, consistent with Section 23 (4) of the PRMA. The amount transferred into the Contingency Fund will be used to fund the Coronavirus Alleviation Programme (CAP). Through this process, an estimated GHȼ1,250 million will be transferred into the Contingency Fund to Fund the CAP. Mr Speaker, we, therefore, wish to seek approval from this August House for the Finance Minister to use the Funds which will be available in the Contingency Fund to fund the Coronavirus Alleviation Programm,” the Finance Minister said.
Commenting on the call for the usage of the Heritage Fund for the Covid-19 fight, Prof. Bokpin said it's a tricky one but it should be the last resort for the government.
"It's a tricky call certainly one will say where will the next generation be if the current generation is wipeout, I kind of agree with the Minister for Fiance that it is the last resort. Let's look at other options."