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Ghana: Minority indicts Ofori-Atta of cooking figures in Mid-year review budget

The Minority in Parliament has accused the Minister of Finance Ken Ofori-Atta of cooking figures on the performance of the economy for the first half of the financial year 2017.

According to them the figures by the Minister were doctored to make government’s economic performance look good.

The minority at a press as conference addressed by former   deputy Minister of Finance Cassiel Ato Forson questioned the veracity of the figures presented by the Minister.

They described the  ‘’doctoring’’ of the figures as  “very shameful regrettable and cosmetic.”

“From appendix Table 5A: Page 53 of the Mid-Year Fiscal Policy Review of the 2017 Budget Statement and Economic Policy, Summary of Revised Central Government Operations-2017, the Minister of Finance has reduced domestic interest payment by an amount of ¢657,005,271 Ghana Cedis to create the impression that expenditure on domestic interest payment is being reduced. This is clearly artificially compressed and contrived,” he told members of the parliamentary press corps.

He accused the finance minister of  blatantly disregarding the cut off fiscal rules in accordance to the Financial Administration Regulations (FAR), Regulations 193.

He said “the attention of the Minority in parliament has been drawn to the reversal of interest payment of a colossal amount GHc758.5million and a review of the GDP without a formal Ghana Statistical Service data. At the end of end of the fiscal year 2016, we noticed that paragraph 14 and 15 of the mid-year review that the Minister of Finance presented to this honorable house on the 31st July 2017, it is quite clear the Minister made this reversal which violates the long standing cut off fiscal rules for the sole purposes of making the government’s dismal performance for the first half of the year 2017 look good.”

He also accused the Minister of lacking the authority to make the adjustment he made under the Financial Administration Regulations (FAR) Regulation 193 on Closure of accounts which states that ;
(1): “At the close of business of the LAST WORKING DAY of each month or FINANCIAL YEAR, whichever is applicable, the accounts shall be balanced off.
(2): “The RECEIPTS and PAYMENTS that belong to a period of a financial year OTHER THAN The reporting period of financial year, shall be shown in the accounts and the details shall be given in the NOTES in accordance with regulations 187 and 188’’.

He called on the Auditor-General and Parliament to immediately conduct an investigation into this violation of long-standing, “cut-off’’ fiscal rule by the Finance Minister.

Mr. Ofori-Atta told Parliament in his mid-year review budget presentation that the macro-indicators for the first half of the year are pointing in the right direction.

He said: “Progressively, confidence is being restored in the economy and we are hopeful that it will be sustained. The macro-indicators for the first half of the year are pointing in the right direction. We replaced the 17.5% standard rate to a 3% flat rate. We reduced the special petroleum tax from 17.5 to 15% and abolished duties on spare parts.

“The deficit on commitment basis is now on 10.9%, up from the previous 10.3%. In recent years, the country accumulated high debts; our debt stock increased to GhC122bn, which is 1154%. We inherited a weak economy, characterized by high fiscal deficits.”

Below is the full statement 

STATEMENT BY THE MINORITY IN PARLIAMENT ON THE CLANDESTINE REVERSAL OF INTEREST PAYMENTS BY THE MINISTER OF FINANCE IN PARLIAMENT ON AUGUST 1 2017.

The attention of the minority in Parliament has been drawn to the reversal of interest payment of a colossal amount of GH₵758.5 million and review of GDP (without a formal GSS Statement) at the end of Financial Year 2016 (Par 14 and 15).

It is quite clear that the Minister made this reversal, which violates long-standing ‘‘cut-off’’ fiscal rules for the sole purpose of making the government’s dismal performance for the first half of Financial Year 2017 “look good’’.

The action also purports to make the performance for FY 2016 worse.
This ‘’doctoring’’ of figures is very shameful. This to say the least is very regrettable and cosmetic. From appendix Table 5A: Page 53 of the Mid-Year Fiscal Policy Review of the 2017 Budget Statement and Economic Policy, Summary of Revised Central Government Operations-2017, the Minister of Finance has reduced domestic interest payment by an amount of ¢657,005,271 Ghana Cedis to create the impression that expenditure on domestic interest payment is being reduced. This is clearly artificially compressed and contrived.

This is a blatant disregard for cut off fiscal rules in accordance to the Financial Administration Regulations (FAR), Regulations 193.

It must be noted that Financial Year 2016 ended on a weekend (December 31 was a Saturday). The long-standing “cut-off” fiscal rule is that Expenditures and REVENUES that fall due on the last day of the month or year during a weekend, accrue to the next working day Jan 2, 2017. Indeed, this rule also applies to situations where the last working day falls on public or statutory holidays. For this reason, when the last working day of the month or year falls on a weekend or holiday, BOG also closes the books on the prior working day.

Therefore, Ghanaians must be alarmed that the Minister will unilaterally change a long-standing fiscal rule (and indeed business rule) with respect to only one particular EXPENDITURE (interest payment) for the misplaced and selfish purpose of making the performance of the First half of 2017 “look good”. Ghanaians must be even more alarmed that BOG will ostensibly reopen its books to allow this to happen.

Furthermore, we note with concern that the Budget did not state that MOF and BOG applied the same rule to revenues that accrued on Saturday 31st December 2016 but were paid on the next working day on Jan 4, 2017. To be consistent, the Minister and Governor should have reversed all cash buffers that were carried over to Financial Year 2017.

We call on the Auditor-General and Parliament to immediately conduct an investigation into this violation of long-standing, “cut-off’’ fiscal rule by the Finance Minister. Clearly, the Minister lacks the authority to make the adjustment he made under the Financial Administration Regulations (FAR) Regulation 193 on Closure of accounts. It reads;
(1): “At the close of business of the LAST WORKING DAY of each month or FINANCIAL YEAR, whichever is applicable, the accounts shall be balanced off.
(2): “The RECEIPTS and PAYMENTS that belong to a period of a financial year OTHER THAN The reporting period of financial year, shall be shown in the accounts and the details shall be given in the NOTES in accordance with regulations 187 and 188’’.
Checks on some Loan Agreement provisions indicate that where the last working day falls on a weekend, the “next working day” rule applies to interest and principal (debt service) payments.

Given these rules, the NDC did not go back to adjust the 2008 Financial Year records with ARREARS arising out of policies and actions such as SINGLE SPINE, “GANG OF SIX” ROADS, SUBSIDIES, etc.

As we aim to be law abiding and responsible citizens but not spectators, we all will be better served as a nation if these issues raised are treated with a sense of urgency, fairness and despatch by the Ministry of Finance for the development and in the supreme interest of our dear country, Ghana.

Signed:
Hon Casiel Ato Forson
Minority Ranking Member on Finance.

 

 

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