Home National News Ghana EITI told GIFMIS likely to obstruct separate mining cash account

Ghana EITI told GIFMIS likely to obstruct separate mining cash account

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By Frederick ASIAMAH

The Ghana Extractive Industries Transparency Initiative (GHEITI) Secretariat and Multi-Stakeholder Group (MSG) are to commence discussions with the Ministry of Finance to relax its directives to Metropolitan, Municipal and District Assemblies to create single treasury accounts.

This should allow MMDAs, which host mining activities, to comply with the GHEITI aggregator’s recommendation for the creation of special accounts for holding mineral royalty funds transferred from the Mineral Development Fund (MDF)

In the GHEITI Report on the Mining Sector 2014, the aggregator observed, in relation to dedicated bank accounts for royalty disbursements, that “District Assemblies continue to receive mineral royalty disbursements into the main account (normally IGF Account) of the District. Where the districts have designated accounts for royalty receipts, other transactions are also carried through that same account.

“Again some of the district Assemblies transfer some amounts of royalty receipts back to the IGF account.”

Consequently, it was recommended that “The District Assemblies should have dedicated bank accounts for mineral royalty receipts. These accounts should be used exclusively for mineral development purposes.”

Mr. Kweku Boa-Amposem, head of consulting firm Boas and Associates – the GHEITI Aggregator – has insisted that having a dedicated account in place would make it easy to track the utilisation of mining funds at the sub-national level.

But there has been concerns raised about the recommendation at GHEITI’s latest two-day sub-national level dissemination workshop for district assembly officials, assembly members, traditional authorities and community representatives held at New Abirem, capital of the Birim North District, Eastern Region last Thursday and Friday.

The difficulty for district assemblies, as was raised by officials of the Birim North District Assemblies, is how to implement the recommendation in the wake of government’s directives relating to the implementation of the Ghana Integrated Financial Management Information System (GIFMIS).

The GIFMIS was launched in September 2009, as part of the Public Financial Management (PFM) Reforms in Ghana. The Controller and Accountant General’s Department (CAGD) under the auspices of the Ministry of Finance is responsible for the reforms.

It is emerging that the central government, through the Ministry of Finance, is instructing assemblies to have one account under the GIFMIS.

Bashiru Abdul-Razak of the GHEITI Secretariat, which sits at the Ministry of Finance, gives assurance that this is something that “we from the Ministry of Finance will pick up and see whether sometimes we can give exemptions in some of these cases.”

Business Day Ghana understands that the running of multiple accounts by assemblies brings about excess cost in terms of interest payments on such accounts. Thus, from the view point of government, it makes economic sense for assemblies to run a single treasury account.

That notwithstanding, Dr Steve Manteaw, Co-chair of the Multi-Stakeholder Group (MSG) under the GHEITI, believes it will be in order to create a special dispensation for mining funds. “We have done beautiful things in the petroleum sector. So, all the petroleum revenues go into a dedicated account at the Bank of Ghana called the Petroleum Holding Fund. From there they are disbursed; 70 per cent to the budget, 30 per cent to the Petroleum Funds – the Stabilisation and Heritage Funds.

“This is informed by EITI, really. Unfortunately, we have not gone back to correct the defects in the mining sector. This is something that I think the EITI MSG should pick up to ensure that, at least, we do for mining, what we have done for oil, which has earned them so much praise internationally.”

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