Finance Ministry diverts 5% District Assemblies Common Fund budget funding for 2021, 22 – PIAC report

April 21, 2023

The has failed to transfer five per cent of the Annual Budget Funding Amount (ABFA) to the District Assembly Common Fund (DACF) for two consecutive years, according to a report by the Public Interest and Accountability Committee (PIAC).

This is despite a directive by the Supreme Court in 2019 that the Minister of Finance must comply with the decision in the disbursement of funds to the DACF. In 2021, the Ministry of Finance was only able to transfer 1.74% of the ABFA, and in 2022, it could only transfer 2.39%.

The report shows that the Ministry's recent inability to transfer the required amount indicates a lack of commitment to development at the local level.

The disbursement of funds to the Industrialisation Priority Area also received criticism in the report. The area received GH¢9.29 million, which represented only 0.20% of the total ABFA of GH¢4.41 billion. This disbursement, which represented only 4.29% of the amount budgeted for the priority area for 2022, highlights the need for the government to invest more in industrial development.

Despite this, the Ministry of Finance transferred an amount of GH¢643.61 million (US$73.68 million) to the Ghana Infrastructure Investment Fund (GIIF) in 2022 to support the government's Agenda 111 Project. This is the second consecutive year that GIIF has received funds for the project, with GH¢290.38 million (US$49.39 million) allocated to the Fund in 2021.

However, PIAC has recommended that disbursements intended for Agenda 111 should be directed to the Ministry of Health under the health component of the Education and Health Priority Area, in line with the project's objectives. Additionally, GIIF “should focus on investing in commercial infrastructure projects, as mandated by the GIIF Act, 2014 (Act 877) and policy guidelines of the Fund.”

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