No more oil money for Free SHS

The government has decided to completely cut the Annual Budget Funding Amount (ABFA) allocation for its Free Senior High School programme.

This means the government will not spend proceeds from the country’s oil resources on the programme which is entering its third year of implementation.

A report of the Parliamentary Select Committee on Education on the annual budget estimates of the Ministry of Education for the 2019 financial year stated that the ministry’s 2019 budgetary allocation of GH¢12.87 billion would not be sourced from the ABFA.

Of the GH¢12.87 billion allocated to the ministry to fund its programmes and activities, GH¢1.682 billion had been earmarked for the implementation of the Free SHS programme.

Given that the Scholarship Secretariat which operates under the Office of Government Machinery has been tasked to cater for the direct funding of the Free SHS programme since 2018, the GH¢1.682 billion budgetary allocation for the programme had been pencilled out of the total budgetary allocation to the ministry for the Scholarship Secretariat.

The amount has, however, been appropriately captured under the Office of Government Machinery, leaving the ministry with GH¢11.195 billion to cater for physical infrastructure and service delivery in education, a priority area that has been funded directly from the ABFA in the past.

The ABFA allocation to Physical Infrastructure and Service Delivery in Education in 2018 overshadowed allocations to other priority areas such as agriculture and service delivery in health.

For instance, out of the GH¢1.546.38 billion approved to be spent as ABFA in the year 2018, of which a total of GH¢610.18 million, representing 49.0 per cent of total ABFA receipts, education alone received over GH¢417 million.

Criticisms

Last year, the government reduced the ABFA allocation to the ministry by a staggering 95.3 per cent, from GH¢212 million in 2017 to GH¢10 million.

This followed stiff criticisms by civil society groups that it was risky for the government to rely solely on oil revenue to fund the free SHS programme, insisting that it must diversify its sources of funding for the programme due to the instability of oil prices on the world market.

The Minority in Parliament insisted that using oil money to fund the programme at the detriment of other sectors of the economy was unconstitutional, and threatened to head to court to seek redress.

To counter those assertions, President Nana Addo Dankwa Akufo-Addo said the use of the country’s oil revenues to fund the Free SHS programme was the most appropriate use of the funds.

“We are using some of the income from our oil revenue to fund the programme. I believe strongly that this is the most equitable and transparent use of the oil revenue, instead of it finding its way into the pockets of politicians and bureaucrats,” President Akufo-Addo said.

Govt U-turn

Despite the strong stance of the President to use proceeds from the country’s oil revenue to fund the programme which is one of its flagship initiatives, the GRAPHIC BUSINESS has learnt that the Ministry of Education was not allocated funds from the ABFA this year.

Restricting the funding of the programme with oil proceeds may spark off the vexed conversation about the sustainability and smooth run of the programme. 

 The Chairman of the Public Interest Accountability Committee, Dr Steve Manteaw, told the paper that his office had the understanding that the government was funding the Free SHS programme from the ABFA.

“My understanding is that the ABFA was catering for the fees of the SHS students, he said.

PRMA restrictions

In examining the use of oil revenue in the country, the Petroleum Revenue Management Act (PRMA) states that after the Ghana National Petroleum Commission (GNPC) receives its portion of oil profit, 70 per cent of the remaining profit must be lodged in the ABFA.

The law also stipulates that 70 per cent of the ABFA must be invested in infrastructure projects with the remaining 30 per cent to be allocated to priority areas, including education.

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