The Government of Ghana is to spend GH¢50 million on petroleum subsidies next year. It has so far, this year, spent GH¢25 million.
Next year’s petroleum subsidy allocation was announced on the floor of Parliament by Mr James Avedzi, Chairman of the Finance Committee, as the House considers the budget estimates for the Government to finance its obligations such as payment of pensions and gratuities for the 2015 financial year.
The House approved an amount of GH¢22 million as budget estimates for the Government to finance its obligations such as payment of pensions and gratuities for the 2015 financial year.
Votes for such expenditure items were titled “Services of Other Government Obligations.”
Mr Avedzi noted in the committee’s report on the vote that; “officials from the Ministry of Finance, however, explained that the assumptions underlying the 2015 allocation is that the automatic petroleum price adjustment will continue in 2015.
“The allocation is intended to pay for any excess that may arise in the course of the cross subsidy implementation,” he said.
On projections for social security payments, Mr Avedzi said the committee noted that employees’ contribution of social security had been projected as 10.3 per cent of estimated wage bill for 2015 instead of the actual statutory figure of 13.5 per cent of basic salary.
He said officials from the Ministry of Finance explained that the 2015 estimated wage bill actually comprised other elements on which social security was not payable and, therefore, projecting the social security contribution at the 13.5 per cent might lead to double counting and over estimation.
“The officials further explained that the current system made it difficult to isolate the component of the wage bill on which social security was applicable and deductible and as such the projections are currently based on five-year average of social security payments by government,” he said.
He said it was, however, added that the Controller and Accountant-General’s Department actually used the statutory 13.5 per cent in the computation and payment of the actual social security payments.
He spoke also on outstanding payments and said the committee observed that as at September 2014, outstanding payments into the National Health Insurance Fund stood at one billion Ghana cedis while GET Fund was GH¢379, 558,315.
“Outstanding Social Security payment stood at GH¢948,052,418 and that of DACF was GH¢410,223,600,” he said adding that the committee was informed that the Government intended to remain current regarding social security and as a result had reached agreement with SSNIT to securitise the outstanding social security contributions arrears.
On the National Health Insurance Fund, Mr Avedzi said the committee was informed that the Government intended to settle all arrears before the end of the 2014 fiscal year whilst arrangement were far advanced to settle up to the second quarter DCAF arrears by the end of 2014.
He announced that the remaining two quarters would be made in 2016 and 2017 financial years.