As part of fiscal consolidation efforts, government says it will wean off some institutions in 2016, and is assessing the feasibility of withdrawing support to some more.
Directors at the Ministry of Finance say the agencies to be taken off government subvention have been subjected to a scientific assessment of their revenue, expenditure and contribution to national development and have been found to be capable of subsisting on their own without support from government.
Those on the verge of being weaned off include the Driver and Vehicle Licensing Authority (DVLA), the Environmental Protection Agency (EPA), Energy Commission, Data Protection Commission, Gaming Commission, and the Securities and Exchange Commission which requested on its own to be taken off government support.
“All these will eventually be converted into companies where they will basically run as a company without any subvention from the government”, Dr John Baffoe, a technical advisor at the Ministry of Finance told journalists on Monday, November 17 at a post-budget seminar.
He added that the government is also considering weaning off some institutions in the near future or at least providing guidelines for the utilization of their internally-generated funds (IGF).
Those institutions include teaching hospitals, tertiary education institutions, the Forestry Commission, Minerals Commission, Ghana Broadcasting Corporation, Ghana Investment Promotion Council, Ghana Standards Authority and the Food and Drugs Authority.
“We are critically looking at them and their finances to see if they could be weaned off. If not, then we have to give them some guidelines on how they are going to use their internally-generated resources,” Dr Baffoe said.
Patrick Nimo, Director of Budget at the Ministry of Finance, said the government has changed the practice of allowing state departments and agencies to retain portions of their internally-generated funds and submit what should go to government in accordance with specifications in Act 735.
With the new arrangement, the gross IGF is lodged into the consolidated fund, after which a transfer of the IGF retainable by the institution, is made to it by government.
The objective is to improve efficiency in the use of IGF by removing its utilization from the sole discretion of state institutions.
“When you generate IGF in an institution, you shouldn’t think of it as just that institution benefiting from that IGF because the IGF came to you as a result of government policy so if you are under a ministry, the ministry should know what you are doing with IGF”, Mr Nimo said.
He added that it is also to allow IGF from higher generating institutions, to support more needy sub-institutions and partner institutions in their sectors.
By Emmanuel Odonkor