Here are the stories from Parliament for the second-week starting ending Friday, May 29th
FINANCE MINISTER TRIGGERS Bank of Ghana Act Section 30
Minister of Finance, Ken Ofori-Atta has submitted a request to Parliament to increase the limit of government borrowing for its COVID-19 emergency relief efforts per subsection (6) of Section 30 of the Bank of Ghana Act (Act 612). In presenting the ministry’s report explaining why it had to resort to such actions, Mr Ofori-Atta acknowledged the challenges that COVID-19 pandemic is posing to the fiscal operations of government and also on the 2020 budget through a reduction in revenues, extra spending under emergencies, and tight financing conditions. According to him, the government is not getting money due to the reduction of petroleum revenue as global crude oil prices drive downwards; shortfalls in import duties and other taxes; and shortfalls in non-tax revenues which are significantly affecting cash flows for the year and at the same time posing a threat to containing the pandemic. He said preliminary assessments on the impact of the pandemic on the economy puts the fiscal gap at about GH¢21.42 billion which includes revenue shortfall of GH¢15.85 billion and COVID-19 related expenses of GH¢5.57 billion. He intimated that sell-offs by non-resident investors have put liquidity constraints on the market which could affect the ability of local businesses from accessing cheaper sources of financing.
COVID-19 relief bond programme
Government plans to launch a Cedi denominated bond of GH¢10 billion for 10 years with a 2-year moratorium on both principal and interest payments to finance expenditures in time of emergency per subsection (6) of Section 30 of the Bank of Ghana Act 2002 (Act 612) which states, “In the event of any emergency, the Governor, the Minister and the Controller and Accountant-General shall meet to decide the limit of borrowing that should be made by Government and the Minister shall submit a report on the issue to Parliament within seven sitting days.” The coupon rate is pegged at the prevailing monetary policy. Bank of Ghana has already released the first tranche of the facility at GH¢5.5 billion to the Ministry of Finance as at Friday, 15th May 2020. Payment of the bond will begin in November 2022.
The government intends to introduce the following measures as a way of paying its debt to the Bank of Ghana:
The Ministry’s report has since referred to the House’s Committee on Finance for consideration and report.
MP QUESTIONS: Minister of Tourism
Minister of Tourism, Arts and Culture, Barbara Oteng Gyasi (MP, Prestea/Huni Valley) took her turn on Question Time on Thursday from Samuel Okudzeto Ablakwa (MP, North Tongu) who wanted to find out about from government the volume of visitors to Ghana in 2019 as part the ‘Year of Return’ initiative and how much revenue was accrued to the State that year. The minister in her prepared response told Parliament that the Year of Return project generated a sum of $3.3 billion in revenue to Ghana after a final analysis was done at the end of the project. According to her most hotels reported 100% capacity last December and further gave a breakdown of how tourists spent money during in various sectors during YearofReturn as follows:
Accommodations - 41%, Food & beverages - 21%, Shopping - 14%, Local transport - 8%, Entertainment - 5%, and other spending - 11%. She said a total of 126 African diasporans were granted citizenship. Mrs Oteng Gyasi gave mention to some "social projects" such as schools in Akosombo, Chorkor, Botianor; as well as boreholes constructed in Akropong, & an ICT centre in Nyamebekyre which she claims are the legacies of the YearofReturn project.
The media mileage that YearofReturn received is estimated at $3.5 million in advertising value; social media reach is valued at $1.9 million. The minister said the year of return has changed the African narrative & branded Ghana as the 'gateway to Africa'. "Celebrities" of African descent who visited Ghana & took part in the YearofReturn initiative shared their experiences on Facebook, Twitter, & Instagram which reached 20 million people combined, she revels. The minister then told the House of what government is doing to sustain the initiative with ‘Beyond the Return’ for the next ten years from 2020 to 2030.
Education Regulatory Bodies Bill, 2019
The public consideration of the said bill concluded on Friday, awaiting third reading.
Frank Bruce | PARLIAMENT House, ACCRA