Flow of revenue impacts on MDAs budget request

Accra, July 19, GNA - Professor George Gyan-Baffour, Deputy Finance Minister, on Wednesday told Parliament that if Government Ministries, Departments and Agencies (MDAs) were not receiving their approved ceilings it was because the flow of revenue was not meeting expenditure at a particular period.

He said the reason for this state of affair was varied and might include delay in payment of taxes and late disbursement of donor funds. The Deputy Minister was responding to a question on why almost all MDAs never received their budget request even when they remained within the ceilings imposed by the Finance Ministry.

"Mr Speaker, there is also the cash control instructions, which are issued to MDAs detailing their monthly cash ceilings to control the distribution of MDAs allocation over the 12 month period. Again this is subject to availability of funds in the consolidated funds." "MDAs are, therefore, enjoined to, immediately on receipt of these instructions, start their processes for request for funds which they are to lodge with the Ministry. Funds are, therefore, released to the MDAs depending on when applications for release of funds are submitted to the Ministry."

In response to another question from Mr Sampson Ahi, (NDC-Juaboso) on when cocoa bonuses for the 2004/2005 season would be paid to cocoa farmers, Prof Gyan-Baffour said bonus payments were made to the farmers at the end of a season when, "better than expected revenue due to increased free on board (F.O.B) prices are paid."

He said at the beginning of every cocoa season, the Producer Price Review Committee met to agree on the producer price to be paid to the farmers and fees and rates for other stakeholders.

"These rates are agreed upon on the basis of certain parameters, the major ones being the forecast average F.O.B price, forecast output to be realised during the season and the average exchange rate. "At the end of the season, if these forecast estimates result in increased earnings than expected, it is only then that bonuses to farmers are paid," he said.

The Deputy Minister, therefore, said in view of the reduction in purchase figures and F.O.B price achieved, COCOBOD was unable to pay bonuses to the farmers for the 2004/2005-crop season.