Reduce continuous dependence on development partners to fund capital expenditure - SEND Ghana

A social advocacy group focused on enabling local communities to engage the government and ensure they benefit from national policies and programmes, SEND Ghana, has advised government to slow down on its dependence on development partners to fund its capital expenditure.

In a press statement released on Thursday, December 1, 2022, the group noted that government’s contribution to the country’s capital expenditure continues to dwindle year after year.

The report reveals that in the 2023 budget, government funds amounted to 1.8 percent, while development partners contributed to 92.22 percent of the total allocations.

“Our analysis of the national budgets (2019-2023) shows that the government still relies heavily on Development Partners (DPs) to fund its capital investments for some major ministries. Investments in the provision of Water, Hygiene and Sanitation (WASH) services in the last four years have largely been donor driven. In the 2019 budget for the Ministry of Sanitation and Water Resources, 70.26 percent of projected allocation was sourced from DPs. In 2020, it increased to 82.39 percent," part of the release read.

"This trend continued in 2021 with projected funds from DPs, for purposes of capital expenditure, constituting 75 percent, while the GoG, Internal Generated Funds (IGF), and the Annual Budget Funding Amount (ABFA) collectively make up just about 25 percent. In the 2023 budget, a whopping 92.22 percent of the total allocation is expected to come from DPs while GoG’s contribution reduced from 8.48 percent in 2022 to 1.8 percent in 2023,” it added.

SEND Ghana acknowledged that while a massive contribution by development partners to the capital expenditure was essential for economic growth, over-reliance on external supports may hinder government’s agricultural modernization and industrialization initiative.

“While investment in CAPEX is critical in stimulating growth, over reliance on donor support, which is characteristically unpredictable, puts at risk the government’s drive in pursuing agricultural modernization and industrialization,” it added.

Parliament is expected to debate the 2023 budget in the coming week.



EAN/ESA