Business News Tue, 2 Aug 2016

Road Fund gets GH¢500m from biting Energy levy

The Minister for Roads and Transport, Alhaji Inusah Fuseini has said that the Road Fund has earned close to GH¢500million from the proceeds from the controversial Energy sector levies imposed on consumers at the beginning of this year.

This, Alhaji Fuseini believes will help to shore up funds available to the Road Fund to meet its road network maintenance budget at a time the road fund levy has also been increased.

“The road fund benefits from the Energy sector levy. So far we have been able to net GH¢500m from the portion which comes to the road fund”, he told the B&FT after the presentation of the supplementary budget to parliament last week.

According to the Finance Ministry, total revenue to be generated this year from the Road Fund Levy and the Energy Fund Levy as a result of the implementation of the Energy Sector Levies Act, 2015 (Act 899) is around GH¢1 billion.

Transfers to the Road Fund is estimated to increase by GH¢784.3 million, from GH¢277.5 million to GH¢1 billion on account of the increase in the Road Fund Levy as indicated in the Energy Sector Levy law.

Some road sector policymakers have argued that the poor nature of roads in the country could worsen unless there is an upward adjustment in the road levies to increase the inflow into the road fund.


Currently, the country’s road infrastructure is valued at over US$6billion -- though there remains a deficit in the sector that requires huge financial outlay to address, the Parliamentary Select Committee on Transport noted in its recent report.

The Road Fund (Amendment) bill 2016, recently passed by Parliament, has empowered the Fund to borrow on its own balance sheet from financial institutions to meet maintenance needs for the growing road network in the country.

Mr. Fuseini in explaining the effects of the Road fund on the quality of road networks in the country said: “The expansion of this country in terms of settlement grows about 10percent so every year you have about 10percent catching to do. People develop without recourse to planning regulations, so every year you have to be able to anticipate and deal with situations on expansions into areas which hitherto were not part of the road networks of this country” he added.

He also attributed the deficit in the quality of roads in the country to the more than expected population growth rate adding: “I am attributing the deficit to population growth and expansion, which is clearly ahead of the planning authorities”.

“Roads are very important. When you do roads you facilitate the movement of goods and services. In Ghana, 93percent of all goods and services are by road. When you do developed road networks into farming communities and farm gates you facilitate the movement of these produce to the market, so you reduce poverty of people who are farmers, because if roads are not there , the food produced will rot”.

Source: B&FT