Use Heritage Fund to support economy – TUC

The Trades Union Congress (TUC) has asked the government to inject about GHS18billion into the Ghanaian economy to save jobs following the coronavirus pandemic.

The Head of Research at the TUC, Dr Kwabena Nyarko Otoo, said the TUC recognizes that the government finds itself in a difficult situation due to the impact of the COVID-19 on the economy.

However, he said, the government can either print more money or borrow form the Ghana Heritage Fund (GHF) to support the economy at this moment.

“Government can borrow from the Heritage Fund to support the economy,” he told Alfred Ocansey on the Sunrise show on 3FM Wednesday May 13.

He added : “We went to borrow from the IMF with all the conditionality. If we were able to borrow from the IMF, it should be safer to ask government to borrow from the future. So that we replenish that fund when the COVID- storm is over.”

It is recalled that moves by the Finance the government to touch the GHF to deal with the COVID-19 effect on the economy met opposition from some think tanks and civil society groups inducing the Africa Centre for Energy Policy (ACEP), Civil Society Platform on Oil and Gas and others.

The Finance Minister told Parliament on Monday March, 30, 2020.that the government planned to amend the Petroleum Revenue Management Act (PRMA) to enable it withdraw funds form the GHF to undertake emergency expenditures in periods of national emergency.

He revealed that there is an estimated US$591.1 million in the Ghana Heritage Fund.

He told Parliament that : “I will now update the House on measures Government is proposing to close the fiscal gap. Since we are faced with extraordinary circumstances which require extraordinary measures, we would like to propose the following measures for the consideration and support of the House:

“Lower the cap on the Ghana Stabilisation Fund (GSF) from the current US$300 million to US$100 million in accordance with Section 23 (3) of the Petroleum Revenue Management Act (PRMA). This measure will enable the excess amount in the GSF account over the US$100 million cap to be transferred into the Contingency Fund, consistent with Section 23 (4) of the PRMA.

“The amount transferred into the Contingency Fund will be used to fund the Coronavirus Alleviation Programme (CAP). Through this process, an estimated GH?1,250 million will be transferred into the Contingency Fund to Fund the CAP. Mr. Speaker, we therefore wish to seek approval from this August House for the Finance Minister to use the Funds which will be available in the Contingency Fund to fund the Coronavirus Alleviation Programme.

“Arrange with BOG to defer interest payments on non-marketable instruments estimated at GH?1,222.8 million to 2022 and beyond;

“Adjust expenditures on Goods & Services and Capex downwards by GH?1,248 million; Secure the World Bank DPO of GH?1,716 million; Secure the IMF Rapid Credit Facility of GH?3,145 million; Reduce the proportion of Net Carried and Participating Interest due GNPC from 30% to 15%;

“Amend the PRMA to allow a withdrawal from the Ghana Heritage Fund to undertake emergency expenditures in periods of national emergency. There is an estimated US$591.1 million in the Ghana Heritage Fund.”