Using the Heritage Fund to bankroll the government’s Free Senior High School programme is apt, but the money must be paid back with interest after three years, pressure group Alliance for Accountable Governance (AFAG) has said at a press conference in Accra on Thursday, 16 February.
“This policy, in our opinion, has nothing to do with politics. AFAG holds the view that this is about the future of the youth of this nation. For this reason, AFAG is not against the use of the Heritage Fund in supporting this great policy.
“However, AFAG is of the opinion that any amount of money taken from the Heritage Fund to support the Free SHS should be considered as a loan payable at an interest rate commensurate to the returns the Heritage Fund would have made if the fund had been invested in the open market. We believe that we need to raise the needed money to begin the programme. The Heritage Funds is one secure way for which funding could be raised for the programme, however, the money should not be free,” Mr Arnold Boateng, Secretary to AFAG said.
AFAG has also proposed the setting up of an SHS Fund by the government as a permanent means of bankrolling and sustaining the Free SHS programme.
Meanwhile, policy think tank IMANI Africa’s Patrick Stephenson has said Ghana needs about $600 million per annum to fund and implement the Free Senior High School programme introduced by the Akufo-Addo government.
The Ghana Heritage Fund was established in 2011 by Section 10 (1) of the Petroleum Revenue Management Act, 2011 (Act 815). It is meant to serve as an endowment for future generations. It is not supposed to be touched until after 15 years of its establishment.
Each year, eight per cent of oil revenue is deposited into the fund. According to figures from the Bank of Ghana, in the first half of 2016, the Heritage Fund received US$5.79 million while the Stabilisation Fund received US$13.52 million.
In the second half of 2016, Heritage Fund received US$6.85 million, while the Ghana Stabilisation Fund received US$15.99 million.
As of December 2016, the Heritage Fund had accrued US$262.57 million, making up eight per cent of total revenue from oil proceeds distributed to the Petroleum Holding Fund (PHF) and the Ghana Petroleum Funds (GPFs).
The Annual Budget Funding Amount (ABFA) received a total of US$1,473.45 million representing 43 percent of the total revenue while the Ghana National Petroleum Corporation (GNPC) received a total amount of US$1,057.30 million equivalent to 31 percent of total revenue.
The Ghana Stabilisation Fund (GSF) received an amount of US$633.87 million (18 per cent).
Senior Minister Yaw Osafo Marfo recently said the Akufo-Addo administration intended relying on the Heritage Fund to bankroll the Free SHS programme which starts in September this year.
Mr Osafo Marfo stated at a forum in Accra on Tuesday 14 February that: “We have to make an amendment to say that X per cent of the Heritage Fund, or the Petroleum Fund will be used to support second cycle education. If we think that industry requires a certain stimulus that will enable jobs to be created and you are creating a job to build Ghana, you can look at it and put in a certain amount. We are [also] looking at agriculture.”
President Nana Addo Dankwa Akufo-Addo recently assured Ghanaians that his government “will fund the cost of public Senior High Schools for all those who qualify for entry from the 2017/2018 academic year onwards”.
Spelling out the details of the policy, “so that no one in Ghana is left in any doubt”, President Akufo-Addo explained: “By Free SHS, we mean that, in addition to tuition, which is already free, there will be no admission fees, no library fees, no science centre fees, no computer lab fees, no examination fees, no utility fees; there will be free textbooks, free boarding and free meals, and day students will get a meal at school for free.”
The president added: “Free SHS will also cover agricultural, vocational and technical institutions at the high school level. I also want to state clearly again that we have a well thought-out plan that involves the building of new public senior high schools and cluster public senior high schools”.
President Akufo-Addo made this known on Saturday, February 11, 2017, when, as the Special Guest of Honour, he delivered a speech at the 60th anniversary celebration of Okuapeman School.
Speaking to Moro Awudu on Class91.3FM’s Executive Breakfast Show on Thursday, 16 February, on the proposed means of funding for the programme, Mr Stephenson said the “total proceeds that we have sitting in the Petroleum Fund now – some rough computation suggest we have a little over $300 million. How much do we need to invest in free education annually? Rough computations suggest something in excess of $600million if we have to do it right and do it well. Now if you decide to go and take the resources out of your Petroleum Fund, clearly it still doesn’t fix your entire financing problem that you need and all of that is gone in just a year. Not that it’s a bad thing in itself, you should be able to demonstrate, for example, that it’s going to be sustainable for the long term and whatever they are putting in there goes in there, but we haven’t heard all of these things.”