Heritage Fund versus Heritage Debt; Ghana in introspection

Nana Bawumia8 President Akufo-Addo and Vice President Bawumia

Mon, 10 Sep 2018 Source: Denis Andaban

It has always been my commitment and passion to have my perspective on national issues. I have come to the full realization that silence is as destructive as wildfire. We need to speak out. That is the only way we can make our democratic dispensation more formidable and enviable to the rest of the world particularly in the African soil. My last piece landed me on a lot of empty threats and insults but I remain a citizen and not a spectator. Let me chronicle my opinion through a historical and comparative approach since my heading demands same.

The scramble and subsequent partition of Africa was orchestrated to satisfy an obvious cunning economic agenda by foreigners particularly, Europeans who were poised at siphoning our abundant natural resources to develop their countries. In fact, they achieved this motive because the radical industrialization transition in the West was fueled by the rich natural resources from Africa. Africa was the hub for mineral resources including: gold, bauxite, salt, manganese, among others. We could as well boast of arable agricultural land, cheap labour force, and Ivory and forest reserves inter-alia.

The Europeans were very hungry for these resources and devised very strong siphoning machinery.

Even though our people were not oblivious of the value of our resources and the general economic wealth of our continent, one would not be wrong to say that there is nothing much abundant permanently. They did not also have the technical accoutrements and knowledge to transform these resources to more valuable items for use. Knowing these fundamental weaknesses, the white man introduced the batter trade to cajole our people to give out these valuable economic resources that became basis for their industrialization. Even though, the batter trade was exclusively mutual, history tells us that our people were mostly cheated. They were given less valuable items for precious items. Clearly speaking, considering our historical antecedent, the White man effectively used the batter system to cripple our local economy. Apart from the fact that our people had developed endless taste for foreign goods, our people became more dependent on the whites by allowing our local industry like pottery, baking, curving, herbalism and others to collapse. That was the genesis of our wobbling economy largely precipitated by this intelligent robbery called batter trade.

Enough had happened during that time but political independence and economic freedom gave us another opportunity to redefine our economic path. The sad reality is that the long effects of batter trade system has influenced our economic decisions and many of our industries including, mining, production, hospitality and now oil and gas are largely controlled by the foreigners.We benefit less out of these resources because of our technology and capital deficit to exploit. This sad narrative of economic defect cannot be redefined any time soon. We need a strategic long term economic foresight and vision.

I salute the previous government who designed a strategic plan of spending the cash we receive from our oil exploitation. Our share might be meager considering the value of oil globally but the judicious use of whatever amount gotten could give us the best footing of economic liberation in the near future. The previous government created the heritage fund with this motive.

For the purposes of education, The Heritage Fund is a creation of section 10 of the Petroleum Revenue Management Act 815 enacted in 2011. The purpose of the establishment of this fund is to provide an endowment to support the development of future generations when the petroleum reserves have been depleted according to Act 815 (2011) an amended Act 893 (2015). The fund receives a percentage of oil revenue accrued to the Petroleum Holding Fund. In view of this, parliament of Ghana pegged this figure at 9%. This means that out of the total oil revenue received into the Petroleum Holding Fund the Heritage Fund receives only 9%. This amount is saved at the Bank of Ghana till oil reserves in the country have been depleted. The remaining, 91 go into the Annual Budget Funding Amount (ABFA) and Stabilization Fund. 70% of this goes into the ABFA which goes to support the annual budget of the country whilst the remaining 21 goes into the Stabilization Fund which is used to cushion oil price in the event of oil price fluctuations.

Today, there is another government that should have been pursuing similar path to ensure that our future becomes an epitome of economic progress and prosperity. Unfortunately, the recent move by government to bag into the country some humongous cash with dreadful conditions attached is an absolute contradiction to our quest for economic liberation and self reliance. It is also a walking contradiction of the president of Ghana earlier position on Ghana beyond aid. The very president that preached the Ghana beyond aid philosophy is the very one busily signing several MoUs that glaringly contradict the lofty philosophy of Ghana beyond aid. I think we must be consistent and be honest to the citizenry upon whose authority, power is exercised.

Now, to the specifics, we are informed by government, that it is engaging in an agreement to exchange our bauxite deposit for cash to enable us bridge our infrastructure deficit. I believe in using infrastructure as basis for economic expansion but that should not make us too desperate for money to execute same without considering the long term repercussions. The specific area of bauxite deposit is an area the country has invested to preserve. Local mining companies have been stopped from attempting to mine the area. In fact, small scale mining is stopped in Ghana, increasing unemployment and crime rates since these jobless individuals must survive by all means. Whether that is permanent or temporary could be another topic for discussion.

Also, as we speak, we have not been able to quantify the amount of bauxite we have in the area yet we are in a hurry to give our bauxite out for infrastructure. Could we not have partnered private mining companies, to exploit this resource, add value to it, export it to bring more cash into the economy to enable us expand our infrastructure? Is that too difficult or we want short cut to heaven? This could have created permanent jobs for those doing illegal mining.

A rather more ridiculous move is a certain "century loan". In my primary school, I learnt, century means hundred years. So we are taking a loan that we will use hundred years to pay? Are we really serious? If it is indeed true that government is committed to taking this century loan, then it is simply mortgaging our economic future. We are going back to colonization with this kind of loan I call "heritage debt. In my culture, when a man dies and leaves no property, he leaves a legacy of dignity but to die with debt to be paid by children and grandchildren, is the highest form of shame. It is an embarrassment and loss of dignity to the entire family. Actually, we are seeing it happen today under the current government. The NPP government wants to leave a legacy of debts beyond generations. That is very unfortunate.

Let's not allow political desperation to entrap us into generational abject poverty. It is a shame.

I have never been against borrowing. To borrow for economic transformation through infrastructural expansion is sensible investment but to now claim to revisit a methodology "batter which was used to destroy our economy and of which we are still leaving with the lasting repercussions is crass ignorance, incompetence and wickedness. We can't be sold like animals simply because we need money to execute political promises. If the government has a listening ear, it should slowdown and stop signing senseless agreements. The US military deal that was signed for a pantry 20million dollar is still very fresh in my mind. Let's not be adding more to the woes of the ordinary Ghanaian.

Let's reason and create a better future and desist from cheap act of accumulating century debts for our grandchildren. The next generation won't forgive the NPP government if it takes this century loan. It is a heritage debt that would stand after Nana Akufo Addo and his bloated government is no more!!! Let government swallow the pride by eating a humble pie relative to the ensuing issues surrounding the recent hunt for money at all cost. Civil society groups, think tanks and the clergy must show interest in this debate.

Columnist: Denis Andaban