The Dean of the University of Cape Coast School of Business, Prof. John Gatsi has expressed his disappointment at the Christian Council of Ghana over their calls for the Heritage Funds to be used to build the National Cathedral.
According to the economist, “The Christian Council should actually be calling for consolidated accountability of the use of petroleum revenue since 2011”
His comments were contained in an article following the call by the Christian Council of Ghana led by Dr. Cyril Fayose, the General Secretary for the government to dip its hands in the heritage funds to building the national cathedral.
Prof. Gatsi warns any such attempt to use the heritage funds in that manner will be a depletion of the country’s foreign reserves and by extension illegal.
“The heritage fund and the stabilization fund serve as fiscal buffer for the economy and as part of the international reserve of the economy. The suggestion means depletion of the international reserves which may undermine the performance of the currency.” – he said
Schooling the Council on the oil revenue, he explained “The Christian Council should first appreciate the fact that petroleum revenue is highly regulated in terms of disbursement and investment. About 70% of petroleum revenue is expected to be spent to finance the budget annually and 21% as support for the economy (stabilization fund) and only 9% in the heritage fund as an endowment for the future. We technically have at our disposal 91% of petroleum revenue if we decide to use the stabilization fund as done severally including 2020.”
“Why join the call to use the only 9% heritage fund?” – he fumes
“The Christian Council should actually be calling for consolidated accountability of the use of petroleum revenue since 2011.” – He added
Again, the lawyer said “The other issue that the Christian Council should appreciate is that the Petroleum Revenue Management Act does not permit the use of the heritage fund until after fifteen (15) years from 2011. However, the law allows for parliamentary resolution after 2026 to use part of the accumulated interest on the heritage fund to finance development infrastructure. Any suggestion to use the heritage fund is illegal and not acceptable. Act 815 simply does not allow such calls.”
Dr. Fayose’s call is coming in following reports that the government after releasing over GHc20million as a seed fund
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Christian Council joined the tempted to use the heritage fund to finance the national cathedral
The Christian Council sparingly speaks on national interest issues and when the Council does, it is taken with seriousness and sometimes shapes the discourse. That is why alternative opinions should be expressed to generate a healthy debate on the use of the heritage fund.
It is a time-tested principle that when engaging in the construction of extraordinary projects such as the National Cathedral, the principles of prior financial and other resource planning are considered to avoid inadequate resources and abandonment of projects as penned in the book of Luke.
Luke 14:28 “ For which of you, intending to build a tower, does not first sit down to count the cost, whether he has enough to finish “.
I am not at this point discussing the appropriateness of the tower (the National Cathedral). I am also not even discussing the economic and tourism potential of the cathedral. I am discussing whether or not the call by the Christian Council of Ghana, suggesting that the heritage fund should be used to finance the National Cathedral should be supported.
The Christian Council should first appreciate the fact that petroleum revenue is highly regulated in terms of disbursement and investment. About 70% of petroleum revenue is expected to be spent to finance the budget annually and 21% as support for the economy (stabilization fund) and only 9% in the heritage fund as an endowment for the future. We technically have at our disposal 91% of petroleum revenue if we decide to use the stabilization fund as done severally including 2020. Why join the call to use the only 9% heritage fund? The Christian Council should actually be calling for consolidated accountability of the use of petroleum revenue since 2011.
The other issue that the Christian Council should appreciate is that the Petroleum Revenue Management Act does not permit the use of the heritage fund until after fifteen (15)years from 2011. However, the law allows for parliamentary resolution after 2026 to use part of the accumulated interest on the heritage fund to finance development infrastructure. Any suggestion to use the heritage fund is illegal and not acceptable. Act 815 simply does not allow such calls.
The heritage fund and the stabilization fund serve as a fiscal buffer for the economy and as part of the international reserve of the economy. The suggestion means depletion of the international reserves which may undermine the performance of the currency.
It is, however, important to start a healthy debate about splitting the investment of the heritage fund into investment in fixed income securities outside the country and investment in strategic self-financing infrastructure in Ghana. It could be 40% investment in Ghana and 60% outside Ghana which still preserves and contributes to the reserves.
