This week, Ghanaians have been discussing an announcement by the government that free Senior High school education will begin in September of 2017. The debate has largely been whether it should be free for all or that government must employ “targeting”, meaning only those who can’t genuinely pay for secondary education must be sponsored. “By free SHS we mean that in addition to tuition which is already free, there will be no admission fee, no library fee, no science centre fee, no computer lab fee, no examination fee, and no utility fee; there will be free text books, free boarding and free meals, and day students will get a meal at school for free.” President Akufo-Addo said. Just before that debate settles, senior minister Osafo Marfo has hinted that the government may want to finance the free education policy with a portion of Ghana’ oil revenue being kept for future generation. So, who are the future generation?
Merriam-Webster’s dictionary defines future generation as the average span of time between the birth of parents and their children, so roughly we are looking at 30 years.
Ghana passed the Petroleum Revenue Management Act, 2011 (Act 815) as amended by Act 893 into law in 2011. Literally speaking, those who qualify as the future generation will be any person born immediately after the bill was passed into law up to say 2041.
This is logic. But what does the law say?
Section 10 (2) of Act 815 provides;
“The object the Ghana Heritage Fund is to;
(a) provide an endowment to support the development for future generations when the petroleum reserves have depleted; and
(b) receive excess petroleum revenue.”
Now, section 10 (4), may interest you. It provides that;
“Despite section 20, Parliament may by a resolution supported by the votes of a majority of members of Parliament at intervals of fifteen years from the date of commencement of this Act, review the restriction on transfers from the Ghana Heritage Fund and authorise a transfer of a portion of the accrued interest on the Ghana Heritage Fund into any other fund established by or under this Act”.
Section 20 then states that;
“Within one year after petroleum reserves are depleted, the moneys held in both the Ghana Stabilization Fund and Ghana Heritage Fund shall be consolidated into a single Fund to be known as the Ghana Petroleum Wealth Fund after which the Ghana Stabilization Fund and the Ghana Heritage Fund shall cease to exist”.
From the law, it is clear that the framers intended the heritage fund to operationalize ONLY after depletion of the petroleum reserves-more like an annuity.
How long will Ghana’s oil reserves last? 30 years? 40 years?
The then presidential candidate of the New Patriotic Party-NPP and now President, Nana Akufo-Addo on Thursday 3rd February, 2011 made the following statement in reaction to suggestions by the then ruling NDC to collateralised the oil revenue. He noted;
“Ninth, the party supports the establishment of a Heritage Fund as proposed in the bill and encourages Parliament to provide the necessary precautions to ensure that its value is not eroded over time. It is important to remind ourselves that the principle underpinning the creation of a Heritage Fund is to provide for future generations whereas the principle of collateralisation is to “make hay while the sun shines” or “to have your lunch and dinner at breakfast”. The two concepts are diametrically opposed. We believe that whatever resource we have as a nation should be sustainably utilised to allow future generations also to benefit.”
President Akufo-Addo succinctly laid down the underlying principle behind the heritage fund which is to allow future generation to benefit.
But, three years after the law came into operation, some Ghanaians thought that, it was an unwise decision to set funds aside for persons yet unborn-when the current generation who will “produce” the future are suffering.
The lead proponent was the General Secretary of the opposition NDC, Johnson Asiedu Nketia. A citi fm news portal in May 2014 read “Let’s ‘chop’ Heritage Fund now – Gen Mosquito”. Mr. Asiedu Nketia suggested that the government can ease the economic plight of Ghanaians if it begins utilizing the fund. “In this current situation that we find ourselves in, it doesn’t make economic sense to be keeping any money called Heritage Funds,” he explained.
He was sharply criticised for daring to suggest this. May be legitimately so. The fear the funds could be misappropriated was suggested by president of IMANI, Frankline Cudjoe. A Facebook post of Mr. Cudjoe read “Actually, I agree with the NDC general secretary on the suggestion that we use our heritage oil fund to fix infrastructure gaps, something IMANI advised government to do 4 years ago, but will I trust the government to use the heritage fund prudently? Not in the face of how flagrantly it has abused the other oil receipts,” he pointed out.
Although some NPP members disagreed with Mr. Asiedu Nketia, the literature by some heavy weights in parliament suggested the contrary.
The minister for Planning for instance, was of the opinion that Ghana should not have established the heritage fund all together-“when you have a deficit in development…you don’t go and put some money, stash it in an account somewhere… and bureaucrats actually feed on that money. And when 30 years down the road, you go and then tell your grandson or your children that I have some money sitting in some account for you. Then they will ask you; ‘are you stupid?’ And you didn’t use that money to build the roads for us, you didn’t educate us…”
He went further to accuse the NDC of a cut and paste law which had “fallen flat on their face”. He was of the view that changing the law which had not stood the test of time was unwise, as “its utility is destroyed from the word go”, he noted.
Another stalwart, Dr. Anthony Akoto Osei, minister for Monitoring, in 2014 also spoke against the state turning its attention to the Heritage Fund. He suggested, the government should rather deal with corruption and will have enough money at its disposal.
Today, these two ministers must be in cabinet. It’s interesting to know what they make of the suggestion to turn to the heritage fund. It is even more interesting to know what President Akufo Addo makes of his stance in 2011.
When Asiedu Nketia first raised this issue, the sense was about whether we trust government to make judicious use of the funds in building infrastructure and fixing the economy, however small it is!
Do we still think that way now?
Do we think that funding education instead of say build roads is a more prudent way to use the fund?
The now, the future debate reminds me of Ghana’s pre- independence struggle- a clash of slogans – the CPP’s radical “Self-government now!” against the UGCC’s conservative “Self-government within the shortest possible time.” In the end, the NOW won.
Ironically, the descendants of J.B. Danquah who now champion NOW, and that of Kwame Nkrumah, who wants the future.