Babgin unamused about Northern Development Fund

By Ebenezer Hanson

The Minority Leader, Hon. Alban S.K. Bagbin, says although the Northern Ghana Development Fund as announced in the 2008 Budget Statement is a welcome news, the money allocated is grossly inadequate and government must show more commitment to developing the three Northern Regions than this piecemeal approach.

“ Northern Ghana consists of three regions, the Northern, Upper East and Upper West Regions and considering the extent of underdevelopment in these three regions, the 250 billion cedis is woefully inadequate for any meaningful work,” Hon. Bagbin was giving his views on the 2008 Budget in an interview with the Public Agenda in Parliament last Thursday.


He described the budget as propaganda spin without substance and that the Finance Minister, Hon. Kwadwo Baah-Wiredu, was just playing to the gallery. “Look at the number of times he used the expression “a brighter future budget”, it was about ten times; meanwhile the budget did not offer any hope for the future ”.


The 2008 Budget unveils a Special Initiative on Sustainable Development of Northern Ghana. Government has earmarked 250 billion cedis (GH cedis 25.0 million) as seed money for the establishment of a Northern Ghana Development Fund, and it encouraging Development Partners to contribute to the Fund.

Explaining the rationale for the Fund during the presentation of the budget, Hon. Baah-Wiredu observed, “the development gap Northern Ghana and Southern has been a long historical process dating back from the colonial era. The recent floods that affected most of the North have exacerbated the gap.

“ Government of Ghana is preparing a medium to long-term development strategy that will transform the economy and society of Northern Ghana, in a
manner that will ensure that effective utilization of the region’s competitive advantage in food production, adding value to agro-processing, boosting private sector confidence and improving incomes and general living conditions.”

Hon. Mahama Yariga, MP for Bawku Central, also shared the similar concerns. According to him, considering the staggering amounts of $45million and $20 million that have been allocated for the building of a Presidential Palace and renovation of Peduase Lodge respectively, the 25 million Ghana cedis as seed money for the Northern Ghana Development Fund tapers into insignificance.

“ I mean how does justify the higher allocation to the Presidential Palace and that of the Northern Development,” he queried.

But an NPP Standard bearer aspirant and immediate past Finance Minister, Hon. Yaw Osafo-Maafo, considers the creation of the Fund as the greatest thing that happened in this year’s budget and that the Minority got it all wrong.

“ A seed money need not be big, it is for a start. The government has recognized developmental needs of Northern Ghana and it is attacking it frontally. And don’t forget that the Government is inviting development partner to contribute. It is therefore open,” Osafo-Maafo explains.

A statement issued by the Minority on amounts allocated to works on Presidential Palace and Peduase Lodge in relation to poverty levels in Northern stated in part as follows: “ We believe that the NPP Government has gotten its priorities completely wrong. At a time when Ghana has deteriorated in the quality of life in the World Human Development Index, at a time when the GPRS review report shows a worsening trend of key indicators like maternal mortality, child malnutrition, infant mortality and incidence of guinea worm, at a time when per capita income stands at US$390, at a time when 9 out of 10 persons in the Upper east are living in poverty, 8 out of 10 live in poverty in the Upper West region, 7 out 0f 10 in the Northern Region and 6 out of 10 persons in Central Regions are in poverty, at a time when economic infrastructure projects across the country with a short term return on investment are crying for funding, we sincerely believe it is a classic case of misplaced priorities to spend over ¢270 billion on Presidential offices and Residence Complex at this time.
“ This is particularly so after an amount of ¢16 billion was spent between 2001 and 2002 on renovating the castle to make it fit and comfortable as an office and residence for the current President. After such a colossal expenditure we find it a waste for Government to declare the castle not fit for the Presidency and therefore seek to build a whole new complex at this present time. The issue of misplaced priorities is made worse by the NPP Government’s allocation of an additional ¢129 billion, to in their own words “restore Peduase Lodge to its past glory.”

Some of the targets and outlook for 2008 macro framework include a real GDP growth of at least 7 per cent; and end period inflation rate of between 6 and 8 percent; an average inflation of 7 per cent; accumulation of international reserves of the equivalence of at least three months of import cover and an overall budget deficit of 4.0 per cent of GDP.

In line with GPRS II, government’s priorities for 2008 will focus on facilitating growth and reducing poverty throu7gh major infrastructural development.

Government will fund all 166 districts to construct and tar 15kms of roads in the district over the course of the year. The criteria for selection of the roads will be developed by the end of the year so that the implementation of the programme can start at the beginning of 2008. A projected GHC 199,200,000 is allocated for this initiative. Banks and other financial institutions will be encouraged to per-finance and Government resources will be used to pay as revenue incomes in.

In addition, $200 million from the $750 million sovereign bond will be used for the road sector including the dualisation of the Accra-Kumasi highway. $90 million from the sovereign has been allocated to build the Western corridor of the railway network.

An estimated GHC 7,470,000 will be allocated to five communities in each of 166 districts for the provision of good drinking water. District Assemblies will select priority towns or villages to benefit from this initiative.

Major medium and long-term measures have been initiated and these include operationalisation of the Osagyefo Power Barge at Effasu; execution of the Bui Hydro Electric Power Project; Hemang and Awisam Hydro Electricity Power on the Pra River; Hydro Electric Power on Ankobra River; the Tanoso Hydro Electric Power on the Tano River; and the Juale Hydro River on Oti River.

US$460 million out of the sovereign bond proceeds will be spent in the energy sector with focus on the transmission and distribution network.
Government will also provide electricity to five communities in each of the 166 Districts of the country. The total budget for the electrification project is GHC613, 042,980.

GHC819, 712,980 is earmarked for the three priority projects in the 166 Districts in 2008. The private sector through Public Partnership (PPP) will be invited to collaborate with Government to achieve these goals.

Meanwhile, Parliament begins debate on the budget on Tuesday, November 27, 2007.