The Finance Minister, Seth Terkper, has noted that the economy will be the greater beneficiary if more state institutions follow suit in breaking away from government’s subvention.
Government is set to wean off some institutions early next year as part of on-going fiscal consolidation efforts, and is also assessing the feasibility of withdrawing support from some more.
The Driver and Vehicle Licencing Authority (DVLA), the Environmental Protection Agency (EPA), Energy Commission, Data Protection Commission, Gaming Commission, and the Securities and Exchange Commission — which requested on their own to be taken off government’s support — are on the verge of being weaned off the state’s budget by first-quarter of 2016.
The institutions are expected to take care of their own remunerations, development expenditure, goods and services expenditure, and other operational costs.
“They will be allowed to retain part of their income to meet this expenditure, similarly to state-owned enterprises, and more institutions will be encouraged to follow those lines.
“The policy is for the healthy ones who generate revenue to be on their own,” Terkper said.
The withdrawal of government subvention to the institutions is seen as a major decision that will allow the state to save millions of cedis in wages and salaries, as well as goods and services.
He lauded institutions such as the Driver and Vehicle Licensing Authority (DVLA), which Terkper says are contributing to the budget — adding that government will allow them to retain part of their IGF.
The Finance Minister also pointed out that the four institutions have been assessed, and government is convinced they are capable of taking care of their own expenditure.
Weaning-off, the Finance Minister, explained, occurs in three ways: when some institutions can pay for their entire salary from the income generated, and pay for recurrent expenditures as well as others catering for entire expenditure — such as wages, goods and services and capital infrastructure.
Mr. Terkper added that government is also considering weaning-off some institutions in the near future, or at least providing guidelines for the utilisation of their internally-generated funds (IGF).
Those institutions include teaching hospitals, tertiary education institutions, the Forestry Commission, Minerals Commission, Ghana Broadcasting Corporation, Ghana Investment Promotion Council, Ghana Standards Authority, and the Food and Drugs Authority.
With the new organisation, the gross internally generated fund (IGF) is lodged into the consolidated fund; after which a transfer of the IGF retainable by the institution is made to it by government.
The objective is to improve efficiency in the use of IGF by removing its utilisation from the sole discretion of state institutions.