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MINORITY CAUCUS’ POSITION ON THE GHANA GOVT’S US$156 MILLION IDA LOAN FOR SENIOR HIGH SCHOOL PROJECT
7th July 2014
Ladies and gentlemen, last week Wednesday, the New Patriotic Party in Parliament voted against the US$156 million International Development Association (IDA) loan that government submitted for parliamentary approval.
The NPP will support any initiative or project that improves secondary education and churns out quality products for further education. Our record on the provision of fee-free quality secondary education speaks for itself, and we are proud of that.
What we cannot be proud of is the unfortunate attempt by the Mahama administration to use secondary education as an excuse to misappropriate public funds. The NPP minority caucus opposed and continues to oppose the said loan for the following reasons:
TOO MUCH BORROWING
1. Whilst we acknowledge that as a nation we may need to take loans for very important programs and projects we must take cognisance of the fact that the servicing of loans is very much negatively impacting on the national treasury. As we speak today the nation requires a colossal amount of about GH¢8.4billion to service loans for the year 2014. That is why as a nation we should be circumspect in the contracting of loans. Loans are not grants or gifts. The nation will be required to pay and service them before the repayment date is due. In this regard the nation should have the best value for money for any loan contracted.
2. POOR VALUE FOR MONEY
In the 2014 Budget Statement, government budgeted for and got approval to construct 50 senior high schools in 2014 at a unit cost of GH¢4.4million. In this IDA project however, the same NDC government is seeking to construct the same kind of senior high schools at a unit cost of US$4.3million, the equivalent of GH¢13.76million.
Ladies and gentlemen, this is the extent of the fraud we have on our hands as a country. It is shameful, but the government and its majority in Parliament are unable to explain this irregularity. The belated explanation (obviously an after-thought) that has come from a deputy minister for education (Mr Okudzeto Ablakwa) is that the new schools will come with teachers’ flats. One hopes that the thrust of Okudzeto Ablakwa’s justification is not that what is provided for in the budget and for which the President went to cut a sod to commission its construction does not have a teachers flat component.
3. FRAUDULENT SCHOLARSHIP SCHEME
We are told, ladies and gentlemen, that US$15.6 million (the equivalent of GH¢50 million) of the loan will be used to run a scholarship scheme for some 10,400 senior high students for just 3 years. Over these three years, the money will cater for pencils, notebooks, sandals, sanitary pads, etc of the beneficiaries. It is strange to recollect that last Friday Mr. Okudzeto Ablakwa stated on Peace FM that the scholarship scheme will last between 2014 and 2019. That is patented untruth. The scheme is for 3 years.
The question is, after the 3 years when the loan amount is exhausted, what happens? After the 3 years, how will government get the money to sustain this new expenditure? Already, the Mahama administration is unable to provide for students who are already on government scholarship. This initiative is completely and disturbingly unsustainable. It is obvious that the real motive of government is something else. Otherwise, how can a government take a loan to run a 3-year scholarship programme for only 10,400 senior high school students? The provision of the 200 new Senior High Schools is to provide opportunity to people who otherwise would not have the opportunity. The scholarship that is being designed is in respect of the facility to construct the 23 new schools.
How is the nation going to provide for the students in the other 177 new schools? Thus far there is no indication that students in the 177 other schools would benefit from a similar scholarship scheme. In the event, what is the justification for that.
4. PARALLEL SCHOLARSHIP SECRETARIAT
On this new scholarship scheme government has indicated to create another scholarship secretariat, completely independent of the Ghana National Scholarship Secretariat, to manage this transient scholarship programme.
At the moment, the staff at the Scholarship Secretariat have very little work to do because government cannot provide them with funds to administer to students on state scholarship. But we pay their salaries every month. Their salaries are part of the wage bill on which the Mahama government has blamed all the problems of this country. So, how can government justify the use of a parallel scholarship secretariat to run this transient scholarship programme for just 10,400 senior high students for a period of 3 years?
There is no justification for this irresponsible misuse of public funds. Government is pursuing this create, loot and share agenda to put state resources into the pockets of their cronies and party foot soldiers.
5. PROBLEMS AT THE BASIC LEVEL
We recall President Mahama telling this country that fee-free senior high education was unreasonable unless the resource problems at the basic school level were addressed. As we speak today, teachers at many of our basic schools cannot get chalk to teach pupils because government cannot provide the funds for it. The capitation grant is in arrears for almost a year. The school feeding grant is in arrears for more than a year in many districts; the list is endless.
Yet, the hypocrisy of this administration has no difficulty bypassing all these problems at the basic school level to cater for school uniforms, sandals and sanitary pads for students in senior high school.
6. GH¢51 MILLION FOR MONITORING AND EVALUATION
Ladies and gentlemen, perhaps the most shocking part of this dubious project is the allocation of US$15.9 million, the equivalent of GH¢51 million, to “research, monitoring and evaluation”. The deputy minister for education has hinted that 40% of this amount will go to “supervising consultants”. Do we not have outfits at the ministry of education that monitors and supervises the provision of educational infrastructure? Is this the way to build the capacity of our educational institutions? Obviously no. It is all a dishonest strategy to create avenues to siphon public funds. Pure and simple.
Clearly, this allocation for the so-called monitoring and evaluation could have, even at the inflated figures by government, built about 4 additional senior high schools. Again, per their own figures for upgrading and expanding the capacity of schools, this money could upgrade 132 existing secondary schools or could expand the capacity of 50 additional senior high schools.
Unfortunately, the US$15.9 million or GH¢51 million or ¢510 billion would not do any of these but is rather going into the wrong private pockets.
THE ROLE OF THE WORLD BANK
It is not clear what kind of discussions have happened between the Mahama administration and the World Bank the lender of this facility. This is a loan to be repaid by Ghanaians. The World Bank, of which Ghana is a member, has the responsibility to ensure that loans that member countries contract are contracted in accordance with good governance practices.
Is it reasonable to the World Bank that a government should take a loan, even if at concessionary re-payment rate, to finance recurrent expenditures such as the purchase of sandals, pencils and sanitary pads for a very limited number of senior high students over a limited period of 3 years?
Is the Bank satisfied with the sustainability consideration of this project? Is it satisfied with the use of substantial portions of the facility for setting up parallel institutions for the purpose of this programme? We urge the World Bank to re-look at this project and bring good governance considerations to bear. This is important for the Bank’s credibility.
This project, as it stands, is bad. We believe that an important initiative to improve senior high education is being contaminated by the greed and illegitimate interests of people in government. For the sake of the national interest, this must be stopped.
We thank you for your attention.