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05 July 2017

Road Fund ‘drained’; no money to fund new projects

The Road Fund is virtually empty as a Deputy Minister of Roads, Kwabena Owusu Aduomi has stated, the Ministry may not be able fund new road projects since the money in the account is not enough. 

There have been calls for government to move in and rehabilitate deteriorating roads with some communities staging demonstrations, but Mr Aduomi said there was not enough funds in the Road Fund.

He told Citi FM, the money could not cater for ongoing projects.

Deputy Minister of Roads, Kwabena Owusu Aduomi

“The Ministry secured a loan of GHc1.2 billion from UBA. The repayment is such that every quarter, the Ghana road fund has to pay GHc206 million. Our projection is that for every quarter the fuel levy provides about GHc240 million to the fund so when you take 206 from 240, then we are left with about 34. 

“So it means that less than GHc40 million every quarter that the road fund will get to finance road projects. So the predicament is that we will not get enough funds to pay for all numerous ongoing projects,” he added.

According to him, the situation has been worsened by the former government’s decision to award numerous road contracts in the last quarter of its administration.

“The GHc600 million that he [the former road minister] said was in the fund, before he left office he approved project payments of over GHc300 million,” Mr. Aduomi said

BACKGROUND

The Ghana Road Fund was established in 1985 to provide a secure source of funding for preservation of Ghana’s road network. The Fund was restructured under the Road Fund Act, Act 536, 1997. The Act provided for the Road Fund Management Board to provide the general overall direction for the Fund.

SOURCES OF REVENUE

The sources of revenue into the Fund are derived from the following sources:

  1. such proportion of government levy on petrol, diesel and refined fuel oil as may be determined by the Cabinet with the approval of Parliament;
  2. bridge, ferry and road tolls collected by the Authority;
  3. vehicle License and inspection fees;
  4. international transit fees, collected from foreign vehicles entering the country; and
  5. Such monies as the Minister responsible for Finance in consultation with the Minister may determine with the approval of Parliament.

Monies are collected by various agencies of state and portions due the Road Fund are channeled into the Road Fund accounts established for the purpose. Fuel levy and international transit fees are collected by the Customs Excise and Preventive Service (CEPS) of the Ghana Revenue Authority (GRA). Bridge, ferry and road tolls are collected by GHA, while vehicle license and inspection fees are collected by the DVLA

In addition the Secretariat has other accounts for its internal operations.

THE ROAD FUND SECRETARIAT  

Under the Act, the Chief Director of the Ministry of Roads and Highways act as secretary to the Fund and is responsible for the day-to-day management of the Fund.

Ing. Francis D. Ahlidza. (Road Fund Coordinator)

A Road Fund Coordinator is appointed by the Chief Director to coordinate the activities of the Secretariat. The core functions of the Road Fund Coordinator is to serve as a liaison between the Chief Director and the Secretariat for the day-to-day management of the Secretariat and supervise the activities of the staff at the Secretariat.

FUNCTIONS OF THE SECRETARIAT

The functions of the Secretariat are to carry out the directives of the Board under the directions of the Chief Director. The functions of the Board are enshrined in article 6 of the Road Fund Act which are listed below:

  1. Arrange for the collection of monies assigned to the Fund;
  2. Identify other sources of funding;
  3. Co-ordinate and ensure total and timely accountability of the Fund;
  4. Recommend to the Cabinet after consultation with the Minister for Finance the level of the road levy and other road user charges that shall be paid into the Fund;
  5. Improve arrangements for the collection of road user charges by the Minister or agents assigned for the purpose;
  6. Prepare and publish procedures for the disbursement of the Fund)
  7. Determine the certification necessary to ensure that work is completed according to specification;
  8. review the annual expenditure programmes of the road implementing departments and bodies;
  9. determine how much of the financing of the expenditure programmes of the road agencies should come from the Fund, taking into consideration any cost-sharing formula there may be; and

Perform such other functions as may be incidental to its functions under this Act.

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