Dr. Cassiel Ato Forson, the Minister for Finance, addressed Parliament on June 3, 2025, regarding payments to statutory funds. He emphasized the importance of fiscal decentralization and acknowledged the interest of Parliament members in this subject.
Forson began by discussing the District Assembly Common Fund (DACF), highlighting President John Dramani Mahama’s commitment to decentralized development as outlined in Chapter Twenty of the 1992 Constitution. Forson noted that Metropolitan, Municipal, and District Assemblies (MMDAs) have faced financial challenges over the past eight years due to recentralization efforts.
“Decisions taken in recent years have regrettably undermined the capacity of MMDAs to respond effectively to the pressing needs of our people at the local level,” Forson stated. He explained that only 40% to 50% of transfers were previously disbursed directly to District Assemblies.
The government under President Mahama is determined to reverse this trend by ensuring that a minimum of 80% of allocated DACF resources are transferred directly to MMDAs. This policy aims to empower assemblies and drive local economic growth.
Forson detailed that approximately GH¢6.1 billion out of GH¢7.57 billion earmarked for 2025 will be disbursed directly for local economic activities. The focus is not just on fund release but also on their utilization aligned with economic objectives.
He cited Section 126(3) of the Local Governance Act, mandating government determination of expenditure categories funded through DACF. Cabinet-approved guidelines include allocations for market construction, health facilities, educational infrastructure, potable water provision, sanitation, school furniture, administration costs, and completing legacy projects.
Forson reported transferring GHS987,965,073 from the Consolidated Fund into the DACF Account for the first quarter. The Administrator must ensure that 80% reaches assemblies directly and expenditure returns are submitted before further releases.
Under Mahama’s leadership and NDC governance, all statutory fund transfers have been timely and complete for several years. Transfers totaling GHS2,033,469,607 were made to the National Health Insurance Fund for January-March 2025.
These disbursements helped settle arrears owed by healthcare providers and implement programs like ‘Mahama Care.’ Additionally, GHS2,710,227,947 was allocated to GETFund covering January-April 2025 months.
Funding issues impacting Free Senior High School Programme implementation have been resolved under GETFund coverage as announced in the budget earlier this year.
In closing remarks encouraging continued support from Parliament members towards strengthening MMDAs’ role as engines driving local economic development within priority sectors: “I encourage Honourable Members…as we chart a new course.”