The Supreme Court has declared the government’s decision to cap funds allocated to the District Assembly Common Fund (DACF) as unconstitutional.
In a unanimous judgment, a seven-member panel of the court held that the inclusion of the DACF as part of the statutory funds that would be capped per the Earmarked Funds Capping and Realignment Act, 2017(Act 947) violated Article 252 Clause 2 of the 1992 Constitution.
The court presided over by the Chief Justice, Justice Sophia Akuffo, further held that Section 126 of the Local Governance Act, 2016 (Act 916) that limited the proportion of revenue due for allocation to the DACF also violated Article 252(2) of the 1992 Constitution.
“To the extent that Sections 1(2), 2(b),3(1)(b),3(5)(a),7(a), and 8 of the Earmarked Funds Capping and Realignment Act,2017(Act 947) and Section 126 of the Local Governance Act, 2016 (Act 916) purport to limit the proportion of revenue due for allocation to the District Assemblies Common Fund as established by Article 252(2) of the Constitution, the same are in the contravention of the Constitution and are hereby declared to be null and void,” the court held.
Article 252 clause 2 stipulates that Parliament shall “make allocation of not less than five percent of the revenues of Ghana to the District Assemblies for development, and the amount shall be paid into the District Assemblies Common Fund in quarterly instalments”.
The unanimous decision of the court was delivered by Justice Sophia Akuffo on June 12, 2019.
Other members on the panel were Justices Jones Doste, Paul Baffoe-Bonnie, Sule Gbadegbe, Gabriel Pwamang and Agnes Dodzie.
Earmarked funds Act
Parliament passed the Earmarked Funds Capping and Realignment Act,2017(Act 947) on March 28, 2017.
The Act provides that the earmarked funds for each financial year should be equivalent to 25 per cent of revenue.
Making a case for the Act, the Minister of Finance, Mr Ken Ofori-Atta told Parliament that the capping arrangement had become necessary to remove the rigidities in public expenditure.
He said the government was left with virtually nothing after taking out interest payments, compensation of employees and earmarked funds from revenues.
On December 27, 2017, two Members of Parliament (MP)-Mr Benjamin Komla Kpodo, the National Democratic Congress (NDC) MP for Ho Central and Mr Richard Quashigah, the NDC MP for Keta, challenged the Act and filed for constitutional interpretation at the court.
It was their case that Act 947 violated Article 252 clause 2 of the 1992 Constitution.