Accra, Feb. 27, GNA - Actual expenditures for basic services and income generation activities for the poor and vulnerable of the society in 2002, amounted to ?2,710.9 billion made up of ?2,535.8 billion from the government and ?175.14 billion of HIPC resources.

Presenting the government's 2003 financial statement to Parliament on Thursday, the Minister of Finance, Mr Yaw Osafo-Maafo said the amount represented 25.5 per cent of total Government Expenditure.

"By the end of the year about 75 per cent of that allocation was spent on basic human development services - primary health care, basic education and safe drinking water.

"The rest of the resources were spent on other poverty reducing activities such as employment generation, good governance, human rights, public safety, disaster management and in improving the well being of the vulnerable in the society."

Mr Osafo-Maafo said in 2002! emphasis was also placed on the creation of employment opportu nities through training in vocations and employable skills of the youth including those with disabilities and the provision of credit and food-processing machinery to women, particularly.

The Minister said Government's decision to access the Highly Indebted Poor Countries (HIPC) Initiative was taken amid much anxiety by Ghanaians.

"The decision was a bold one, but one which many people were not sure, would yield much benefit. One year on, I can positively say that as a nation, we have made gains, part of which would not have been possible without recourse to the HIPC funds."

He said total projected HIPC relief savings for 2002 for both government and government guaranteed debt was about $275.35 million (approximately ?2.22 trillion).

Out of this about $92.5million (approximately ?746.42 billion) was to be lodged in the HIPC account at Bank of Ghana and $ 182.85 million (approximately ? 1.47 trillion) to be cancelled.

"As at the end of 2002, a total amount of $57.02 million (approximately ?460.12 billion) had been lodged into the HIPC account, received mainly from World Bank, ADF/ADF and IMF." The Minister said though the HIPC Initiative was internationally driven, the process has been controlled internally and local priorities were driving the disbursement and use of funds.

Mr Osafo-Maafo said the government's programme for the use of the debt relief comprises three main elements; using a proportion of the relief for domestic debt reduction; funding projects developed by sector Ministries, Departments and Agencies for poverty reduction and growth; and funding specified projects submitted by District Assemblies. He said ?81.4 billion of the relief from HIPC had gone into reducing domestic debt thereby reduci ng pressure on Government. Disbursements made for MDAs projects under HIPC for 2002 totalled ?116.6 billion. These projects were targeted primarily at reducing poverty, generating employment and enhancing growth.

They include ?17 billion disbursed by the Ministry of Women and Children's Affairs to small businesses in agro processing, gari processing, groundnut processing involving over 15,000 women an ?18.6 billion Farmers Assistance Programme under the Office of the Senior Minister to support over 40,000 small- scale farmers across the country. Others are ?9.9 billion disbursed under the Emergency Social Relief Programme (ESRP) under the Ministry of Economic Planning and Regional Co-operation to small scale crop growers in the Northern, Central, Upper East, Upper West and Eastern Regions and ?6.12 billion provided for the completion of craftsmen's centres at Aburi, Ahwia, Bolgatanga, Kpando and Salaga under the programme of the Ministry of Trade and Industry to employ over 2,000 persons.

The rest are ?26 billion disbursed to the Community Water and Sanitation Agency for rural water projects especially in the guinea worm endemic areas and 7.8 billion disbursed by the Ministry of Energy to provide electricity to benefit 22 districts and 109 towns.

He said the allocation to Metropolitan, Municipal and District Assemblies was ?117 billion, half of which was disbursed with the remaining half currently being processed for disbursement subject to effective use of the first tranche.

The specified projects for districts were in the areas of education, health, water and sanitation. This tranche of HIPC disbursement is being managed through the Ministry of Local Government

Mr Osafo-Maafo said GPRS would emphasise on government's medium term development prior ities this year.

To implement programmes and projects more directly affecting the poor, government has allocated a total of ?4,633 billion made up of ?3,553 billion from GOG, and ?680 billion from the HIPC fund for 2003 and about ?400 billion of HIPC resources over from 2002.

The total poverty reduction allocation in 2003 excluding Donor resources is an increase over the 2002 actual expenditure and represents 29.6 per cent of total Government Expenditure.

The Finance Minister said: "The resources will be used to improve human development through increases in access to basic services in education, health and sanitation, safe water and for improvements in incomes of the poor and vulnerable of the society through employment generation and the provision of productive assets.

"Priority will also be given to the implementation o! f special programmes for the vulnerable and the excluded such as equipping kayayei and the physically challenged with employable skills, mitigating the impact of disasters on victims and protection of the rights of women and children."

The Minister said Government was, therefore, committed to ensuring that the benefits of the enhanced HIPC programme were accomplished and channelled to both poverty related and growth enhancing projects.

Mr Osafo-Maafo said the debt relief from HIPC this year would be used to support the implementation of the five Medium Term Priorities areas, which had been outlined in the Ghana Poverty Reduction Strategy (GPRS) including reducing the domestic debt.

As was the case last year, 20 per cent of the total relief would be used for domestic debt payments with the remaining proportion of the relief focused on growth! areas where the poor participate most, such as agriculture and in the informal sector.

"Government is determined to use HIPC relief as instrument to deepen its decentralization policy and will channel more funds directly to the Districts.

"To ensure proper and effective use of such resources, District Chief Executives are expected to co-ordinate their activities with sector ministry officials such as District Education, Health and Planning Officers," he said

Mr Osafo-Maafo said micro finance programmes would be expanded to ensure that even more people could engage in profitable ventures, create wealth and reduce poverty.

He said the revolving credit schemes set up in 2002 for the use of the HIPC funds would be streamlined to ensure efficiency in the use of resources.

"Additional funds for increasing access to quality education, health and sanitation will be disbursed through the Metropolitan, Municipal and District Assemblies from HIPC relief.

"It is expected that these funds will be additional to what Districts regularly plan and budget for using the District Assemblies Common Fund."

The Minister said in the education sector in particular, HIPC funds would be used to address the existing inequities between urban and rural deprived areas. Gender inequalities would also be addressed.

Work on upgrading thirty (30) senior secondary schools, in all 10 regions of the country as highlighted in the President's State of the Nation Address for 2003, would receive about ?50 billion from HIPC relief funds.

In addition, funding would also be provided to establish scholarships for bright students from deprived rural areas to gain admission into the more established schools.

The Minister said for health, funds from HIPC would support the e stablishment of the health insurance schemes and means of ensuring quality and affordable health service and coverage for the poor to enhance the delivery of health services. GNA