Why budgeting for climate, disaster in 2020 budget is important

Why budgeting for climate, disaster in 2020 budget is important
Source: Ghana | Norvan Acquah-Hayford | norvan986@gmail.com
Date: 02-04-2019 Time: 07:04:23:pm

Should the Minister of Finance Ken Ofori – Atta allocate funds to pay for premiums which should insure Ghana against any climate and disaster in the 2020 budget, considering the financial constraint we find ourselves as a nation?

The answer to this question is a BIG YES. 

You may agree or disagree with me, especially for those economists and financial experts, you will remind me that hey Norvan, do you remember that we just exited an IMF programme which saw a freeze on employment and restricted government spending? This had an impact even on infrastructural development like building roads, schools, hospitals and other social amenities that you and I needed badly.

So you wish to remind me that, the talk of town and warning we were given by the IMF was to ensure that we don’t go on a spending spree, which means the 2020 budget must be tight and being an election year, government must take a cue from 2004 when the government of President John Agyekum Kuffour made sure that they stayed with budget but same cannot be said of subsequent election years like 2008, 2012 and 2016. 

Since the world and especially our development partners will be watching closely how the Finance Minister will ensure prudent spending, it means we must get our priorities right by investing in the right projects.

But climate and disaster management cannot be ruled out of the equation considering the threat it presents to us here in Ghana. Just to remind you that though Ghana is far away from the major earthquake zones of the world, it is prone to earthquake disaster. In recent times people living along earthquake-prone areas within the country, have been urged to evacuate these areas due to the tremors that have hit the place.

Need I remind again that, the last two decades, there have been many high profile disasters, including the June 3, 2015, fire disaster which took place at the Kwame Nkrumah Circle after few hours of rain which took the lives of hundreds of citizens, we can also talk of the May 09, 2001 stadium disaster in which 126 football fans died, the June flood in 2006 which resulted in 23 deaths and the incidence of commercial fires which have become a daily occurrence. 

As for food insecurity due to the outbreak of one or another disease that has attacked farms, there is many to talk about from the cocoa a cash crop we grow to the vegetable we grow not forgetting lack of rain or draught that hit parts of the north.

All the above unforeseen disasters which are a result of human activities which has led to climate change when it hits a nation throws its budget out of gear. This is because that nation will have to find money elsewhere to deal with the situation or end up going with a cup in hand to beg others to help deal with these disasters.

Such catastrophes affect society and the economy significantly takes the hit, because in some situation even infrastructure is destroyed and this has become a great concern for civil society as well as the governments within the African continent.

But the question has been how they find the money to deal with this disaster which has a greater consequence on the economy because the government will have to immediately find the money which is unbudgeted to solve the challenges the disaster presents.

This is why I think Ghana ratifying African Risk Capacity (ARC), in 2016 was important.

This has culminated into the country signing on to the renewal agreement insurance pool with the African Risk Capacity, to improve responses to extreme weather outcomes and natural disasters.

This is because over the years, what I have observed is a paradigm shift in the theory and practice of disaster management from a response approach to a more proactive attitude, with the understanding that disasters are more related to the vulnerability of the people, which has its genesis in the development patterns pursued. This moving it away from treating it as one-time events without consideration of the social and developmental aspects. 

It is now about the preparedness, with an emphasis on ‘contingency planning’ and relief supplies and is sure that is why the National Disaster Management Organization (NADMO) under the Ministry of the Interior was established by ACT 517 of 1996 with the responsibility to manage disasters and similar emergencies in the country.

But have there ever been adequately prepared and well-resourced to deal with disasters in any form that hit our nation? 

The obvious answer in my head is a BIG NO? 

It then leaves you and me with the question of how is Ghana going to deal with any disaster in whichever form that it will take when it hits us.

Need I remind of Ebola that it the Congo and Liberia was also badly hit. We only thank God that Ghana was not affected. I can imagine if that happened in Ghana what we will have done. Again the most recent issue which the world is still talking about is the many of lives that have been lost with close to two million people displaced and affected in three African countries being Malawi, Zimbabwe and Mozambique, the country which was the hardest hit with Cyclone Idai. These countries experienced severe rainfall, flooding, and damage from the high wind speed in a storm.

In fact, the effects of the cyclone were felt as far south as South Africa and introduced rolling blackouts due to damaged transmission lines that supply the country with 1100 MW of power from Cahora Bassa in northern Mozambique JoyBusiness understands.

The above the famine and other diseases and epidemics that has hit parts of the continent calls for action in the areas, on the continent and especially in our own nation Ghana.

If the same thing ever happens in our country then towns and major road infrastructure in the Volta region, towns around Cape Coast, Elmina in the Central Region, and Sekondi-Takoradi in the Western Region who are along the sea will be washed away. 

So how prepared are we to deal with such disasters which imminent due to human activities both home and abroad are imminent anyway.

I can understand the government of Ghana and leaders on the continent who are struggling to meet revenue targets but have a lot to do which leads many of them having a huge deficit of their budget. In Ghana today, the government is expected to record a budget deficit of 4.3% in 2019. 

But we must recognise that climate change is here due to our own activities and disaster is inevitable. 

This is the reason why Mr. Ofori-Atta must not hesitate at all to allocate funds or I will say budget for the future uncertainty of the nation by taking insurance against disasters that will hit Ghana. In any case every year Ghana is hit with one disaster or the other.

Being a business minded person that came from the private sector and actually is a shareholder of an insurance firm like the Enterprise Group Ltd I don’t have to say much to convince you. I also wish to remind him that with insurance penetration hovering just a little above 2%, the government must be seen to lead the way in this regard.

In prudent accounting practice, it will be better to ensure ourselves against the future than to always adopt the fire fighting approach to dealing with disasters that it the nation.

I’m sure by now, you are convinced that we need to as a matter of urgency begin to take sovereign insurance which can be funds that we can fall on when disaster comes.

Let me quickly say that when it comes to tackling climate change to prevent the impacts it causes in the different systems of the planet when disaster strikes, the human being applies two types of measures: mitigation and adaptation. 

Mitigation measures are those actions that are taken to reduce and curb greenhouse gas emissions, while adaptation measures are based on reducing vulnerability to the effects of climate change.

And that was what got the African leaders to form the African Risk Capacity (ARC) which provides index insurance against droughts and other forms of disasters to African Union member states.  It has as a distinctive feature of participating governments having to prepare contingency plans prior to taking out insurance.

At the workshop on reporting on Climate & Disaster Risk Financing in Addis Ababa, Ethiopia which was to strengthen the media’s awareness on climate-induced risks and natural disasters, I got convinced that Ghana indeed was not actually prepared towards disasters. 

But how do we get there, it is the ARH which we have to move away from just paperwork like signing MOU’s but budget come 2020 onwards to pay these premiums which will then free the fiscal space for the government when disaster strikes at us. This means in exactly two weeks of a disaster Ghana can have funds paid to us to rebuild affected lives and infrastructure that has been destroyed.

I’m saying this because I’m aware that there is an agreement with the ARC to pave the way for the country to purchase sovereign insurance also for smallholder farmers in parts of the country, including some part of Northern Ghana and also some parts of the former Brong Ahafo Region which are hit by drought and flooding when the Bagre dam is opened in Burkina Faso, a yearly ritual.

It will also allow the government to benefit from the capacity building which will include assessing the right data in the area of early warnings of a disaster which will hit the nation through training of NADMO, the Metrological Agency and other allied agencies. 

This is done through the countries being introduced to new software which picks data using satellite which has been installed to be analysed and ensuring that governments ensure that they build resilient cities as they undertake massive infrastructure development.

Resilient cities because if we look at Japan, a country that is hit with floods and earthquakes over the years have been able to withstand these shocks as buildings and road networks are not wiped out as in the case of Malawi, Zimbabwe and Mozambique.

In view of this, I look forward to the government going beyond the signing the MOU to protect the citizens but committing to making funds available in the 2020 budget to pay the premiums for the purchase of the sovereign insurance from the ARC which will place the nation in a better position to deal with disasters when we are hit, no matter the form it takes.

At least am also aware of the African Risk Capacity and the African Development Bank have partnered to strengthen African countries struggling with climate disasters by making some funds available to cover 50% of the premium a nation like Ghana is expected to pay at least for the next four years.

I therefore will hold you Mr. Ken Ofori Atta to the commitment to have signed on to the renewal agreement with the African Risk Capacity (ARC), a specialised agency of the African Union (AU), to improve responses to extreme weather outcomes and natural disasters with a budget line item that will make the government share of the premium available to the ARC come November this year when you present the 2020 budget to parliament.

I’m sure if it was possible I would have been even happier to see you slot something in when you go for the mid-year budget review in June in parliament but I can understand the constraints you find yourself in.

I rest my case.

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