ABSTRACT
The study on the financial effect of road fund had to be conducted because of the problem of limited attention and literature committed towards this aspect of research in Ghana’s knowledge space. Following this problem the current study investigated financial effects of Ghana road fund misappropriation in the Ghana Highway Authority. The specific objectives include; to help identify the causes of the misappropriation funds to projects by the road agencies, to run a comparative analyses of funding road developmental projects as against road rehabilitation projects, to assess the effect of funds misappropriation within the road construction sector of Ghana.
The study adopted the quantitative method of research. The study used descriptive and cross sectional designs. The data was sampled from staff, consultants and contractors from the Ghana Highway Authority. All together 35 responses were gathered. The instrument used for data gathering is well-structured questionnaire as well as an annual report spanning 2015-2018. The study was concluded based on the key objectives outlined in this study. The study therefore concludes that the causes of the misappropriation of road funds include the delays in monthly payment of vital projects, Inflation rates, Project disputes/project litigation, schedule completion slippage and government interference. In comparing developmental projects to rehabilitation road projects respondents indicated that the later was less expensive- over GHS 99,135,117.27 was lost through developmental projects alone. Also government role in misappropriating road funds can lead to corruption.
CHAPTER ONE INTRODUCTION
Background of study
Good Roads are an essential part of any developing economy. Well advanced countries all over the world have invested heavily on road infrastructure. Well advancing African countries such as Rwanda and South Africa have all invested heavily in road development and rehabilitation. A country’s economic development and national integration depends on the level of development of its road infrastructure. The level of development of the road infrastructure undeniably affects the efficiency of movement of goods and services.
Following post-independence, the government’s budgetary allocation for road maintenance could not be sustained and the nation’s road network started to deteriorate rapidly. Efforts made to increase normal budgetary allocations failed to provide adequate funds to clear the increasing backlog of road maintenance works.
In recognition of this, the government under the Provisional National Defense Council (PNDC) established the Ghana Road fund in 1985 to serve as the source of funding for the maintenance of all roads in the country. The Ministry of Finance, Ministry of Roads and Highways and the Controller and Accountant General jointly administered the Fund up until January 1997. These government institutions made allocations from the Fund to the Road Agencies i.e. Ghana Highway Authority (GHA), Department of Feeder Roads (DFR) and the Department of Urban Roads (DUR) for the maintenance of roads.
First and foremost, Ghana Highway Authority is charged with the responsibility for the administration, planning, control, development and maintenance of trunk roads, ferries and related facilities in the country. Whereas the Department of Feeder Roads is charged with the
responsibility for the administration, planning, control, development and maintenance of feeder roads and related facilities in the country. Last but not least, the Department of Urban Roads is charged with the responsibility for the administration, planning, control, development and maintenance of urban roads and related facilities in the country (MoRH, 2017).
As a result of these government agencies competing for limited funds, restructuring plan of the need for Fund to establish a suitable management system became absolutely necessary. Following the difficulties allocation of funds for road maintenance projects. Consequently, in September 1997, the Ghana Road Fund Act (Act 536) was signed by the President unto the statute books of the country. This Act, provides the basis for the establishment of the Road Fund Board, the management and utilization of the Fund and the general financial provisions for the maintenance of roads in the country.
As a developing country, sustainable funding for road maintenance has proved to be difficult over the past years. Many developing countries manage a road systems which are larger than they can afford (Boamah, 2002). Thus it is not surprising that the sustainability of the Fund as a secure source of road maintenance is in danger due to the huge arrears overhang on the Fund (Nketiah, 2009).
Problem statement
In Ghana, road construction projects are classified as either Rehabilitation or Developmental Projects. Developmental Road Projects involve the construction or upgrading of new or existing roads so as to increase capacity. Road Rehabilitation Projects involves the intervention that reduces the rate of road pavement deterioration (Boamah, 2002). This includes the improvement
of an unpaved or paved road including widening, earthworks and construction of drainage structures for as to provide traffic accessibility to road users in an efficient and safe way.
These rehabilitation projects are undertaken by the respective road agencies and submitted to the road fund for funding consideration. With no established guidelines, fund allocation is not transparent and constantly subjected to political and administrative manipulation in which funds required for road maintenance are used for developmental projects leading to the distress of the Fund (Boamah, 2002). Ghana annually requires not less than $2.5 billion for road infrastructure for the next ten years in order to close the current infrastructure gap (Brushett, 2005). However, comparing this huge financial requirement to that of the current balance sheet of the road fund, it is less likely that the current situation will improve as a result of the misappropriation. This study sought to evaluate the financial implications of the misappropriation of the road fund on existing roads maintained by the Ghana Highway Authority.
Objectives of the study
Main Objective
The overall objective of this study is to evaluate the financial implications of the misappropriation of funds for road maintenance projects by the Ghana Highway Authority and its financial effect on the fund.
Specific objectives
The study specifically seeks:
- To help identify the causes of road fund misappropriation
- To run a comparative analyses of funding road developmental projects as against road rehabilitation projects.
- To assess the effect of funds misappropriation within the road construction sector of Ghana.
Research questions
- What are the causes of the misappropriation funds to projects by the road agencies?
- How are the funding of road developmental projects comparable to road rehabilitation projects?
- What are the effects of funds misappropriation within the road construction sector of Ghana?
