Adnan Adams Mohammed
The Public Interest and Accountability Committee (PIAC) wants the PRMA amended to remove the ministerial discretion in the determination of placing a cap on excess revenue accruing to the Stabilisation Fund (SF).
PIAC believes that the removal of the discretionary powers would ensure that there was enough money in the Contingency Fund to address national emergencies. Per the current law, the Minister has the power to determine how much of the excess funds go into the Contingency and Sinking Funds.
This comes after several stakeholders register their dismay with some provisions in the petroleum sector legal framework including the Minister’s discretionary power provided in the Petroleum Revenue Management Act (PRMA). This, some of the stakeholders in the energy sector think exposes the management of the petroleum sector revenue and management to political abuse of the system to the disadvantage of prudent management of state resources.
The 2019 PIAC annual report from its findings observed that, an amount of US$189.13 million was withdrawn as excess over the cap (ceiling) of US$300 million placed at the discretion of the Minister of Finance on the GSF for which the excess, was withdrawn into the Sinking Fund.
This did not sit well with the committee thereby prompting Mr Noble Wadzah, Chairman of PIAC to make the proposal for the removal of the minister’s discretionary powers provided in the PRMA when he spoke at a public forum on the management and use of Ghana’s petroleum revenues in Cape Coast last week.
The Committee further noted in its report that the accumulated net profit on the investment of the GPFs since November 2011 to the end of 2019 amounted to $65.92 million, adding that, investments were mainly in low-risk instruments with low returns.
In this regard, Mr Wadzah reiterated the Committee’s recommendation to the government to invest petroleum revenues in high yielding capital projects for maximum returns.
“After reviewing GIIF’ s investment of $30 million in KIA Terminal 3, and the subsequent returns of $5.5 million of the initial investment in three (3) years, the Committee recommends more of such investments in high-yielding capital projects. This aligns with the spending aspirations of the ABFA with respect to capital expenditure,” he said.
PIAC expressed worry about the cumulative indebtedness of Ghana National Gas Company (GNGC) and called on the Government to as a matter of urgency address its unsustainable debts.
It further urged the government to expedite action on the infrastructure requirement for gas evacuation and utilisation to avoid the huge backlog of make-up gas volumes and eventual resource waste.
PIAC is a constitutionally mandated body with oversight responsibility on the prudent use and accountability of oil revenues.
