Adnan Adams Mohammed
Ghana’s receipt into its Petroleum Holding Fund (PHF) significantly reduced by 25.65 percent in 2023 as against 2022 receipts to record US$1,06 million.
The receipts was made of Carried and Participating Interest (CAPI) which contributed 44.31 percent, followed by Corporate Income Tax (CIT) and Royalties with 34.38 percent and 20.67 percent respectively.
However, total proceeds from JOHL liftings received in 2023, amounting to US$70.46 million were not paid into the PHF for the second consecutive year. This brings the cumulative proceeds of unpaid revenue into the PHF by JOHL to US$343.11 million as at end of 2023 as contained in the PIAC 2023 report.
These were as result of crude oil production decline for the fourth consecutive year in 2023. Production dropped from a high of 71.44 million barrels in 2019 to 48.25 million barrels in 2023 representing an annual average decline of 9.2 percent.
“PIAC reiterates its position that proceeds from liftings of JOHL and other subsidiaries of GNPC constitute petroleum revenues within the meaning of Section 6(e) of the Petroleum Revenue Management Act, 2011 (Act 815) and Section 2 of the Petroleum Revenue Management (Amendment), 2015 (Act 893), and therefore must be paid into the PHF”, the report recommended.
Also, Surface Rental owed by IOCs remain high at US$2,738,365.29 as at the end of 2023. The Committee however tasked the Ghana Revenue Authority (GRA) to intensify its efforts to recover the Surface Rental arrears with the usual default penalties applied.
ALLOCATION AND UTILISATION OF PETROLEUM REVENUE
Out of the total actual petroleum receipts for the period,the statutory allocation of the PHF were; GNPC received US$245.59 million, Annual Budget Funding Amount received US$485.97 million, and the GPFs US$330.58 million.
On expiry of the Priority Areas for 2020 to 2022, new Priority Areas were selected for the utilisation of the ABFA for the period 2023 to 2025. The selection of Priority Areas every three (3) years has become necessary because of the absence of a long-term national development plan approved by Parliament.
However, PIAC observed that, since the coming into force of the PRMA in 2011, the use of the ABFA has been guided by a medium-term development strategy, without a long-term national development plan approved by Parliament.
The Committee therefore restates its recommendation that, the selection of the ABFA Priority Areas must be guided by a long-term national development plan approved by Parliament in conformity with the Act.
Meanwhile, the ABFA amount disbursed to support the Agenda 111 project was
GH¢758.98 million in 2023. This brings the total ABFA contribution to the Project to GH¢1,708.29 million, amounting to 65.24 percent of the total spending on the project, which is GH¢2.6 billion.
Additionally, allocation and disbursements of annual ABFA to the Industrialisation Priority Area has reduced from 1.15% in 2020 to 0.11% in 2023, thereby undermining the essence of prioritisation.
The Committee urges the Ministry of Finance to demonstrate the essence of prioritisation by the amount of ABFA disbursed to the Industrialisation Priority Area.
Also, an amount of US$24.30 million (GH¢270,907,662.28), representing 5 percent of the 2023 ABFA, was disbursed to the DACF in compliance with the decision of the Supreme Court of Ghana in the case of Kpodo and Another vrs Attorney General in 2019, to transfer at least 5
percent of the ABFA to the Fund.
While it is commendable that the Ministry of Finance disbursed five (5) percent of the ABFA to the DACF, the Committee urges the Ministry to ensure that subsequent disbursements to the DACF meet the minimum requirements of five (5) percent of the ABFA.
