Wednesday, 6 June 2018

Groups’ not happy with 2017 oil revenue expenditure





Image result for KEN OFORI ATTA

Adnan Adams Mohammed
Concerned groupings in the country have expressed disatisfaction with the current government’s utilization of the oil revenue meant to support the national budget, christened as Annual Budget Funding Amount (ABFA).
The ABFA is the total allocation money from the oil revenue in a proportionate form according to the stated ratios in the Petroleum Revenue Management Act to support four priority sectors of the economy. The sectors are education, agricultural, capacity building and loan amortization.
The most notable among the groupings’ raising alarm about the 2017 ABFA expenditure include the minority in parliament and the African Centre for Energy Policy (ACEP).
While, ACEP is demanding accountability on  GH¢400.9 million oil revenue that was not utilized in the 2017 budget, the Minority in Parliament is of the view that, the government is in violation of the Public Financial Management Act and the Petroleum Revenue Management Act for using oil funds for the free Senior High School policy.
According to ACEP, despite that government had GH¢733.2 million of Annual Budget Funding Amount (ABFA) to spend on the priority areas in 2017, the government spent only GH¢332.29 million but the Ministry of Finance failed to account for the unspent difference of GHc400.9 million, representing 54.6% of total ABFA disbursed.

According to the Energy Policy Think Tank, the unspent ABFA is more than enough to have funded the total budget variance of PIAC, education, health and roads and other critical infrastructure.

In an interview with Executive Director of ACEP, Benjamin Boakye, he thinks parliament failed in its oversight responsibility on the petroleum funds.

He said the outturn of receipts and expenditure of oil revenue in 2017 raises concerns about compliance with the appropriation act.

Mr Boakye stated that, the reconciliation report which was published at the end of the first quarter of 2018 is supposed to give a full account of petroleum revenues in the preceding year 2017. However in the 2017 reconciliation report, the Ministry provided an amount which was not a follow up to the 2017 report.

ACEP is, therefore, demanding that the ministry of finance immediately accounts for the whereabouts of the GH¢400.9 million of the annual budget funding amount that was unutilized in 2017, and provide a detailed reconciliation of the petroleum funds with accurate data and explanations to all discrepancies.

The Energy Policy Think Tank also wants  the Finance Ministry to seek the approval of parliament for expenditures outside the approved budget such as happened with disbursement to the Ghana Infrastructure Investment Fund (GIIF) in 2017 and the $33.3 million oil revenue disbursement towards GNPC’s share of the net Carried and Participating Interest (CAPI) in that same year.

Despite, Parliament adopting the reports of the Finance Committee on the Petroleum Funds for the 2017 fiscal year, the Minority is complaining bitterly about the misapplication of the oil funds by the current administration.

The ranking member of the Finance Committee, Cassiel Ato Forson, before the adoption of the reports, said the government, in flagrant violation of the Public Financial Management Act and the Petroleum Revenue Management Act, had diverted oil funds into its free Senior High School policy.

According to the ranking member, the Public Financial Management Act states that 70 percent of the oil money should be channeled into the Annual Budget Funding Amount (ABFA) while 70% of the ABFA must be used for improvement in physical infrastructure.

He said instead of the amount of the ABFA being used to improve physical infrastructure, it’s being used to finance the government’s free Senior High School (SHS).

He said out of the GH¢202 million meant for development of physical infrastructure, GH¢196 million has been used to finance the government’s free SHS policy.

The ranking member said all the oil money would be diverted into funding of the free SHS to the neglect of the other sectors of the economy, especially physical infrastructure.

He said that the minority will seek a court action to compel the Finance Minister to do the right thing in applying the oil resources of country.

Presenting the Finance Committee’s report, the Vice Chairman of the committee, Kwabena Amankwah-Asiamah, said from January, 2017 to September, 2017 the total petroleum receipts was $362.58 million, equivalent to GH¢1.55 billion.

He said out of the amount realized, $126.67 million was allocated to the Ghana National Petroleum Fund while $217 million went to the Annual Budget Funding Amount

He said the total net profit on the Ghana Petroleum Funds (GPFs) for the period January to September, 2017 amounted to $7.03 million while GH¢29.2 million was transferred to the Ghana Infrastructure Investment Fund (GIIF).

He said exploratory works undertaken by the GNPC in the Volta Basin for more oil was on course and that 2D seismic acquisitions and geo-chemical explorations have already begun.

0 comments: