The Public Interest and Accountability Committee (PIAC) has called on Parliament to compel the Ministry of Finance to account for a GH?1.
5 billion unutilised funds in the Annual Budget Funding Amount (ABFA) for 2019.
The ABFA is the portion of petroleum revenues earmarked for government spending in a particular year, therefore, PIAC wants Parliament to exercise its oversight responsibility and ensure that the Ministry of Finance fully accounts for the funds.
Mr. Noble Wadzah, Chairman of PIAC disclosed this at a public forum on the management and use of Ghana’s petroleum revenue as captured in the 2019 PIAC Annual Report in Cape Coast on Tuesday.
PIAC is a statutory body, established under Section 51 of the Petroleum Revenue Management Authority (PRMA), 2011 (Act815) to monitor and evaluate compliance of the Act by government and relevant institutions in the management and use of petroleum revenues and investments.
The Chairman of PIAC said it was gradually becoming a pattern for the Ministry of Finance not to utilise, and account for some part of the ABFA.
Whereas the total ABFA for last year was around GH¢ 2.7 billion, the report said GH?1.2 billion was utilised while the remaining GH?1.5 billion cannot be accounted for and noted that "it was impeding PIAC’s appreciation of the full scope of accounting to the public on the utilisation of our petroleum revenues."
PIAC also revealed violations in the use of the ABFA, as 45.14 percent of it was spent on recurrent expenditure, with 54.85 percent on capital expenditure, contrary to Section 8(4) (a) of Act 893, which requires that a minimum of 70 percent be spent on public investment expenditure.
Meanwhile, for the second consecutive year, there was no allocation from the ABFA to the Ghana Infrastructure Investment Fund (GIIF), converse to the provisions of the Petroleum Revenue Management Act (PRMA) adding that it could put future infrastructure development in jeopardy if not checked.
Touching on the GNPC and what its core focus must be on, PIAC said the state-owned petroleum firm continued to provide guarantees for a range of state-owned firm enterprises, amounting to US$645.5 million in 2019.
A practice the Committee’s Chairman, Mr Wadzah, said defeated prudent management of taxpayer funds: “This is about double, compared with the previous years and also outweighs the Corporation’s total equity financing of US$164.79 million for the period.”
Mr Wadzah, consequently cautioned that GNPC’s actions had the tendency to stifle investment into its core activities like exploring for new resources and development of the industry as a whole.
On gas, the PIAC Chairman said gas production within the last two years witnessed its greatest boost since the commercialisation of natural gas in Ghana started.
A total of 169,508.61 Million Metric Standard Cubic Feet (MMSCF) of associated gas (AG) and non-associated gas (NAG) was produced in 2019; an 85 per cent increase over the 2018 volume of 91,459.30 MMSCF.
He said while the Jubilee Field had always produced the highest volumes, the trend was reversed for the first time in 2019, with the Sankofa Gye Nyame (SGN) Fields combined AG and NAG contributing the highest volume of 69,941.60 MMSCF.
The Jubilee and TEN Fields produced 51,179.67 MMSCF and 48,387.34 MMSCF, respectively.
On the total petroleum revenues, receipts accrued from the Petroleum Holding Fund (PHF) in 2019 was $925 million and were distributed to the GNPC, the ABFA, the Ghana Stabilisation Fund (GSF) and the Ghana Heritage Fund (GHF).
Also, the four priority areas of the ABFA as stipulated in ACT 815 (2011) were agriculture, which received GH¢71.6 million, roads, rail, and other critical infrastructure development priority, had GH¢579.2 million, education and health, received GH¢570.8 million and GH¢ 46.3 million, respectively as well as some disbursement to the PIAC.
The Committee also reiterated earlier calls on Parliament to consider placing some restrictions – cap – on the proportion of GNPC’s budget on corporate social investments and guarantees to state institutions, particularly in the light of the Corporation’s inability to respond to some of its cash calls.
PIAC cautioned that the management of petroleum revenues remained flawed with numerous challenges, ranging from lack of transparency in utilisation of funds and a deviation in the core mandate of the GNPC from the commercial production of oil and gas.
It called on the government to expedite action on the infrastructure requirements for gas evacuation and utilization, to avoid the huge backlog of make-up gas volumes and the potential for resource waste,” the report said.