The country’s Sinking and Contingency Funds have both been denied their overdue revenue to the tune of US$33.34 million, for the year-end December 2020, as mandated by law.
The two funds take their revenue source from the Petroleum Holding Fund (PHF) in which the underlying law places a cap of US$100 million on the Ghana Stabilization Fund (GSF), indicating that after the target is reached, every subsequent revenue should be transferred to either of these two funds.
However, the excess funds for the year-end December 2020, were not transferred, according to a report by the Public Interest and Accountability Committee (PIAC), the body mandated by law under section 51 of the Petroleum Revenue Management Act (PRMA Act 815), to serve as an oversight entity over the Petroleum Holding Fund (PHF).
“At the end of the period, an amount of US$33.34 million, being the excess over the cap of US$100 million placed on the Ghana Stabilization Fund (GSF) was not transferred into the sinking and/or contingency funds as required by law,” the report said.
Unfortunately, the Ministry of Finance did not give any tangible reason for the non-transfer of the cash, though it indicated that that the cash is available and have not been used for any other purposes.
The Ghana Petroleum Holding Fund, established by the Petroleum Revenue Management Act, 2011 (Act 815) is to receive all petroleum revenues that accrue to the State, from which further disbursements are then made.
For the period, the Fund received a total amount of US$235.3 million from lifting proceeds. Other revenue streams including Corporate Income Tax, Surface Rentals, and interest earned on the balance of the PHF amounted to US$74.9 million.
An October 2019 receipt of US$12.6 million was distributed in the period, bringing the total amount available for distribution in the PHF to US$322.7 million. However, the total amount distributed from the PHF for the first half of 2020, according to the Bank of Ghana, was US$322.6 million, leaving a balance of US$112.3 million.
The report further indicated that total petroleum funds distributed since inception till end of June 2020 was US$5.32 billion, of which approximately 39 per cent went to the Annual Budget Funding Amount (ABFA), 31 per cent to Ghana National Petroleum Corporation (GNPC), 21 per cent to Ghana Stabilization Fund (GSF) and nine per cent of the Ghana Heritage Fund (GHF).
This suggests that about 91 per cent of the petroleum revenue is available for spending by the current generation.