Editorial : Loopholes in petroleum revenue management worrying

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The Public Interest and Accountability Committee’s (PIAC) 2019 annual report has again amplified that petroleum revenues lack proper accountability – with challenges such as a lack of transparency in the utilisation of petroleum funds, to a deviation in the core mandate of the Ghana National Petroleum Corporation (GNPC) to name just two.

GH₵1.5billion cannot be accounted for out of the Annual Budget Funding Amount (ABFA) for last year, and this is not the first time this is happening; because, according to available information, it is the third year running that such a sizeable proportion of the ABFA cannot be accounted for.

It is all well and good that PIAC points out these flaws in petroleum revenue management to the citizenry periodically; but when it persists and we accept it as business as usual, then we are defeating the whole idea of accounting for petroleum funds.

Again, contrary to provisions in the Petroleum Revenue Management Act as well as the Ghana Infrastructure Investment Fund (GIIF) Act 877, for a second consecutive year running no allocation from ABFA was made to GIIF.

PIAC lacks the power to hold individuals and organisations to account, and therefore can only urge Parliament to bring its oversight responsibilities to bear and ensure the Ministry of Finance accounts properly for unutilised ABFA.

However, where we really have an interest is PIAC’s insistence that Parliament should consider a cap on the proportion of GNPC’s budget for corporate social investments – including guarantees to state institutions, since some of these expenditures can be quite baffling.

Many a time, the political class engage in some form of financial engineering to raise monies to undertake specific projects and fall on petroleum funds as a safe haven without due regard to the Petroleum Revenue Management Act, which spells out how such monies must or ought to be utlilised.

If they were to follow dictates of the law governing management of petroleum revenue, such loopholes in revenue would be minimised if not obliterated. It is specifically to ensure the country does not fall into what is termed the ‘resource-curse’ that Parliament went to great lengths to observe best practices around the world and enact the Petroleum Revenue Management Act.

Let’s not trivialise its provisions by rendering it ineffective. Rather, we should be upholding the law to ensure social justice for Ghanaians.

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