PIAC Expresses Concern Over Handling of Oil Revenue

By Kingsley E. Hope

Kumasi — The Public Interest and Accountability Committee (PIAC) has raised a red flag about the way and manner the Ministry of Finance is conducting its affairs in terms of the nation's oil revenue.

It claimed that in 2014, the ministry withheld an amount of 50million US Dollars from Ghana National Petroleum Corporation (GNPC), which it treated as a loan.

However, it said the transaction was not backed by any form of agreement spelling out the terms of the loan and repayment plan, "and surprisingly in 2018, the ministry wrote to the GNPC to expunge the amount from its books on account that the corporation had not been capped as required by the Earmarking Fund Realignment Act".

Dr Steve Manteaw, Chairman of PIAC, disclosed this during the launch of the 2018 report of the revenue of oil and gas of the nation.

He, therefore, encouraged the ministry to take steps to forestall the emerging trend of unspent Annual Budget Funding Amount (ABFA) which were often not accounted for in subsequent budgets.

Only 49 per cent of the utilised ABFA was used for capital expenditure, less than the 70 per cent stipulated in the Petroleum Revenue Management Act (PRMA), while 51 per cent was utilised for the supply of goods and services, he indicated.

According to the Chairman, Ghana National Gas Company (GNGC) received raw gas worth 85.21 million US Dollars from the GNPC during the year 2018 for which payment was outstanding, but GNGC made no attempt to defray part of its debt to GNPC, even though the company received revenue of 85.21 million US Dollars for the period under review.

Dr Manteaw was not enthused about government's persistent interference in GNPC's affairs and the tendency to use it to finance quasi-fiscal expenditure.

"Total guarantees and loans provided by GNPC to other State Owned Enterprises (SOEs) amounted to 325.39 million US Dollars by the end of 2018, but there is consistent and disturbing pattern in the affairs of GNPC which had hindered its ability to operate in accordance with good governance practice, and if not checked by parliament, will undermine the corporation's operational efficiency and threaten its sustainability," he quipped.

Touching on the clearing of the debts of Volta River Authority (VRA), he wondered why the Ministry of Finance had an arrangement with the GNGC to apply an amount of 233.15 million US Dollars, being part of its receivables from VRA to defray part of the CDB loan.

He recommended to parliament to consider reviewing the situation where the Earmarked Funds Capping and Realignment Act 2017(Act 947) was used to override provisions in existing laws, without repealing relevant sections of those laws when all Acts of Parliament were supposed to have equal standing.

While PIAC is satisfied with the quality of spending by the GNPC Foundation, it recommended to parliament to consider some restrictions on the proportion of GNPC's budget that could be channeled into Corporate Social Investment (CSI), to forestall any future excessive expenditure in this category, Dr Manteaw indicated.

Read Full Story