NDC Blows Oil Cash For Votes

It has emerged that the previous Mahama administration in 2016 flouted the Petroleum Revenue Management Act (PRMA) in its spending.

According to the Public Interest and Accountability Committee (PIAC), the erstwhile NDC government made expenditure in 13 areas instead of four priority areas prescribed under the law.

The PRMA guides government on how to spend the country’s petroleum revenue.

Per the PRMA, out of the 13 priority areas in which government can make expenditure, it is only required to spend in four priority areas which can be changed every three years.

However, instead of spending solely on the already selected four priority areas (Capacity Building, Roads and Other Infrastructure, Amortisation and Agriculture Modernisation) for the last five years (2011-2016), the government spent in all 13 priority areas, especially in 2016, the election year.

The 13 broad areas from which any four priority areas could be chosen every three years are, “Agric and Industry, Science and Technology, Potable water, Infrastructure Development, Social Welfare and Rural Development.

The rest are Strengthening Institutions, Housing Delivery, Health Care, Environmental Protection, Public Security and Alternative Sources.

PIAC Unhappy

Addressing residents during town hall meetings in the Keta and Ketu South Municipalities, the Vice Chairman of PIAC, Kwame Jantuah, said the financial indiscipline is worrying, particularly when the funds are spread so thinly that the impact of the funds cannot be felt.

He stressed that revenue from the oil and gas sector should not be misapplied since there are procedures in ways in which the funds should be allocated.

“We are very disappointed that government will do that and spend without recourse to the law, because it was an election year,” he lamented.

He added that such spending reduces the impact of funds and in most cases “makes it difficult for us (PIAC) to even trace them, as the allocation is so thin and hidden in bigger projects being funded by the Consolidated Fund.”

Details of ABFA Allocation

Per the PRMA, petroleum revenue is to be disbursed among the Ghana National Petroleum Corporation (GNPC), Ghana Stabilisation Fund (GSF), Ghana Heritage Fund (GHF) and Annual Budget Funding Amount (ABFA), which supports the country’s budget.

It is the allocation to the ABFA that the Ministry of Finance disburses to fund government projects based on the four priority areas chosen at any given period.

According to the semi-annual report of PIAC, about $3.427 billion was accrued from the petroleum revenue between 2011 and 2016.

Out of this amount, about $1.473 billion was allocated to ABFA, which supports projects in Ghana’s budget.

Mr Jantuah expressed dissatisfaction with the misapplication of a whopping amount of $1.473 billion, equivalent to about GH¢5.8billion.

He said, “It is very worrying because the petroleum revenue represents just four percent of government’s total revenue. It is not right to spread the meagre petroleum oil revenue thinly on plenty projects when you have been asked to spend on four specific areas, all because of politics and votes.”

For instance, “Under capacity building, you have payments for feeding cost, BECE subsidy, capitation grant, school uniforms, etc which fall mostly on education, a different priority area on its own. These things could be taken care of by the GETFund.”

Dr. Affail Monney and Mohammed Afum, who are members of PIAC, therefore called on the current government to stick to the four priorities areas (Agriculture, Education, Health and Road Rail and other Infrastructure projects) chosen for 2017 to 2019.

They added that the allocations should not be thinly spread, but made on specific long-term and beneficial projects.