PIAC proposes national dialogue on Annual Budget Funding Amount

Prof.Buah-Bassuah addressing the participants

Prof.Buah-Bassuah addressing the participants

The Public Interest and Accountability Committee (PIAC), has proposed a national dialogue on the use of the Annual Budget Funding Amount (ABFA), to ensure sustainability.

This dialogue, it suggests, should preferably take place before the next budget and its outcomes inform the ABFA allocation in the 2016 budget.

The Chairman of PIAC, Prof. Paul Kingsley Buah- Bassuah made this suggestion in a presentation on “Following the Oil money: The use of petroleum revenue (2011-2014-2015) in community development” at a day’s forum organised by the Friends of Nation (FON) recently. It was attended by fishermen, the marine police, the media, researchers, Fisheries Commission, NGOs and law advocates.

He explained that there was an urgent need for the ABFA to be better targeted and well focused   to help maximise its effectiveness and impact on the socio-economic development of Ghana.

“PIAC is therefore calling for a national dialogue or debate on how best the nation could derive the most benefits from its hydrocarbons.” he added.

Commenting on the thinly spread of ABFA spending, he recommended that, in order to forestall the arbitrariness as well as the accountability and responsiveness on the management of the Petroleum revenues, Parliament should make it mandatory that the Reconciliation Report should be submitted by the Minister of Finance during the first quarter of every year.

This, Prof Buah-Bassuah mentioned should include a report detailing the outcome and impact of ABFA spending in the preceding year.

The list of the projects, he said, should be supported by the ABFA in  the current  year and the justification for  the  projects which  could pay off itself for sustainability.

The PIAC Chairman  said, the Ministry of Finance, Bank of Ghana and PIAC must work together to establish  some guidelines for interest to  be  earned on any  unutilised funds, be it on the balances of ABFA or those set aside for specific purposes like the Contingency Fund, Debt Servicing  and the Ghana Infrastructure Fund.

This, he  believed,  would  forestall  the recurrence  of the  situation experienced   in 2014  whereby $222.93  million (GH666.06) remained  in the Consolidated Fund without earning any  interests, stressing that the mount which was swept by BOG should be refunded to ABFA account, as soon as practicable to  prevent further withdrawal from the Ghana Stabilisation Fund (GSF)  in 2015.

Fifty- five per cent of the 2014 ABFA allocation was not  utilised as a result of the  non-disbursement of the CBD loan for existing projects as well as the capping of the CBD facility during the latter  part of 2014.”  Prof Buah-Bassuah revealed.

On key findings of the 2015 semi report, the Chairman of  PIAC  noted that 55 per cent of the allocation to ABFA was used to service loans contracted for  oil and gas  infrastructure, 21 per cent allocated to build capacity, 20 per cent  used  for  roads and other infrastructure, with four  per cent for  interventions  to  modernise agriculture.

Approximately 99 per cent of the allocation to capacity building priority area went to support interventions in the education sector with approximately 65  per cent being  used  to fund various social interventions, noting  however,  that  no amount  was made towards building the capacity  of the oil and gas sector.

He told the participants that: “Only four per cent of the total ABFA went into agriculture modernisation with 61 per cent allocated to construct irrigation infrastructure.”

Again, he said, $213 million of the petroleum receipts was allocated during the period under review with $147.26  million disbursed to the ABFA and remaining 31 per cent ($66.33 million) going  to the GNPC, adding that there were no transfers to  the Ghana Petroleum Funds.

Prof. Buah Bassuah-continued: “Serious attention must be paid to the building of the capacity in the  oil and gas sector so  at  to  help ensure the realisation  of local content targets set out  in the Local Content  Policy. Meanwhile, the capital allowances regime granted to companies on the oil and gas industry should be looked at again owing to the drop of crude oil price and its effect on the profitability of the companies operating in the sector.

On the viability of the Saltpond Oil Field, he called for a critical appraisal of the    continuous  operation of that  Oil  field against  the backdrop of low crude price projected  to hover  around $52 in 2015, stressing that the business case for  operating that field  in 2015, had further been weakened considering that fact the  oilfield  produced a barrel of oil at  a cost of $31.22 in 2014.

Meanwhile, during discussions, participants strongly suggested that to ensure the  effective work of PIAC, its  funding, which had been approved  by Parliament,  should be timely  released to the committee, adding that projects   like roads  must ensure value for  money.

 From Clement Adzei Boye, Takoradi

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