Common Fund starved of oil funds — PIAC worried
The Semi-Annual Report 2022, authored by the Public Interest and Accountability Committee (PIAC), has revealed that no transfer of funds from the Annual Budget Funding Amount (ABFA) was made into the District Assembly Common Fund (DACF) in the first half of this year.
That is in spite of the fact that an amount of GH₵157.77 million has been budgeted for the year.
Advertisement
PIAC has, consequently, urged the government to, as a matter of urgency, release projected allocations to the DACF.
It said the non-disbursement of funds to the district assemblies had stalled development projects being undertaken in various parts of the country.
The development, experts say, is also negatively impacting the operations of small businesses which survive on sub-contracts from the big players while halting business activities within the districts.
The ABFA is the amount of petroleum revenue allocated for spending in the budget in each financial year.
In the 2021 PIAC Annual Report, the committee reported that the total ABFA transferred to the DACF for the entire year was GH¢32.38 million. Subsequent to that, the Ministry of Finance (MoF) released an additional amount of GH¢85.95 million to the DACF.
Non-release of funds
Speaking at the launch of the PIAC report in Accra on September 27, the chairman of the committee, Professor Kwame Adom-Frimpong, explained that although the DACF was supposed to receive five per cent of ABFA allocated from the Petroleum Holding Fund (PHF), it was not paid until last year when some parliamentarians took the government to court.
He said the government then acted and paid part of the amount into the fund.
“So, we were thinking that once the government has made an attempt to comply with the court ruling, the practice will continue. This year, we are more than half year through and nothing has been paid.
“We are just drawing the attention of the government that it is not a promise but one enshrined in the Petroleum Revenue Management Act, 2011 (Act 815), as amended by Act 893 (PRMA). It’s a responsibility. We are urging that what is due the DACF is released to them or else a lot of projects by the DAs will be difficult to continue,” he said.
Allocation to ABFA
The budgeted ABFA for 2022 was US$4.75 million (GH¢3.15 billion) and this was broken down into four quarters of (GH¢7.9 million) per quarter as required by the PRMA.
This means that for the first half of 2022, budgeted ABFA was US$2.37million (GH¢1.6 billion).
According to the report, the ABFA received a total of US$1.83 million (GH¢1.3 billion) for the period under review from the PHF, representing 81.89 per cent of the budgeted ABFA for the first half of 2022 and 40.95 per cent of the total budgeted ABFA for the full year of GH¢3.15billion .
Some findings
The report covers the period January to June 2022 and encompasses a broad range of issues relating to petroleum revenue management.
That include; information on production, liftings, total revenues accruing and allocation by government, ABFA utilisation and the management of funds set aside in the Ghana Petroleum Funds, Ghana Stabilisation Fund and the Ghana Heritage Fund.
From 2011 to date, total petroleum revenues amounted to US$8.09 billion.
Total receipt of surface rentals (acreage fees) from nine out of 14 companies amount to US$6.88 million in the first of 2022 as compared to US$697,977.96 for the same period in 2021, representing a 1.46 per cent decline.