‘Improve accountability in petroleum revenue management’

BY: Victor Kwawukume
• Mr Seth Terkper, the Minister of Finance and Economic Planing

The Public Interest and Accountability Committee (PIAC) has called for greater accountability in the management of petroleum revenues.

Consequently, it has urged Parliament to make it mandatory for the reconciliation report submitted by the Minister of Finance in the first quarter of the year to include a report detailing the outcomes and impact of annual budget funding amount (ABFA) spending in the preceding year.

The report, the committee said, should also mandatorily include the list of the projects to be supported by the ABFA in the current year and their justification.

According to the PIAC, the measures would forestall arbitrariness in the system. The call by the PIAC was made in its 2014 annual report on the management of petroleum revenues.

National dialogue

Among other recommendations, the committee stressed the 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 the country.

In view of that, it called for a national dialogue on how best the nation could derive the most benefits from its hydrocarbon resources.

It suggested that the proposed dialogue should take place preferably before the next budget and its outcomes used to determine ABFA allocation in the 2016 budget.

Exchange rate

Also, the committee recommended that to make for easy reconciliation and authentication of payments and disbursements of the ABFA to various priority areas, the exchange rate used to convert the amounts into cedis should be published by the Ministry of Finance in the annual and reconciliation reports on petroleum funds.

In addition, it called for the Finance Ministry, the Bank of Ghana (BoG) and the Investment Advisory Committee (IAC) to work together to establish guidelines for interest to be earned on any unutilised funds, be it on the balances of the ABFA or those set aside for specific purposes.

Invest unutilised funds

“This will help forestall the recurrence of the situation experienced in 2014 when US$222.93 million remained in the Consolidated Fund through the year,” the report said.

It also noted that the allocation to the ABFA in 2014 was distributed to only three priority areas, namely: expenditure and amortisation of loans, roads and other infrastructure and agricultural modernisation.

“No allocation was made to the ‘capacity building’ priority area in 2014 because planned expenditure was contingent upon the China Development Bank (CDB)-related small and medium enterprise (SME) projects incubation facility which did not take off,” it explained.

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