Business News of 2014-04-24

Government failed to protect oil revenue – Revenue Watch

The Revenue Watch Institute has revealed in its latest report that some key government agencies failed to implement the laws, rules and policies governing Ghana’s natural resources funds.

The report implicated the Finance Ministry, the Bank of Ghana, the Auditor General, Ghana Revenue Authority among others, for failing to ensure the appropriate use of Ghana’s revenues from natural resources including oil.

Speaking at the launch of the report, an economic analyst at Revenue Watch Institute Andrew Bauer- Gador warned that Ghana’s public financing is not on a sustainable path.

“The deficit keeps growing and debt keeps growing …, the debt seems to have started increasing and the deficit to start really expanding when Ghana found oil”, he said.

Despite the failure of the government agencies to implement some of the laws, in terms of good governance standards Ghana scored thirteen out of sixteen points, one of the highest across the world.

The report said the ministry of finance for instance failed to among other things submit an annual report on the Funds to Parliament as part of the yearly presentation of the budget statement and economic policies.

It also did not publish in at least two state-owned daily newspapers funds accrued.

The Minister of Finance is responsible for the overall management of the Funds, investment strategy and transfers into and out of the Funds. Ghana’s petroleum revenue is first held in an intermediary Petroleum Holding Fund where it is then allocated to the Ghana National Petroleum Corporation, the Annual Budget Funding Amount and Ghana’s two sovereign wealth funds, collectively known as the Ghana Petroleum Funds.

However the ministry of finance has dismissed as untrue the findings of a non-profit policy institute, Revenue watch on the management of Ghana’s holding, heritage and stabilization funds.

Responding to the alleged failure to submit an annual report on the Funds to Parliament as part of the yearly presentation of the budget statement and economic policies

Dr. Joseph Asenso said it was “very very inaccurate, we submitted to parliament the 2011, 2012, 2013 annual reports, as I speak with you now about two weeks ago we submitted a 2013 reconciliation report on the petroleum holding fund to parliament”.

Dr. Joseph Asenso said most of the concerns expressed in the report had already been addressed by the finance ministry.

The Auditor-General, who is appointed by the President, performs an audit and reports to Parliament. The report says as of January 2013 it had failed to submit audited report to Parliament and also failed to publish the reports on the Funds within 30 days after submission to Parliament.

The bank of Ghana on the hand also failed to submit a report on the Funds to the Minister and the Investment Advisory Committee Quarterly. The bank was also supposed to publish this in the news paper which it failed to do.

The Ghana Revenue Authority also failed to assess and collect surface revenues.

Parliament was the only government arm that fulfilled all of its obligations under the Petroleum Revenue Management Act. It drafted the legislation creating the Funds, and approved many of the actions to manage the Funds.

Close to fifty five million dollars was transferred into the Ghana stabilization fund while about fourteen million dollars was saved in the Ghana heritage fund.

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