Business News of 2014-05-31

ACEP accuses gov’t of abusing petroleum revenue

The Africa Centre for Energy Policy (ACEP), an energy think-tank, has expressed indignation about the manner the government was allegedly abusing the fiscal discipline provided in the Petroleum Revenue Management Act 815 of 2011.

It has therefore called on Parliament to investigate the utilisation of the excess revenues accruing to the Ghana Stabilization Fund. This is contained in a statement signed by Dr Mohammed Amin Adams, Executive Director of ACEP, and made available to the GNA.

It stated that government in May 2014, spent dollar equivalent of GH¢494.6 million, being excess revenues accruing over the maximum cap on the Ghana Stabilization Fund, to finance expenditure contrary to the provisions of the Petroleum Revenue Management Act.

It said ACEP believed the use of the excess revenue was to finance part of the widening fiscal deficit for the period January to May 16 which exceeded the projected deficit by 12 percent.

The Petroleum Revenue Management Act provides in Section 23(4) that the excess over the maximum cap in the Stabilization Fund shall be transferred to the Contingency Fund or used for debt repayment approved by Parliament.

The statement said contrarily, the revenue was used to finance regular expenditure as "Our research has revealed that the money neither reached the Contingency Fund Account nor the Debt Service Account."

It stated that this practice was not only a violation of Act 815 but also a violation of the 1992 Constitution of Ghana.

The statement said the use of money meant for the Contingency Fund was regulated by Parliament in line with Article 177(1&2) and “we are not aware of any authorizations from the Finance Committee in Parliament for the use of the money as required by the Constitution.”

ACEP is of the view that whilst deficit financing is unavoidable, the use of oil revenues for that purpose must be guided by law. It was against such fiscal pitfalls that led to the strong restrictions on the management of petroleum revenues, which are now being abused by Government.

The statement said government had resorted to the Ghana Stabilization Fund after public outcry forced the campaign by some officials for the use of the Heritage Fund met stiff opposition from Ghanaians.

"This must not be allowed at these formative years of the petroleum revenue management law." It entreated the Public Interest and Accountability Committee (PIAC) to demand answers from the Government on this anomaly.