‘Finance Ministry must return to Parliament for approval on capping Stabilisation Fund’ - PIAC

The Public Interest Accountability Committee (PIAC) has urged the Ministry of Finance to seek approval from Parliament to maintain the capping of the Ghana Stabilisation Fund (GSF) at US$100 million.

Parliament upon the request of the finance minister, Mr Ken Ofori-Atta, approved the lowering of the capping on the Fund from US$300 million to the current amount in April 2020 when the government decided to set up the Coronavirus Alleviation Programme (CAP).

Since then, the capping of the Fund had remained at $100 million till 2022.

Speaking at a media engagement with members of the Institute of Financial and Economic Journalists (IFEJ), Mr Eric Keyman Defor, a PIAC member, said the approval granted to lower the cap was for the 2020 budget year.

He, therefore, advised the Ministry to request and justify to parliament in the upcoming budget presentation, why the capping should be maintained at $100 million since the period for which the capping was approved had elapsed.

The GSF was set up to cushion government in times of shocks to the economy, or unanticipated shortfalls in oil revenue which necessitates that money be sourced to balance the budget.

Even though the economy is in difficulties, Ghana recorded a revenue of $731.94 million for the first half of 2022, representing 93.4 per cent of the 2021 annual petroleum revenue of $783.33 million.

The figure, $51.39 million less than petroleum revenue for the entire year of 2021, indicated a 73.73 per cent increase in the projected petroleum revenue for the year and a 108.89 per cent increase in receipts for the first half of 2021, which was $350.3 million.

The Vice Chair of PIAC, Mr Nasir Mohammed, said the retention of the current cap of US$100 million on the GSF for the year 2022 was not in accordance with the formula stipulated in Legislative Instrument (L.I) 2381.

He explained that according to the LI, the computation of the capping should be based on the average of the Annual Budget Funding Amount (ABFA) of the current year, the year before the current year and the year after the current year.

“A proper application of the formula would have returned a figure of US$460,633,074.02,” he said.

The ABFA constitutes the main channel through which petroleum revenues are used to support the budget.

The Minister of Finance, MrOfori-Atta, in May 2022 however downplayed earlier calls for the reversal of the US$100 million cap set on the GSF by saying it was too early due to unpredictable nature of the COVID-19 pandemic.