PIAC tells Ghana government to abolish $100m cap on Stabilisation Fund
The Public Interest and Accountability Committee (PIAC) has made a strong case for the abolition or an upward review of the $100 million cap on the Ghana Stabilisation Fund (GSF) to secure the future of the economy.
The GSF is a part of the oil revenue set aside to cushion the economy against future shocks.
Government, however, capped the fund in the wake of the COVID-19 pandemic to enhance its fiscal space.
But PIAC strongly believes that the time has come for a reversal of the cap, cautioning that the situation was detrimental to the Ghanaian economy.
Mr Constantine Kudzedzi, the Chairman of PIAC, has, therefore, called on Parliament to take steps to compel government to completely remove or raise the cap.
He observed that some $530 million would have accrued in the Fund had government complied with the provisions in the Petroleum Revenue Management Act.
“The cap is not making the fund grow.
“What it means is that what should go into the fund to stabilise the economy when there is a shortfall in revenue in future is not going into the fund and it is not too good. It is a source of worry,” he noted.
Mr Kudzedzi made the remarks at a public forum at Elmina on the 2024 PIAC semi-annual report.
The forum followed the inspection of some oil-funded projects in the Komenda-Edina-Eguafo-Abrem Municipality.
The meeting was intended to solicit feedback and encourage public participation in the management of the country’s oil revenue in line with section 21 (3) of the Petroleum Revenue Management Act, 2011 (Act 815).
The projects inspected included the construction of the 2020 National Flood Control Programme project for the Ministry of Works and Housing at Komenda Zongo, bitumen surfacing of the Komenda Senior High Technical School’s internal roads and the rehabilitation of Komenda town roads covering a distance of 5.07 kilometres.
Mr Kudzedzi expressed satisfaction with flood control project but was appalled by the state and quality of work of remaining projects.
He reiterated the need for government to undertake projects solely funded with oil revenue to make it easy for the people to track and appreciate the benefits of the oil resource.
He said the current situation where projects were co-funded with revenue from oil and other sources made it difficult to appreciate the impact of the resource.
Some participants of the forum pushed for the involvement of the people in the awards and execution of projects in the various districts.
They also recommended that Parliament should get involved in deciding how the Annual Budget Funding Amount was distributed across the various priority areas instead of leaving it to the sole discretion of the Finance Minister.
PIAC reported that crude oil production for the first half of 2024 increased by 10.7 per cent as compared to a decline of 13.2 per cent in the same period in 2023 and attributed to the improvement primarily to the Jubilee South East (JSE) project.
The total petroleum receipts for the period increased by 55.6 per cent from US$540,456,124.27 in the first half of 2023 to 840,765,265.80 in the first half of 2024 mainly due to increased production for the period, the report added.
GNA