Professor Kwame Adom-Frimpong, the Chairman of the Public Interest and Accountability Committee (PIAC), has urged the Ministry of Finance to minimise its short-term reliance on the Ghana Stabilitisation Fund to finance government expenditure.
Allowing the GSF to grow, he said, placed the government in a better position to withstand economic shocks that may arise as a result of unfavourable economic patterns or unpredicted shortfalls in petroleum revenue.
“The fact that the cap is there does not mean that if funds exceed, we should go and withdraw from it,” he said.
Prof Adom-Frimpong was speaking on the semi-annual report on the Management and Use of Petroleum Revenues for January to June 2021, at a stakeholder engagement with some students at the University of Professional Studies, Accra.
The engagement was part of activities to mark the 10th anniversary of PIAC, which has a mandate of creating a platform for public debate on oil revenue.
The Ghana Stabilitisation Fund (GSF), which is a component of the Ghana Petroleum Funds (GPF) was set up to allow for money to be sourced to balance the budget.
Prof Adom-Frimpong said though the Minister of Finance had discretion, it was subject to Parliamentary approval and the cap on how much could be accrued to the GSF as necessitated by macroeconomic conditions.
He further explained that the cap could be reviewed downwards or upwards depending on dynamics on the oil market.
With the cap currently at US$100 million, the semi-annual report said excess over the cap amounted to US$38.84 million, while the closing amount stood at US$138.84 million as at June 2021.
Dr John Kwaku Mensah Mawutor, the Vice Dean of Graduate Studies, UPSA, in an interview with Ghana News Agency, highlighted the need for legislations on petroleum revenue to “tie the hands of government where instead of budget support, the money would be put into development projects, which will improve the worth of Ghanaians.”
Miss Mabel Obeng, a level 300 student, appealed to PIAC to make recommendations for the use of oil revenue to help Ghanaians along the coastal areas because they were more likely to suffer from the adverse effect of climate change with off-shore drilling activities being a contributory factor.