PIAC proposes strategies for sustainable investment of petroleum revenues

PIAC presentation on the Management and Investment Strategies
PIAC presentation on the Management and Investment Strategies

The Public Interest and Accountability Committee (PIAC), a body responsible for ensuring transparency and accountability of Ghana’s petroleum revenues, has raised red flags over the application of the revenue by successive governments.

The Committee said, for instance, that successive governments used the petroleum revenues to tackle too many national problems at the same time, thereby weakening the potential impacts of the oil revenue on the socio-economic development of Ghana.

Ghana had raked in US$ 7.36 billion from petroleum receipts as at the end of December 2021. The amount comprised petroleum receipts from 2011 to 2021.

Mr Isaac Dwamena, a Member of PIAC, said this in his presentation on the Management and Investment Strategies for the Utilisation of the Annual Budget Funding Amount of Petroleum Revenue, at a workshop in Accra.

However, he said, because governments used the funds to tackle so many projects at the same time some of those projects were left uncompleted, hence Ghanaians were not getting maximum benefits from the oil revenues.

“I can tell you, sometimes, the petroleum revenue is used to tackle 4,000 infrastructure projects within a year and so when such things happen, it’s very difficult to complete them and we don’t get the expected benefit,” Mr Dwamena said.

The absence of a national development plan made each government select projects based on its party manifesto and that did not help in ensuring coordinated development of the country, he said.

“There is also a weak mechanism for monitoring projects and that leads to many stalled projects and even change of location for earmarked projects due to bad communication from the implementing agency.”

Mr Dwamena bemoaned the lack of consultation and involvement of stakeholders and beneficiaries in selecting and awarding projects, thereby creating ownership challenges upon completion.

“When PIAC was doing its normal monitoring of projects being funded with petroleum revenues, we got to some assemblies and we inquired about the contractors implementing certain projects, and some of the assemblies were completely unaware of that contractor because the contract was awarded in Accra without their involvement,” he said.

Mr Dwamena said PIAC believed that the Government must ensure a robust monitoring and evaluation plan that includes disaggregated responsibility between national and sub-national structures to enhance supervision and monitoring of projects funded with petroleum revenues.

“PIAC believes that few legacy projects should be identified and supported with petroleum revenues to complete them.”

“Ghana needs a long-term national development plan to guide the spending of petroleum revenues.”

Mr Joseph Sarpong, the Head of Energy and Petroleum Unit, Ministry of Finance, responding to the concerns raised by the PIAC, said the country’s development challenges were many, hence government applied the petroleum funds to aid in resolving them.

Also, the projects were selected based on government’s policy and on technical grounds, he noted.

He said the Petroleum Revenue Management Act mandated the Government to select four priority areas and apply the oil revenues judiciously and review its performance after every three years.

He mentioned roads and railways, health facilities, potable water and sanitation, public safety and security, education (Free SHS), agriculture modernisation, science and technology as well as alternative energy sources as some of the priority areas government used the petroleum funds to tackle.

However, mr Sarpong pledged to alert his superiors about the concerns raised by the PIAC for redress.

Mr Tijani Ahmed Hamza, the Country Director of OXFAM, expressed the belief that one of the indicators of a “Just Economy” was when the wealth and incomes generated by the State were equitably distributed.

Also, the revenues from the extractives must be used transparently and in an accountable manner to benefit the people, he said.

“We think this is important because oil revenues stand a better chance to help people, but only if we’re circumspect and apply these within an investment plan that spans different governments and is devoid of frequent partisan political control for personal gain.”

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