Safeguard Ghana?s Stabilization Fund


The Africa Centre for Energy Policy (ACEP) is worried about Government?s abuse of the?fiscal discipline provided in the Petroleum Revenue Management Act 2011 (Act 815). According to a recent report signed and released by the Executive Director ACEP, Mohammed Amin Adam, after the campaign by some Government officials for the use of the Ghana Heritage Fund failed, some preliminary checks have alleged that Government has now shifted its plan to the Ghana Stabilization Fund.


Mohammed Amin Adam
Mohammed Amin Adam

?This must not be allowed at these formative years of the petroleum revenue management law,? the statement noted. ACEP calls on Parliament to investigate the utilization of the excess revenues from the Ghana Stabilization Fund. The report also calls on the Public Interest and Accountability Committee (PIAC) to demand answers from Government on this anomaly. The Government of Ghana in May 2014 used the US Dollar equivalent of GHS494.6 million, being excess revenues over the maximum cap on the Ghana Stabilization Fund, to finance expenditure contrary to the provisions of the Petroleum Revenue Management Act. The report signaled that the use of the excess revenues was to finance part of the widening fiscal deficit for the period January to May 16th, which exceeded the projected deficit by 12%.


The Petroleum Revenue Management Act provides in Section 23(4) provided that excess over the maximum cap in the Stabilization Fund shall be transferred to the Contingency Fund or used for debt repayment approved by Parliament. However, their research has revealed that the money neither reached the Contingency fund Account nor the Debt Service Account but has been used to finance regular expenditure. According to the report, this practice is not only a violation of Act 815 but also a violation of the 1992 Constitution of Ghana. He noted the use of money meant for the Contingency Fund is regulated by Parliament in line with Article 177(1&2) and they 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. However, 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.


BY/Source:? Abubakari Seidu Ajarfor, Punch Newspaper

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