The Public Interest and Accountability Committee (PIAC), has held a zonal media engagement in Ho, Volta Region, to interact with journalists on the management and use of petroleum revenues in Ghana.

The PIAC Team was led by Mr Richard Ellimah, a member of the Committee representing Civil Society Organisations (CSOs), Community-Based Organisations (CBOs) and Secretariat staff.
The event was a crucial platform for fostering dialogue between PIAC and the regional media on the challenges and achievements in the sector.

PIAC’s role in the petroleum revenue management space

The engagement began with a detailed presentation on the critical role PIAC plays in Ghana's petroleum revenue management space.

Established under Section 51 of the Petroleum Revenue Management Act (PRMA), PIAC serves as a unique citizen-led statutory body tasked with additional public oversight responsibility to support the work of Parliament over the collection, allocation, and utilization of petroleum revenues.

PIAC's roles include oversight and monitoring, accountability, advocacy, public engagement, and policy recommendations. The Committee is mandated to publish two reports annually—an annual report and a semi-annual report—based on the collection, collation, reconciliation, and analysis of production and revenue data from relevant stakeholder institutions.

However, a significant challenge PIAC faces is its lack of enforcement powers. The Committee relies on Parliament to enforce the implementation of its recommendations on the management and use of petroleum revenues.

Addressing these challenges will require coordinated efforts among government agencies, Parliament, civil society, upstream petroleum industry players, and PIAC to ensure the effective management and utilization of Ghana's petroleum revenues.

Petroleum Revenue Management – Lessons Learnt

The next session focused on lessons learned from managing Ghana's petroleum revenues since the discovery of oil and gas in commercial quantities in 2007.

The speakers emphasized the importance of the Petroleum Revenue Management Act (PRMA), enacted in 2011, which was designed to ensure the prudent management and use of petroleum revenues for sustainable development and the benefit of future generations.

Despite over a century of exploiting minerals and other natural resources in Ghana, the country has seen minimal gains. This realization spurred a different approach to managing petroleum resources, which has been a significant focus since the discovery of oil. The PRMA was introduced to address these concerns and provide a framework for the effective management of petroleum revenues. However, several issues remain unresolved, posing challenges to the sustainable development and long-term prosperity of the nation.

Revenue Collection Issues

The discussion highlighted several challenges in revenue collection, including wrongful lodgement of petroleum receipts. According to the PRMA, all petroleum receipts should be paid into the Petroleum Holding Fund (PHF). However, instances have been reported where these receipts were mistakenly lodged into the Ghana Revenue Authority (GRA) accounts instead of the PHF.

Additionally, the practice of International Oil Companies (IOCs) deferring surface rental payments into the PHF has limited the accruals to the Fund. Some IOCs with terminated petroleum agreements still owe the state, with outstanding surface rental payment totaling approximately US$2,738,365.29 as of the end of 2023.

Challenges in the Management and Utilization of ABFA

Another critical area of focus was the management and utilization of the Annual Budget Funding Amount (ABFA). The speakers pointed out several project implementation challenges, including the thin spread of projects, paltry allocations, and delays in project execution leading to cost overruns. Notably, an amount of GH₵297,035,604.60, representing 5.48 percent of the ABFA for 2023, remained unutilized.

There was also concern about unequal funding in priority areas. For instance, allocations and disbursements of ABFA to the Industrialization Priority Area have decreased significantly, from 1.15% in 2020 to a mere 0.11% in 2023, undermining the essence of prioritization. The ambiguity in Section 21(3) of the PRMA has also led to the abuse of the selection of priority areas, further complicating the effective management of petroleum revenues.

Public Investment Expenditure and Ghana Petroleum Funds

The engagement also addressed issues related to public investment expenditure non-compliance. Although the Ministry of Finance had been complying with the PRMA requirement to spend at least 70% of the ABFA on public investment expenditure during budgeting, there have been instances of non-compliance in actual expenditure.

Concerns were raised about the Ministerial discretion on the Ghana Stabilization Fund (GSF) cap. Excess funds over the cap are typically transferred into the Sinking Fund/Debt Service Account, ABFA, or the Contingency Fund. However, since 2020, the estimated cap has not been used by the Ministry of Finance, setting low caps that do not serve the intended purpose of stabilization.

Collaborative efforts between PIAC and the media

The event concluded with discussions facilitated by Ivy Setordjie of Joy News on how PIAC and the regional media can collaborate to enhance accountability in the management of petroleum revenues.

Journalists were encouraged to engage with PIAC more closely and report on the Committee's findings and recommendations to keep the public informed and hold public officials accountable.

The engagement was an important step towards ensuring that Ghana's petroleum revenues are managed effectively and transparently, benefiting both current and future generations.