September 26, 2020
Clickongh

PIAC urges government to stick to chosen oil-funded projects

The Public Interest and Accountability Committee (PIAC) has urged government not to exceed funding beyond four priority areas as permitted by law.

Per the Petroleum Revenue Management Act 2011 (PRMA), government can only fund four out of 12 listed priority areas for a three-year period to ensure effective and adequate funding.

PIAC has, however, observed that government has consistently exceeded this target leading to some projects not receiving adequate funding.

The Petroleum Revenue Management Act 2011 provides the framework for the management and utilisation of the Annual Budget Funding Amount (ABFA).

The ABFA is guided by a long-term national development plan but in the absence of this plan, Section 21 of the Act spells out the application of the ABFA to 12 priority areas from which the Ministry for Finance is enjoined to select up to four for spending from the budget over a three-year period. The selection of the priority areas is guided by the prevailing medium-term development framework.

PIAC’s assessment of the management and use of the ABFA mechanism over the years has revealed that even though four priority areas are selected, actual spending tends to cover all the 12 listed priority areas within the PRMA.

This practice has resulted in a situation where the ABFA is used to fund all manner of activities outside the four priority areas.

The priority areas selected to benefit from ABFA funding for the period 2017-2019 included Agriculture, Physical Infrastructure and Service Delivery in Education, Physical Infrastructure and Service Delivery in Health and Road, Rail and other critical Infrastructural Development works.

Speaking to Citi Business News at the launch of an issue paper on the management and use of petroleum revenues, Chairman of PIAC, Noble Wadzah said government should start paying attention to its spending.

“Our research over the years has revealed that government has been consistent in selecting the four priority areas as mandated by law for the expenditure of petroleum revenues yet actual expenditure actually stretches beyond the four priority areas. The threshold that has been established to spend petroleum revenues the actual expenditure goes beyond that. The result of this is the thin spread of revenue for projects”.

 

 

 

 

Source: Business