The Executive Director of Kumasi Institute of Technology and Environment (KITE), Ishmael Edjekumhene has warned, revenue generated from the country’s petroleum sector will have little impact on economic development if government is unable to prioritize key areas to invest such revenue.
According to him, research conducted has shown that governments, over the years, have failed to prioritize the use of revenue generated from oil.
This comes despite the existence of the Annual Budget Funding Amount (ABFA) mechanism which is supposed to ensure the efficient and accountable utilization of petroleum revenue towards developmental projects.
Speaking to Citi Business News, Mr. Ejekumhene said the ABFA mechanism must be enforced to ensure a long term development strategy focusing on fewer impactful projects.
“We as a country put too much faith in what we call the ABFA, which is the annual budget funding report and also PIAC. So after six years of this experiment, we sought to find out if indeed the ABFA and PIAC have served the purpose for which they were set up”, he said.
Making reference to a recent exercise by some members of KITE, Mr Ejekumhene revealed that majority of oil funded projects were in bad shape and incomplete.
” We decided to inspect 30 projects but we were only able to inspect 27, out of which some were not complete, some had not been started and some were in a very poor condition.
He also said that the use of ABFA and PIAC have fallen short of their effectiveness.
“What we have found out is that both of them have not been as effective as we would have loved them to be and the reason is simple for the ABFA it is because we have used the money for too many things instead of focusing on a few of them so that we can effectively execute them.”
He also called on government to immediately audit all projects that are receiving funding from the country’s oil revenue.
“Upon inspection of projects that are funded by oil revenue, it has been discovered that a number of them are in very poor conditions, some of them are not even at the locations they are supposed to be”
“There should therefore be an immediate audit on all projects that are receiving funding from the oil revenue”.
PIAC’s revelation on oil funded projects
Fifty (50) percent of government’s oil-funded projects from the 2016 annual budget funding amount (ABFA), allocated to the three regions of the north, are non-existent or have been poorly executed.
This was revealed by the Public Interest and Accountability Committee (PIAC), which said this had cost the state about $1.2 billion dollars.
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By: Anita Arthur/citibusinessnews.com/Ghana