The Chairman of the Public Interest and Accountability Committee (PIAC), Dr. Steve Manteaw, has challenged government to dilute the funding sources for its Free Senior High School Policy, in order to free up funds for critical infrastructure projects in 2020.
According to PIAC’s 2018 Annual report, out of the amount utilized from the Annual Budget Funding Amount, GHC 419 million Ghana Cedis (representing 51 percent), was spent on education while GHC 255 million Ghana Cedis (representing 31 percent) was spent on road, rail and other critical infrastructure.
In an interview with Citi Business News on the use of oil revenue, Dr. Manteaw said drastic measures are needed to ensure an increasing chunk is invested in critical infrastructure.
“Fundamentally, the current government has breached a very important aspect of the Petroleum Revenue Management Act, which is the requirement to spend a minimum of 70 % of net petroleum revenue on infrastructure. A provision that in my opinion moves us away from treating our natural resource revenues as income for consumption and to start treating the revenues as income for investments. The only way to be able to fulfill this obligation will be for us to dilute the funding for free SHS.”
Ghana’s Petroleum Revenue Management Act (PRMA) has arguably improved the transparency of petroleum revenue allocation. This is borne out by Public Interest and Accountability Committee (PIAC), Ministry of Finance, Ghana National Petroleum Corporation and Bank of Ghana publications regarding how much petroleum revenues are collected and where they go.
However, there are concerns the act has not adequately addressed issues relating to revenue volatility and expenditure smoothing, or contributed to overall fiscal sustainability. Petroleum revenue management in Ghana, guided by the legislation, faces critical challenges.
Many complexities in executing and interpreting the PRMA have also caused digressions from the spirit of the act. PIAC therefore believes that there is an urgent need to go back to the basics to align with the core principles of the PRMA and to identify and consider potential reforms.