CeSIS recommends amendment of Petroleum Revenue Management Act

The Centre for Social Impact Studies (CeSIS) has recommended an amendment of the Petroleum Revenue Management Act that outlines as many as 14 priority areas for petroleum revenue to be expended.

The policy advocacy group says revenues from the sector should rather be concentrated on not more than three priority sectors whilst other areas are catered for through regular budgeting process.

Petroleum revenues present government with an additional source of funding to execute different development agenda.

But CeSIS has expressed worry at findings in the Public Interest Accountability Committee (PIAC) reports on the quality of spending of petroleum revenues over the years.

According to the 2013 PIAC Report, an amount of 23 million Ghana cedis earmarked for capacity building from 2011 to 2013 went into the procurement of goods and services for the Ministry of Food and Agriculture, Ministry of Lands and Natural Resources and National Disaster Management Organisation (NADMO) as well as an additional two million cedis to support the creative industry.

“While admittedly these expenditures are all towards national development, CeSIS is nevertheless worried about a creeping perception that petroleum revenues are "free monies" that should be allocated to any sector of the Ghanaian society,” said the group.

The PIAC report has recommended that government conducts an immediate evaluation of the effectiveness and impacts of all the projects and programmes that have been funded with revenues from the petroleum sector.

The report also says government should “focus its expenditure under the capacity building priority area on interventions that will directly enhance the capacity and capabilities of Ghanaians to play a bigger role in the emerging oil and gas industry as envisaged in the Local Content Policy and Regulation”.

A long-term National Development Plan (NDP) remains crucial to guide the utilization of oil revenue in order “to have a consistent application of the resources to planned projects”, says the African Center for Energy Policy (ACEP).

Executive Director of CeSIS, Richard Ellimah, says the spending on capacity building, for instance, should be restricted to three areas.

These include support to regulatory agencies like the Environmental Protection Agency (EPA) and Petroleum Commission to undertake specialised training in oil and gas regulation; provision of equipment and modern machinery to the regulatory bodies to enable them regulate the sector; and training of a corps of young Ghanaians in oil and gas to be positioned to capture key managerial positions and skilled vocations in the oil and gas industry.

The PIAC was established under the Petroleum Revenue Management Act to provide a public oversight over Ghana's oil and gas industry.

But CeSIS is disappointed at the lack of support for the Committee.

Mr. Ellimah says in the face of mounting corruption allegations and concerns over misuse of petroleum revenue, it is imperative that PIAC is strengthened to perform its oversight role well.

“For purposes of transparency and accountability, government has a duty to empower this committee and ensure it builds the needed confidence in the public that their oil and gas resources are being utilised efficiently to support national development,” he said.

Executive Director of ACEP, Dr. Mohammed Amin Adam, has observed the integrity of Ghana’s oil and gas resources will be better protected when PIAC is given a strong legal status.

He believes such capacity is critical to enable the Committee undertake its own independent analysis and technical work on the use of the country’s oil revenues.

Story by Kofi Adu Domfeh