The Public Interest and Accountability Committee (PIAC) has said the failure of the government to reconstitute the Investment Advisory Committee (IAC), exactly two years after coming into office, despite repeated calls to do so, contravenes the petroleum laws.
Section 29 of the Petroleum Revenue Management Act (PRMA), Act 815 states “There is hereby established an Investment Advisory Committee to advise the Minister and for the general performance monitoring of the management of the Ghana Petroleum Funds.”
Additionally, the membership of IAC, according to Section 32 (3) enjoins the Minister in consultation with the Governor, of the Bank of Ghana, to nominate the members for appointment by the President
The work of the IAC, includes, to formulate and propose to the Minister the investment policy and management of the Ghana Stabilisation Fund and the Ghana Heritage Fund (GHF) for submission for the approval of Parliament.
The Committee is to also advise the Minister on the broad investment guidelines and overall management strategies relating to the Ghana Petroleum Funds and subsequently the Ghana Petroleum Wealth Fund that the Minister shall provide to the Governor, taking cognisance of international best practice of investments of a similar nature.
Despite, these critical roles expected of the IAC to play in the use of the petroleum revenues, the Ministry of Finance and Economic Planning is yet to fulfill this statutory mandate notwithstanding the repeated recommendations from PIAC.
PIAC’s findings, in its just-released half-year report for 2018, notes that “as indicated in the 2017 Annual and Semi-annual reports, the Investment Advisory Committee (IAC) has still not been reconstituted following the change of government in January 2017.”
In view of this, the Committee, which is tasked with the oversight responsibility of monitoring and evaluating the management of Ghana’s petroleum resources, has again recommended as matter of urgency for the IAC must be reconstituted.
It repeated that the current situation is in contravention of Section 29 of the PRMA.
It also revealed in its latest findings that even though Ghana National Gas Company (GNGC) received US$46,342,944.10 as proceeds from gas revenues, it made no payment to Ghana National Petroleum Company (GNPC) in respect of gas supplied, for which reason no gas receipts were realised in the Petroleum Holding Fund (PHF).
But PIAC said the GNGC explained that it used the realised revenues to cover its operational cost.
Following this development, it, therefore, recommended that the GNGC discontinue the practice of retaining gas revenues. “Receipts from the sale of gas derivatives must be applied to defray the cost of raw gas supplied by GNPC, for lodgement in the PHF in accordance with Sections 2 & 3 of the PRMA.”