There has been heated debate over the usage of the Heritage Fund (HF) in the political space. Many including officials of the ruling government, opposition members as well as civil society actors such as ACEP, ISODEC, CSPOG and IMANI have shared their views on this crucial national issue. This came as a result of government’s decision to use the fund to finance the free senior high school policy as revealed by the senior minister, Yaw Osafo Marfo.
Surprisingly, none of these entities or personalities are against the implementation of this policy. However, the contention arises from the source of funding for the policy. Whilst some claim the utilization of this fund for this policy is in the right direction, others are of a different opinion. This has necessitated us to find out what the law really say concerning the said fund. What is the Heritage Fund? What does the law say about its disbursement and when withdrawals can be made?
The Heritage Fund is a creation of section 10 of the Petroleum Revenue Management Act 815 enacted in 2011. The purpose of the establishment of this fund is to provide an endowment to support the development of future generations when the petroleum reserves have been depleted according to Act 815 (2011) and amended Act 893 (2015). The fund receives a percentage of oil revenue accrued to the Petroleum Holding Fund. In view of this parliament of Ghana pegged this figure at 9%. This means that out of the total oil revenue received into the Petroleum Holding Fund the Heritage Fund receives only 9%. This amount is saved at the Bank of Ghana till oil reserves in the country have been depleted. The remaining, 91%, goes into the Annual Budget Funding Amount (ABFA) and Stabilization Fund. 70% of this goes into the ABFA which goes to support the annual budget of the country whilst the remaining 21% goes into the Stabilization Fund which is used to cushion oil price in the event of oil price fluctuations.
Review of percentage of the Heritage Fund
The percentage of the HF as agreed by parliament can only be reviewed after fifteen (15) years according to section 10 (4) of the Petroleum Revenue Management Act 815.
Consolidation and withdrawals from the Heritage Fund
According section 20 of the Act, the Heritage Fund can only be touched within a year after the oil reserves have been depleted. The amount accrued to the fund together with the Stabilization Fund could then be lumped into a single fund called the Ghana Petroleum Wealth after which the former name will cease to exist. No withdrawals until after depletion of oil reserves. After 10 years, interest can be spent subject to simple majority in Parliament.
So we ask, why the rush in using this fund? Have we met the requirements as prescribed in the Act? What future are we building for the generation to come? Is the money enough to fund the purpose for which we want to spend on?
Kwabena Tabiri, reportingoilandgas