Policy researcher and think-tank IMANI Centre for Policy and Education says government’s expenditure pattern for oil revenues will not attain desired impacts in the absence of a long-term development plan.
Under the Petroleum Revenue Management Act (PRMA), revenue from oil that is earmarked as the Annual Budget Funding Amount can be expended on selected areas for amortisation of oil and gas loans, road and other infrastructure, agricultural modernisation, and capacity building.
Since 2011 government has spent about GH¢1.9billion in the selected areas, but Theo Acheampong — a Petroleum Economist and Fellow of IMANI –said the revenue is thinly spent on so many areas, making it difficult for government to realise the impact.
Mr. Acheampong, speaking in a seminar on accountability in the oil and gas sector, said the PRMA does not give room for prioritising the pro-poor sectors of education, health and agriculture.
“Efficiency of spending petroleum revenues still remains a challenge; ABFA funds are thinly distributed over many capital projects. This obviously will delay the socioeconomic benefit of these projects.
Generally, the pro-poor sectors of Education, Health and Agriculture were not allocated significant portions of petroleum revenues within the time period under review (2011-14),” he said.
“To curb the spending inefficiency canker, spending of petroleum revenues should be based on an investment plan guided by a long-term national development or medium term development framework,” Mr. Acheampong added.
Education sector disbursements constituted a paltry 1.49 percent of total ABFA expenditure from 2011 to 2013, while ABFA disbursements to the Agriculture and Health sectors from 2011 to 2014 represented 14.4 percent of total ABFA expenditure.
Mr. Achemapong bemoaned the fact that even in the face of oil revenue, infrastructure development in the areas of health and agriculture are largely donor-driven — a situation he said could jeopardise the country’s development of key infrastructure.
“Government should commit a substantial portion of the petroleum revenues to the Pro-poor sectors, as these sectors are pivotal in the pursuit of sustainable economic development,” he added.
“Infrastructure as a priority area received 56 percent of the total ABFA spending over the four years (2011-2014) while disbursement to the Road and Highway sector constituted 41.1 percent of total ABFA spending, despite the sector relying significantly on donor support.
Mr. Acheampong said it -s important that Ghana comes out quickly with a National Long Term Development Plan to guide the use and prevent misuse of natural resources.
There is therefore need to increase stakeholder engagements on how and what goes into the decisions and selection of the four project areas where petroleum revenues are to be applied by the ABFA funding.
He also asked for budgetary allocations to Accountability institutions such as PIAC, which is being starved of funding needed to enable it effectively monitor how petroleum expenditure and revenues are applied.