Parliament has passed the Petroleum Revenue Management (Amendment) Bill, 2015 into law.
The Bill seeks to address irregularities and operational challenges in the management of revenue from the oil and gas sector.
The object of the Bill was to amend the Petroleum Revenue Management Act, 2011 (Act 815) to provide for the allocation of funds to the Ghana Infrastructure Investment Fund for the purposes of infrastructure development and to provide for the composition of the Investment Advisory Committee and formulated matters.
Act 815 was enacted to provide a framework for the collection, allocation and management of petroleum revenue in a responsible, transparent, accountable and sustainable manner for the benefit of the citizens of Ghana in accordance with the 1992 Constitution.
However, the implementation of Act 815 exposed some inconsistencies and typographical errors that needed to be rectified, hence, the amendment to conform to the intendment of the drafters.
Section 48 of Act 815 as amended in the Bill requires the Minister of Finance to present a report to Parliament, describing the stage of implementation of the programmed activities funded by the expenditure incurred on the activities, covered by the Annual Budget Funding Amount, and to indicate the portion of the Annual Budget Funding Amount allocated to the Ghana Infrastructure Investment Fund.
A report by Parliament’s Committee on Finance, Chaired by James Klutse Avedzi, observed that the Bill would make the Ghana National Petroleum Corporation (GNPC) an operator in the field and empower it to borrow on the strength of its own balance sheet and not to rely on central government guarantees.
By the Amendment, the GNPC will no longer have the privilege of controlling the country’s petroleum proceeds, unlike the previous arrangement where the institution had the power to receive petroleum revenues, deduct its share of the proceeds and then deposit the rest into the Petroleum Holding Fund.
Clause 2 of the amended Act, Section 7, specifies that: Revenue due from the direct or indirect participation of the Republic in petroleum operations, including the carried and participating interest, shall be paid into the Petroleum Holding Fund.”
The law stipulates that: “The Minister of Finance shall ensure that the Bank of Ghana transfers to a national oil company, the relevant portion of the petroleum revenue due to that national company, under subsection (2) (a) and (2) (b) not later than three working days after the receipt of petroleum revenue into the Petroleum Holding Fund.”
Dr Anthony Akoto Osei, MP for Old Tafo and Minority Spokesperson on Finance cautioned that in as much as the bill empowered the GNPC to borrow on its own balance sheet, it was important that the provisions held the management of the corporation accountable.
“We should empower them to stand on their feet on one side but we should also hold them to account,” he said.