Pass Regulation on Petroleum Revenue – ACEP
The Africa Centre for Energy Policy (ACEP), has called on government to pass a regulation for the Petroleum Revenue Management Act (PRMA)
In its analysis of the 2019 budget statement and economic policy of government issued on Wednesday, the policy think tank said the regulation should be passed to check the deliberate use of oil revenue for debt servicing at the expense of public investments.
The PRMA Act of 2011, Act 815 provides the framework for the collection, allocation and management of petroleum revenue in a responsible, transparent, accountable and sustainable manner for the benefit of Ghanaian citizens.
However, the Act has no regulation backing it.
ACEP in its analysis observed that the expectation of the PRMA for prioritizing public investment is being eroded by attempts to push more money for debt servicing.
They believe that passing the regulation would define rules for capping the Ghana Stabilization Fund (GSF).
“This will bring clarity to the basis for capping and remove perceived discretionary powers of the Minister in the treatment of oil revenues and the GSF,” the statement read.
Also, the policy think-tank urged the finance Ministry to ensure that existing infrastructure projects yet to be completed are adequately funded by the Annual Budget Funding Amount (ABFA).
This according to them, would prevent encumbrances of utilized ABFA.
“Fully utilizing ABFA will prevent time and cost overruns of existing uncompleted projects,”
Suspend VRA Thermal Plant
Meanwhile, the Centre has recommended that government should suspend the sale of VRA thermal plants.
Government planned on divesting its interest in the thermal plants of VRA.
However, when sold to private companies, the Centre believes it will require additional Power Purchase Agreement with take or pay conditions.
“This will increase the surplus requirement and consequently, government’s commitment to capacity charges. Government can rather retire the plants for emergency use and allow IPPs to generate power for domestic consumption. This will ensure that the IPPs do not become idle and still get paid,” the statement read.
By: Emmanuel Yeboah Britwum