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PIAC Got It Wrong — Gov’t


The government has described as false, a Public Interest and Accountability Committee (PIAC) claim that it breached the Petroleum Revenue Management Act (PRMA) 2011 (Act 815) in the disbursement of petroleum revenue.

According to PIAC, the government had spent more on goods and services, instead of capital expenditure, as required by the law, but the Minister of Information, Dr Mustapha Abdul-Hamid, has denied the assertion.

In its 2017 Annual Report presented at a public forum in Takoradi last Monday, PIAC said only 37 per cent of the utilised Annual Budget Funding Amount (ABFA) was directed to capital expenditure, while other wrongful payments and activities were carried out, against the law.

But reacting to PIAC’s claims in an interview with the Daily Graphic in Accra yesterday, Dr Abdul-Hamid said the total amount utilised was GH¢332.29 million, well within the budget ceiling of GH¢796.32 million, representing about 41.7 per cent utilisation.

That, he said, was well within the allocation for the year.

He further explained that “what remains is a balance of GH¢464.02 million for 2017, which is the available balance”.

“From the foregoing, it is clear that PIAC’s interpretation of Section 41(4) of the PRMA relates to the amount spent, rather than the amount received. The law does not refer to expenditure but the ABFA in totality,” the minister said.

No breach

The minister stated that the government had, therefore, not breached the Petroleum Revenue Management Act, 2011 (Act 815), as amended.

Explaining further, he said Section 21(4) of the PRMA states that “for any financial year, a minimum of 70 per cent of the ABFA shall be used for public investment expenditures consistent with the long-term national development plan”.

That, he said, was the basis of PIAC’s argument, which the government noted was not aligned with the provisions of the law.

According to him, the 70 per cent referred to in the law was not 70 per cent of the amount spent but of the amount received as ABFA.

“Thus PIAC’s assertion that 63 per cent of the ABFA was spent on goods and services is flawed. Its analysis is based on the amount that was spent, rather than the amount received,” Dr Abdul-Hamid explained.


He said Parliament approved the ABFA for every year.

In 2017, for instance, it approved GH¢796.32 million in petroleum funds to be utilised as ABFA, of which 30 per cent was to be utilised for goods and services and 70 per cent for capital expenditure.

The minister explained further that “the Ministry of Finance received the equivalent of GH¢733.21 million, about GH¢63.11 million lower than what was provided for in the budget, due to exchange rate losses”.

He said Parliament approved GH¢211.72 million to be utilised for physical infrastructure and service delivery in education, adding: “Of this amount, GH¢202.40 million or 96 per cent of the 2017 budget allocation was spent”.

The allocation ceiling, he said, was, therefore, not breached.

Citing allocations in percentage terms for areas such as agriculture, physical infrastructure and service delivery in education, physical infrastructure and service delivery in health, road, rail and other critical infrastructure development and PIAC, the minister said “all other expenditure items, except the allocation to PIAC (which was 71 per cent), were below 35 per cent utilisation”.

“None of the allocations approved by Parliament was breached,” he stressed.

Dr Abdul-Hamid said the explanations provided from the foregoing clearly showed that the government did not breach the PRMA, as was being alleged by PIAC.

Source: Graphic Online

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