According to PIAC, the Petroleum Investment Advisory Committee has been deactivated since the change of government in 2016.

A senior member of the Committee, Dr. Thomas Kojo Stephens, brought this to the fore in a presentation on the 2017 Semi-Annual Report on Ghana’s oil resources management.

This was a three-day workshop sponsored by the German Development Cooperation (GIZ), under the auspices of the Institute of Economic Journalists (IFEJ), in the Eastern Regional capital, Koforidua.

Among other recommendations, Dr. Stephens reiterated the need for government to expend the oil revenue on the four priority areas of agriculture, education, health, road and infrastructure.

He said Ghana produced 218 million barrels of oil between 2010 and 2017, and emphasized the need for social auditing and accountability.

Vice President of PIAC, Kwame Jantuah, implored local Journalists to religiously study the Petroleum Revenue Management Act as a means of holding policy makers accountable for the oil revenue disbursements.

He reaffirmed the PIAC’s commitment to constantly keep government on track to ensure value for oil funded projects.

The GIZ Ghana Country Director, Alan Walsch, hinted of more field visits in 2018 to track all oil funded projects.

He bemoaned the mainstream media’s concentration on the oil sector to the neglect of the mining sector and called for a paradigm shift.

In a presentation on government’s newly signed Exxon Mobil agreement, an outspoken member of the PIAC, Dr. Steve Manteaw said the deal was not transparent enough.

“The Exxon Mobil deal like many other types of investments will bring jobs, taxes, more crude, maybe more investments and maybe economic development,” he anticipated.

He however posited that the citizens should be cautiously optimistic of the deal saying, “The default position of the law in respect of licensing was not followed and the notice of negotiations did not provide convincing basis for the direct negotiations.”

“Direct negotiations were relatively opaque and Ghana’s regulatory institutions are not matured enough to handle big players,” he revealed.

Dr. Steve Manteaw underscored the need for parliamentary vigilance and effective oversight responsibility over the agreement’s finality.

He charged the media to create enough awareness and galvanize the citizens to determine the best deal for Ghana.

He further advocated a depoliticization of appointments to the Petroleum Commission to strengthen corporate trust.

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By: Abdul Karim Naatogmah/citifmonline.com/Ghana

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While industry has wholly welcomed the move, some industry analysts have cautioned against the outstanding debts facing institutions involved in the supply of gas.

Citi Business News spoke to a couple of players involved in the sector and their perspectives have been backed with strong arguments which suggest possible ways that the government could use to ensure maximum benefit of its intended program.

President Akufo Addo first mentioned the reduction at the Commissioning of the Twyford ceramics factory at Shama over the weekend.

Per the reduction, businesses would buy a million British Thermal Units of gas at 6 dollars 50 cents, down from the 8 dollars 84 cents.

This also translates into some 26 percent reduction.

For industry, this is pleasant news as it will ultimately reduce the cost of power hence their operational costs.

The CEO of the Association of Ghana Industries (AGI), Seth Twum Akwaboah said,

“The reduction is good for businesses and it has positive impact on the cost of electricity and therefore reducing the cost of production and we consider that to be important for businesses and I also like the President’s emphasis on industrial consumers.”

But the Executive Director of KITE, Ishmael Egyekumhene and the Vice Chairman of the Public Interest and Accountability Committee (PIAC), Kwame Jantuah share divergent views on the immediate benefits of the move.

Mr. Egyekumhene explained possible reasons for the reduction as, “There is a foundation volume of gas that the Jubilee partners give to the government at no cost but in the build-up, GNPC actually charges Ghana Gas for the gas supplied.”

Mr Jantuah believes otherwise as he argues that, “It sounds like the government is trying as much as possible to satisfy Ghanaians through words but the government needs to be clear and explain to the people that for certain reasons, they will be able to reduce gas rates by a certain percentage.”

VRA indebted to Ghana Gas

According to the semi-annual report of the Public Interest and Accountability Committee, for 2017, VRA owed Ghana Gas to the tune of 107.18 million dollars with interest.

Ghana Gas in turn also owed GNPC to the tune of 132.03 million dollars.

A situation analysts believe requires pragmatic solution to turnaround the fortunes of the companies.

Regarding the use of the energy bond to settle the debts, Mr. Ishmael Egyekumhene and Kwame Jantuah had these to say.

“The debt that VRA is owing to Ghana Gas, those debts must be cleared because the country would have to pay the loans that it secured to build the gas processing plant,” Mr. Egyekumhene stated.

The PIAC Vice Chairman also maintained, “Let’s make sure that we pay these debts once and for all so that everybody knows the state of the companies involved. I am not too happy with the fact that we are playing yo-yo with tariffs. We cannot do that at all!”

Meanwhile, the AGI is optimistic that the affected institutions should put in place mechanisms to absorb them from any potential shock due to the reduction.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

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According to the Public Interest and Accountability Committee (PIAC), even though the ABFA received some GH¢358.41 million for the first half of the year, the government spent just GH¢53,136,951 or 15 percent of the amount.

The issues were disclosed as part of PIAC’s findings in its Semi Annual report for 2017.

The Annual Budget Funding Amount is the component of the oil revenue that is allocated for the Finance Ministry to be spent on some identified key priority areas.

For this year, government is seeking to spend the ABFA on five key areas.

They include agriculture; road, rail and other critical infrastructure; PIAC as well as physical infrastructure and services in both the health and education sectors.

But expenditure took a different turn as GH¢17,916,586 or 4 percent was spent on agric.

This involved the development of irrigation infrastructure, construction of Fisheries College in Anomabo, and counterpart funding for the Northern Rural Growth Programme.

Also, only 6 million cedis or 1.7 percent was spent on physical infrastructure and services in education.

Even though an additional 29 million cedis went into the Ghana Infrastructure Investment Fund, there was no further transfer to the road and railway sectors.

Meanwhile for the first six months of the year, no allocations were made to physical infrastructure and services in health and PIAC.

It is unclear what may have led to the under expenditure.

But PIAC wants the Finance Minister, Ken Ofori Atta to abide by the provisions of the Petroleum Revenue Management laws and update Parliament on the progress of the selected priority areas to ensure conformity with the law.

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By: Pius AmihereEduku/citibusinessnews.com/Ghana

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According to a member of PIAC, Dr. Steve Manteaw, successive governments have breached the Act for seven years running.

[contextly_sidebar id=”irRV5jlgclluo8ms0PKIqY77zDbK7WpG”]The Act mandates the Finance Minister to report on all oil-funded projects in the year under review.

But Dr. Manteaw said the provision has been breached by various Finance Ministers including, Ken Ofori Atta.

“Over the period since we started producing oil in this country, the past ministers and the current Minister [of Finance] have not complied with that provision in terms of giving us update on the stage of completion of oil projects. A project inspection undertaken by PIAC recently has revealed that a lot of the projects are non-existent and those that are in existent, are deteriorating barely a year into their completion raising serious concerns about the quality of spending and value for money considerations that underpin the use of oil revenues,” Dr. Manteaw added.

Dr. Manteaw was speaking at a breakfast meeting in Parliament today, Tuesday, where he made the remarks.

PIAC needs prosecutorial powers

Some stakeholders within the oil sector had earlier called for more powers to given PIAC to prosecute persons who misappropriate Ghana’s oil revenue.

This in their estimation could empower PIAC to fully fulfill its mandate of ensuring the efficient management of the nation’s petroleum revenues for sustainable development.

About the Petroleum Revenue Management (Amendment) Bill, 2015

Parliament in 2015 passed the Petroleum Revenue Management (Amendment) Bill, 2015 into law.

The Bill amended an existing Act to provide for the allocation of Funds for the Ghana Infrastructure and Investment Funds, address some issues with the Ghana Stabilization Fund, the benchmark revenue projection, and further empower the Ghana National Petroleum Company (GNPC) to become a commercial entity and a strong operator in the oil and gas sector.

The law was expected to also provide a legal framework for the collection, allocation and management of petroleum revenue in a responsible, transparent, accountable and sustainable manner for the benefit of Ghanaians in accordance with Article 36 of the 1992 Constitution.

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By: Godwin Akweiteh Allotey/citifmonline.com/Ghana
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The workshop, organized in Koforidua, was spearheaded by the Institute of Financial and Economic Journalists (IFEJ), and sponsored by the German Development Cooperation (GIZ).

[contextly_sidebar id=”qZvF3Ne6aYdgDtnzNxxwnv1XMLM5sEUa”]It was meant to track the progress made on some oil revenue funded projects in some selected regions as follow-ups to the Public Interest And Accountability Committee’s (PIAC) field visits.

The event offered competitive teams the opportunity to give an account of some sparingly spread oil revenue funded projects in the Volta, Northern, Upper East and West, Ashanti, Eastern, Western and Greater Accra Regions.

The presentations focused on oil-funded projects in the agriculture, education, roads and highways sectors.

It emerged that whopping sums of the oil revenue released for the construction of several projects were diverted, whilst some of the projects have stalled.

It was against this backdrop they insisted that government has to rethink its oil revenue disbursement strategy to ensure value for money on some earmarked projects.

They further advocated the need for a direct linkage between oil revenue funded projects and their impact on residents of the selected beneficiary communities.

They also called for forensic audit of oil funded projects as a means of reprimanding plunderers.

A senior technical adviser of GIZ good governance programme, Alan Larsey, took a swipe at the PIAC for reneging on its civic responsibility.

According to him, much was desired of the PIAC to hold managers of the nation’s oil revenue accountable to the citizenry.

An outspoken member of the PIAC, Dr. Steven Manteaw, bemoaned the mode of selection of institutional representation on the PIAC, saying, “PIAC should discharge its duties without fear or favour.”

He posited that in many instances, some members of PIAC are self-imposed, hence the Committee’s inability to independently discharge its mandate in line with the purpose of its establishment.

Dr. Steve Manteaw admonished the media to constantly highlight some imperfections on the disbursement of oil revenue for funding some earmarked projects.

A founding member of IFEJ, Lloyd Evans, lauded the teams’ presentations.

He disclosed the organization’s intention to organize a grand workshop that will bring together ministers, parliamentarians and other major stakeholders to brainstorm and proffer solutions to the misappropriation of oil revenue.

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By: Abdul Karim Naatogmah/citifmonline.com/Ghana

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In 2011, when commercial production commenced, the country received $444.12 million in 2012 and $ 541.62 million and $846.77 million in 2013 and 2014 respectively.

The country recorded the highest oil revenue in 2014, with $978,02 million, but recorded a sharp decline in 2015, in the sum of $ 396.17 million.

The amount dipped further in 2016 recording $ 247.18 million.

This was captured in the 2016 Public Interest and Accountability Committee (PIAC) report.

PIAC in the report attributed the low revenue in 2016 to the decline in petroleum production which it said was caused by a 34-day shutdown of the Jubilee Field for maintenance from March 31 to May 3, 2016.

Below is an infographic summarizing Ghana’s oil revenue since 2011:

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By: Godwin A. Allotey & Melvin M. Clottey/citifmonline.com/Ghana
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The post Ghana’s petroleum revenue hits all-time-low in 2016 [Infographic] appeared first on Citi 97.3 FM - Relevant Radio. Always.

This came to light at a three-day workshop on interrogating the 2016 Annual PIAC report spearheaded by the Institute of Financial and Economic Journalists (IFEJ) and sponsored by the GIZ.

It is against this backdrop that the participants there supported calls for PIAC to have prosecutorial powers.

This in their estimation could empower PIAC to fully fulfill its mandate of ensuring the efficient management of the nation’s petroleum revenues for sustainable development.

PIAC’s Vice Chairman, Kwame Jantuah reiterated the committee’s mandate to exhibiting high integrity and remaining independent of governmental dictatorship on the oil revenue management.

According to him, PIAC is directly funded by the Annual Budget Funding Amount (ABFA) which feeds into the national budget.

He quoted Ghc38.08 amount of the ABFA which was spent on capacity building as part of PIAC’s 2016 activities.

He grieved over the minimal impact of monies allocated for agriculture modernization as part of the four priority areas of the oil revenue funded projects.

He admonished successive governments to invest the nation’s oil revenue in profitable areas that will generate high returns in terms of added value.

Kwame Jantuah disclosed that the stabilization and heritage funds could be merged to establish the sovereign wealth fund when there is depletion of the nation’s oil resources.

He reaffirmed PIAC’s determination to partner with the media to keep track of oil revenue disbursement as means of promoting social auditing and accountability.

VRA’S indebtedness to Ghana Gas 

Dr. Steve Manteau in a presentation revealed that the Volta River Authority owed the Ghana National Gas Company (GNGC) $340.49 million as at June 2016.

He attributed the colossal debt to large scale power theft and government agencies failure to promptly pay electricity tariffs.

He explained the merits and demerits of listing the VRA and the Electricity Company (ECG) on the Ghana Stock Exchange.

He cited the legacy debt, energy recovery levy and the petroleum holding account at the Bank of Ghana as some of the financial compartments of the nation’s oil revenue mobilization.

GNPC’s allocations and expenditure
PIAC vice Chairman, Kwame Jantuah again dealt with that topic and recommended that Parliament must ensure a practice whereby GNPC will be requested to release parts of its allocations from petroleum receipts to government or its agencies without prior approval from Parliament.

He added that government must deists from directing GNPC to provide guarantees to other state-owned entities such as the Tema Oil Refinery (TOR) and the Bulk Oil Storage and Transportation (BOST).

He further advocated that government should ensure the recovery of payments already made as a result of the inability of state institutions to pay the transactions which GNPC guaranteed.

Dissolving statutory Boards
Ghana Academy of Arts and Sciences representative on PIAC, Professor Albert Fiadjoe bemoaned political equalization in the area of dissolving statutory Boards after transfer of political power.

He observed that the phenomenon continually affected the nation’s transformational agenda.

Professor Albert Fiadjoe thereby tasked successive governments to decouple public service appointments from political appointments.

Critique of PIAC’s 2016 Semi-Annual Report
Head of Finance Department of the University of Cape Coast, Dr. John Gatsi highlighted some missing critical considerations expected to complete PIAC’s 2016 Semi Annual report.

He stated that PIAC’s previous reports served as reference documents in the universities where petroleum management courses are pursued.

He called for enough hard copies of PIAC’s annual reports to stockpile university libraries.

Commenting on the transfers and performance of the Ghana Petroleum Funds, Dr. John Gatsi posited that the Semi-Annual report was in line with the Petroleum Management Act (815) but failed to indicate some important issues to the public.

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He explained that the risks associated with such practice could shortchange the nation’s petroleum revenue.

He thus called for a price stabilization mechanism in tandem with transparency provisions enshrined in the nation’s petroleum laws.

Dr. Steve Manteaw raised these concerns when he presented a paper on the 2016 Semi Annual Report dubbed, “International crude prices and jubilee achieved prices.”

This was at the beginning of a three-day workshop on interrogating the 2016 Annual Public Interest and Accountability Committee (PIAC) report spearheaded by the Institute of Financial and Economic Journalists (IFEJ) and sponsored by the GIZ.

Dr. Steve Manteaw posited that excessive political interference continued to affect the profitability of commercial state owned enterprises including the Ghana Oil Company (GOIL).

He thus advised successive governments to discontinue the phenomenon of sacking Chief Executive Officers of state owned enterprises whenever there is change of political power.

He commended government for rescinding its decision to fund the flagship “Free Senior High School” policy with the Heritage Fund.

He underscored the need for government to always listen to the populace outcry on controversial issues likely to make President Nana Addo Dankwa Akufo Addo’s administration unpopular.

Some selected Journalists across the country were schooled on topics such as Ghana National Petroleum Company’s allocations and expenditure, levels of compliance of the Petroleum Revenue Management Act and Volta River Authority’s indebtedness to the Ghana National Gas Company.

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By: Abdul Karim Naatogmah/citifmonline.com/Ghana

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Speaking on Eyewitness News, Mr. Winful indicated that, the fund had less than $300 million, while some analysts say the free SHS policy could cost the country GH¢3.6 billion yearly.

[contextly_sidebar id=”BWxlZiNsMS1CZQyWTxIfp9ow7BiWW3lX”]“The amount is less than $300 million and the interest is not that significant so even if you exhaust the whole thing with its interest, the amount may not suffice for that type of expenditure,” the PIAC Chairman said.

This follows reports that the New Patriotic Party (NPP) government could review the Petroleum Revenue Management Act to allow for the use of the Heritage Fund to finance its free SHS policy.

He noted that, the rationale behind the Fund, is to ensure some security for the country’s future generations, hence dipping into the Fund will require a repeal of the Petroleum Revenue Management Act.

Section 10 (1) of the Petroleum Revenue Management Act, 2011 (Act 815), established the Heritage Fund, which is supposed to serve as an endowment for future generations, and which cannot be touched unless after 15 years of its establishment.

Mr. Winful indicated that, PIAC would be unhappy with any attempt to amend the law just allow money to be drawn from the fund.

“I would have thought that putting the provision of 15 years in will give us the grace to make sure that we accumulate sufficiently and then we have adequate resources. I would be disappointed and I am sure members of PIAC will be disappointed too if we immediately start amending our laws not for the improvement of it; but in order to dip our hands into it, because already we are concerned about the effective management of the petroleum revenues.”

PIAC awaiting government’s move

Despite the hints government may review the Petroleum Revenue Management Act to allow for the use of the Heritage Fund to finance its free SHS policy, Mr. Winsome said PIAC was awaiting more concrete indications from government before it takes any action.

He suggested that perhaps, Mr. Osafo-Maafo, the Senior Minister, may have been misquoted or was just playing politics.

“We will wait until the action is actually initiated in order to have these provisions amended before we will come out to meet and discuss what we have to say or will have to present to the authorities. We believe that there is political talk and exact talk…We don’t know if this is a statement that came in or the honourable minister was misreported or misquoted.”

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

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About $ 9.5 million would be required for the successful implementation of the five-year strategic arrangement, which served as a framework for the Committee to prioritize its actions and evaluate its performance.

“This strategic plan, the institution’s first, has been developed to ensure continued success for the operations of PIAC in fulfillment of its core mandate,” Professor Paul Kingsley Buah-Bassuah, an immediate retired Chairman of the Committee said at the launch on Wednesday.

The plan has five key components seeking to strengthen internal structures and operations of PIAC to create conditions for sustainable resource mobilization.

It also seeks to improve visibility of the Committee, create platforms for effective citizen engagement and build strategic partnerships and institutional linkages.

“I want to reiterate here that the pursuit of these goals would require that we continually assess the well-being of our institution, while simultaneously holding true to our core values”” Prof Buah-Bassuah said.

He said the plan committed the Committee to continue to improve the collection, validation and analysis of data by engaging stakeholders in the petroleum industry.

“It is expected that, such a system will remove possible bottlenecks,” he said, including timely acquisition of information from stakeholders in the compilation of reports.

“It also seeks for a change in addressing the manpower needs of the institution, he added.

In order to accomplish the goals, Prof Buah-Bassuah said PIAC would still need some funding support from development partners and all stakeholders.

“The implementation of this plan will require some finances from all development partners to enable us engage a broader spectrum of the public as well as generate funds to conduct value for money audits of the projects funded from petroleum revenues.

“The implementation of our plan of action will require substantial financial outlay of about $1.9 million annually.”

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Source: GNA

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