Mr Mark Evans, an economic analyst, with the Natural Resources Governance Institute, on Thursday, said Ghana\u00a0has found itself ill-equipped to manage the rapid fall in oil prices.<\/p>\n
[contextly_sidebar id=”MxBnAU4t1DlTOve3A8PdNxqcXgF1mM4U”]He said the country was not fully prepared to manage swings in commodity prices and to transform its resource revenues into meaningful development outcomes because of huge liabilities incurred in order to pay the wage bill.<\/p>\n
Mr Evans told said that in\u00a02011, Ghanaian legislators enacted important governance reforms to\u00a0manage resource extraction, having been stung by its previous\u00a0experiences as a gold producer.<\/p>\n
The Petroleum Revenue Management Act (PRMA) was meant to save\u00a0petroleum revenue from other fiscal revenues and enable\u00a0journalists, civil society groups and parliamentarians to undertake\u00a0forensic analysis of government’s management of the proceeds from\u00a0oil.<\/p>\n
It also created a framework for managing revenue volatility and\u00a0savings for the future.<\/p>\n
He noted: “The wall built into the government budget to separate\u00a0petroleum revenues did help create a huge amount of citizen\u00a0interest in the oil sector and promoted robust oversight.<\/p>\n
\u201cHowever, the last four years offer an important lesson for all of\u00a0us who have been working to promote effective and accountable\u00a0financial management in Ghana.<\/p>\n
\u201cThe benefits of enacting rules for resource revenues are lost if\u00a0the broader budget is not managed with the same aims. This is\u00a0something we should carefully consider.\u201d<\/p>\n
In Ghana, oil proceeds only contribute about eight per cent to\u00a0total government revenue.<\/p>\n
Mr Evans noted that while the government managed to save GHC1.7\u00a0billion (USD 500 million) in its petroleum funds by the end of\u00a02014, the PRMA did nothing to constraint the damaging effects of a\u00a0GHS 60 billion (USD18 billion) increase in public debt over the\u00a0same period.<\/p>\n
\u201cThe PRMA calls for a majority of annual expenditures,\u00a0officially designated as deriving from petroleum revenues, to be\u00a0directed toward public investment,\u201d he said.<\/p>\n
\u201cCapital spending on the whole has actually fallen from about 26\u00a0per cent of spending to 17 per cent \u2013 since oil production began,\u201d\u00a0the economic analyst said.<\/p>\n
He said organisations such as the Institute of Economic\u00a0Affairs, the Africa Centre for Energy Policy, the Africa Center for\u00a0Economic Transformation, along with the Bank of Ghana, had\u00a0advocated for additional fiscal rules in the management of petroleum revenue.<\/p>\n
He said in Ghana, such an approach would have the added benefit\u00a0of giving the Public Interest and Accountability Committee the\u00a0mandate to oversee key benchmarks of fiscal responsibility.<\/p>\n
He stated: \u201cHowever, Ghana could benefit from enshrining fiscal\u00a0limitations in legislation. A limit on recurrent expenditure growth\u00a0or the fiscal deficit would have made the problematic increases in\u00a0spending in 2012 a breach of the law.<\/p>\n
\u201cWhile this would not be a foolproof method against the\u00a0recurrence of such problems, it could help focus minds on these\u00a0fiscal issues and can serve as a catalyst for much-needed fiscal\u00a0reform and consensus building.\u201d<\/p>\n
Mr Evans advised that \u201cGhana must carry the spirit of good fiscal\u00a0governance embodied in Petroleum Revenue Management Act over to the\u00a0broader budget.\u201d<\/p>\n
–<\/p>\n
Source: GNA<\/p>\n","protected":false},"excerpt":{"rendered":"
Mr Mark Evans, an economic analyst, with the Natural Resources Governance Institute, on Thursday, said Ghana\u00a0has found itself ill-equipped to manage the rapid fall in oil prices. [contextly_sidebar id=”MxBnAU4t1DlTOve3A8PdNxqcXgF1mM4U”]He said the country was not fully prepared to manage swings in commodity prices and to transform its resource revenues into meaningful development outcomes because of huge […]<\/p>\n","protected":false},"author":24,"featured_media":74242,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[4],"yoast_head":"\n