Finance Minister wrongly “creamed off” over GH₵200m from Stabilization Fund - PIAC
Posted on: 2014-Aug-07        
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The Public Interest and Accountability Committee (PIAC) has asked the Ministry of Finance to return more than GH₵200 million it withdrew illegitimately from the Ghana Stabilisation Fund.

PIAC, which was established by an Act of Parliament to monitor compliance of the Petroleum Revenue Management Act by both state and non-state institutions said the Finance Ministry “creamed off” millions of cedis from the Stabilisation Fund without Parliamentary approval.

The Act provides a framework for how monies accrued from oil exploration activities in the country should be managed.

During the presentation of the supplementary budget statement to Parliament in July this year, the Minister of Finance, Seth Terkper, reviewed the cap on the Stabilisation Fund to GH₵900,000,000 ($250 million) from over GH₵1,148,522 [$319,034,153.16] in accordance with Section 23(3) of the Petroleum Revenue Management Act.

However, Chairman of the Communications sub-committee of PIAC, Yaw Owusu Addo, said on Newsnight Thursday, although the law mandates the Minister to recommend approval to Parliament, the wording of the relevant section of the Act suggests that the capping must done “prospectively and not retrospectively”, as the Minister did in July.

“At the time the cap was recommended, funds in the Ghana Stabilisation Fund had already exceeded the cap of [GH₵900,000] US$250 million”, said Mr Addo.

PIAC also said in statement the approval of Parliament should have been sought before disbursement of the excess amount from the Stabilisation Fund.

Mr Addo stated on Newsnight: “all we are saying is that when the time came for him to cream off whatever money was above the $250 million, he should have gone to Parliament. The reason being that at the time he told Parliament he had capped the Stabilisation Fund in July through the supplementary budget when the money in the fund was in excess.”

PIAC has therefore asked the Finance Ministry to review the cap on the Fund to the original $319,034,153.16 which was also the amount existing in the Fund at the beginning of the year by restoring the amount of US$69,034,153.16 [over GH₵200 million] from subsequent proceeds of liftings in the second half of 2014.

Mr Addo said the Ghana Stabilisation Fund is a backup for budget funding, in the event of petroleum revenue shortfalls, and urged the government to stick to the law by going to Parliament before accessing it.

He said although PIAC would not be able to sanction the Finance Ministry if it fails to comply, it has played its audit role.

The Africa Centre for Energy Policy in June raised red flags about wrongful withdrawals from the Stabilisation Fund, but the Ministry denied the claims.