Political strategies

PIAC offers strategies for sustainable investment of oil revenues

PIAC Presentation on Management and Investment Strategies

The Public Interest and Accountability Committee (PIAC), a body tasked with ensuring transparency and accountability of Ghana’s oil revenues, has raised red flags over revenue enforcement by successive governments.

The Committee said, for example, that successive governments have used oil revenues to solve too many national problems at once, thus undermining the potential impacts of oil revenues on Ghana’s socio-economic development.

Ghana had reaped $7.36 billion in oil revenue by the end of December 2021. The amount included oil revenue from 2011 to 2021.

Mr. Isaac Dwamena, member of PIAC, said so in his presentation on management and investment strategies for utilizing the amount of funding from the annual oil revenue budget, at a workshop in Accra.

However, he said, because governments used the funds to tackle so many projects at the same time, some of these projects were not completed, so Ghanaians were not getting the most out of them. profits from oil revenues.

“I can tell you that sometimes oil revenues are used to tackle 4,000 infrastructure projects in a year and so when things like this happen it is very difficult to complete them and we don’t get the expected benefits,” Mr. Dwamena said.

The absence of a national development plan has forced each government to select projects based on its party’s manifesto and this has not helped to ensure coordinated development of the country, he said.

“There is also a weak project monitoring mechanism, which leads to many projects being blocked and even relocating affected projects due to poor communication from the implementing agency.”

Mr. Dwamena lamented the lack of consultation and involvement of stakeholders and beneficiaries in the selection and awarding of projects, thus creating ownership issues at the end.

“When PIAC was doing its normal monitoring of oil revenue funded projects, we went to some assemblies and inquired about the contractors implementing certain projects, and some of the assemblies were totally unaware of the existence of this contractor because the contract was awarded to Accra without their involvement,” he said.

Mr. Dwamena said PIAC believed that the government should ensure a strong monitoring and evaluation plan that includes responsibility disaggregated between national and sub-national structures to improve oversight and monitoring of oil revenue-funded projects.

“PIAC believes that few legacy projects should be identified and supported by oil revenues to carry them out.”

“Ghana needs a long-term national development plan to guide the spending of oil revenues.

Mr. Joseph Sarpong, Head of Energy and Petroleum Unit at the Ministry of Finance, responding to concerns raised by PIAC, said that the country’s development challenges were many, hence the government used oil funds to help solve them.

Besides, the projects were selected based on government policy and on technical grounds, he noted.

He said the Petroleum Revenue Management Law required the government to select four priority areas, apply petroleum revenue wisely and review its performance every three years.

He mentioned roads and railways, health facilities, clean water and sanitation, public safety and security, education (free SHS), modernization of agriculture, science and technology as well as alternative energy sources as some of the priority areas that the government has used petroleum funds to tackle. .

However, Mr. Sarpong undertook to alert his superiors to the concerns raised by PIAC for redress.

Mr. Tijani Ahmed Hamza, the Country Director of OXFAM, expressed the belief that one of the indicators of a “just economy” was when the wealth and income generated by the state was fairly distributed.

In addition, revenues from extractive industries must be used transparently and responsibly for the benefit of the people, he said.

“We think it’s important because oil revenues have a better chance of helping people, but only if we’re circumspect and apply them as part of an investment plan that spans different governments and is devoid of frequent partisan political control for personal gain.”

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