An oil revenue management report has recommended the introduction of a Public Investment Management Plan (PIMP) to guide the efficient management of oil and gas revenues.
It said projects funded from loans collateralised against future oil and gas revenues must be guided by transparent procurement processes and set strict time lines for the completion of those projects.
“The need for PIMP cannot be delayed any longer. There must be value for money audits on all projects funded with oil and non-oil revenues as condition precedent to the release of funds. While equity considerations are important in the distribution of public investments, such considerations should not override efficiency,” the Executive Director of the Africa Centre for Energy Policy (ACEP), Mr Mohammed Amin Adam, said in Accra.
The ACEP report, “The Two Sides of Ghana – How a Good Law May Not Stop Oil Money from going Down the Drain,” was to track the disbursement of Annual Budget Funding Amount (ABFA); assess the quality of projects funded from oil revenues; provide platform for citizens to monitor the spending of oil revenues; and increasing public awareness of the spending of oil revenues to improve public accountability.
Mr Adam said the objective of oil revenue was to improve on the quality of life of the citizenry, and therefore, it was not too early to begin to question how the revenue was being spent three years since production began.
He said Ghana was noted for passing excellent laws and that our oil and gas law Act 815 was seen worldwide as one of the best and a determination to manage revenue efficiently and transparently. However, implementation had been a challenge.
He noted that the oil and gas discovery had brought along with it some challenges in the economy.
He said Ghana was not deriving value for money from the infrastructural projects funded with oil and gas revenues as most of the projects had been delayed, operated under costly extensions and led to cost over-runs.
“The findings from the analysis generally show that oil revenues have not been managed efficiently as far as the projects evaluated are concerned. This is due to multiple factors, including, but not limited to poor project selection, project, project delays, operational lapses, and low absorptive capacity as a result of high social and economic cost of investments,” he said.
In 2011, the oil revenue received by the government was US$444 million and US$541 million in 2012, figures Mr Adam said were reflective of the fiscal terms Ghana negotiated with partners.
He said it was important that we continued to monitor oil revenues and not wait until so much harm had been done.
By Ama Amankwah Baafi/Daily Graphic/Ghana
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