Business News of Thursday, 8 November 2018
Source: citinewsroom.com
2018-11-08
PIAC members addressing a press conference
The Public Interest and Accountability Committee (PIAC) is unhappy with what it describes as wrongful payment of millions of dollars meant for the Petroleum Holding Fund (PHF) into accounts of the Ghana Revenue Authority (GRA).
According to PIAC, over US$43 million was wrongfully paid into GRA account instead of PHF in 2017.
PIAC raised the concern in its 2017 annual report.
It said “three companies wrongfully paid a total of US$13,518,852.98 into GRA’s accounts and Springfield E&P’s 2016 surface rental arrears of US$30,884.25 was also wrongfully paid into GRA’s accounts.”
PIAC said despite several assurances, the monies are “yet to be transferred into the PHF as required by Petroleum Revenue Management (PRMA) Act, 2011 (Act 815) Act 815.”
“PIAC finds the recurrence of wrongful lodgment of petroleum funds into GRA accounts unacceptable. GRA must immediately transfer the accumulated funds into the PHF. The Ministry of Finance must provide guidelines to forestall similar occurrences,” the report added.
PIAC also accused the GRA and the Ghana National Petroleum Corporation (GNPC) of ‘hijacking’ monies from Ghana’s oil sector.
According to PIAC, instead of releasing the monies wrongfully paid into its accounts as stated by law, the institutions kept them in their accounts.
Unimplemented recommendations
PIAC’s 2017 annual report also showed that governments have failed to implement several critical recommendations from previous reports.
Since it was set up in 2011, PIAC has been monitoring and evaluating the management of Ghana’s petroleum revenues by the government and institutions of the State.
The latest report from PIAC indicates several recommendations have not been implemented.
PIAC, in its 2017 report, also complained that after six years of the coming into force of the Petroleum Revenue Management (PRMA) Act, 2011 (Act 815), the regulations that will help with the implementation of the law are yet to be passed, leaving the utilization of Ghana’s oil revenue in jeopardy.
PIAC recommended that the regulation should be drafted immediately for the approval of Parliament.
PIAC believes further delay in the passage of the regulations could hamper the implementation of the PRMA.
“The regulations have been developed but yet to be laid before Parliament.
Further delay in the passage of the Regulations could hamper the smooth implementation of the PRMA. For example, it’s not clear how communities impacted by petroleum activities can access compensation under Section 24 of the Act.”
Under the surface rental non-payment and arrears, PIAC disclosed that Oranto/Stone Energy has still not honoured an outstanding surface rental invoice of $67,438.36 since February 2013 despite several calls.
PIAC, in its report, revealed that GRA had said it could not locate Oranto/Stone Energy located in Angola and Mozambique.
PIAC recommended that GRA must “find and compel Oranto Energy to pay the outstanding invoice with the applicable penalties for the period during which it had been in default.”
GRA, according to PIAC, can collaborate with the relevant authorities in these jurisdictions to retrieve the money.
On Energy sector legacy debt and nonpayment of receipts from the sale of lean gas to Ghana National Gas Company (GNGC) and Volta River Authority (VRA) respectively, GNGC may well have been caught up in the vicious cycle of indebtedness of the energy sector utilities of the energy sector utilities which stood at $2.4 billion at the end of 2016.
“In 2017 alone, VRA received lean gas worth US$279,910,118.08 from GNGC, but has not paid up, incurring US$16,737,531.29 in interest to GNGC,” the report added.
“PIAC is calling for an immediate meeting between the Government, GNPC and GNGC to agree on a clear roadmap for the clearing of VRA’s indebtedness to GNGC.”
PIAC also called for transparency in the management and disbursement of the Energy Sector Levy Act (ESLA) Fund.
For instance, the Ministry of Finance should disclose how much of the seven and ten-year bonds have been utilized to clear the debts so far.
“The fifty million dollars (US$50M) was advanced by GNPC to the Ministry of Finance, which is not backed by a formal.”
On refund of the US$50 million, Special Advance PIAC urged the government to “endeavor to pay the US$50 million it took from GNPC in 2014 to help improve the capitalization of the national oil company.”