The Public Interest and Accountability Committee (PIAC) has called on the government to review and reduce the planned 2020 Annual Budget Funding Amount (ABFA) expenditure and apply the savings to the COVID-19 Alleviation Programme.
The Committee has recommended to the government to explore other domestic revenue sources such as cocoa and minerals, given that these sectors were still in active operation.
This was contained in a statement signed by Mr Noble Wadzah, Chairman, PIAC and copied to the Media in Accra.
Mr Ken Ofori Atta, the Finance Minister on March 30, asked Parliament to amend the Petroleum Revenue Management Act (PRMA), to allow the government to access the Heritage Fund to help in the fight against the new coronavirus pandemic.
The statement said PIAC supported the use of part of the Stabilisation Fund for COVID-19 but was against the utilisation of the Heritage Fund for COVID-19.
“PIAC is calling for a balance in allocating funds to the budget, adding that the Sinking and Contingency Funds, as skewed withdrawals towards debt servicing have not prepared the country for national emergencies”, it said.
The Committee said even though the Health Sector was a priority area for ABFA expenditure, the pandemic had reinforced the critical nature of the Sector, with its interconnections to economic development, national security, food security, and the survival of the citizenry.
The statement urged the government to review allocations to the sector vis-à-vis allocations to other priority areas such as roads and rail, education and agriculture.
It said the Committee’s position in the statement was informed by its mandate under Act 815, to provide independent assessment on the management and use of Ghana’s petroleum revenues; by adhering to the principles and philosophy that informed the passage of the PRMA.
According to the Committee, there have been previous attempts by successive governments to access the Heritage Fund for various reasons, to which PIAC objected, adding that the Committee’s position was consistent with its understanding of the spirit of the PRMA on the management and use of the Ghana Heritage Fund.
The statement said the government’s search for resources to address the economic impact of the COVID-19 pandemic was in the right direction.
It said PIAC observes with interest, government’s intention to lower the cap on the Ghana Stabilisation Fund (GSF) to US$100 million to use the excess for contingency purposes.
The statement said governments over the years have made limited petroleum revenue transfers to the Contingency Fund thereby depriving it of the needed resources for addressing emergencies such as the COVID-19 pandemic.
The GSF is meant for shoring up the ABFA in times of budget shortfalls, providing for contingency, and debt servicing. However, withdrawals from the GSF over the years have been heavily tilted in favour of debt servicing, as against a balance between the budget, debt servicing, and contingency purposes.
It said the Heritage Fund received only nine per cent of the country’s petroleum revenues in a given fiscal year, which makes available a whopping 91 per cent of petroleum revenue for government spending.