Gh₵1.5 Billion Petroleum Revenues To Fuel 2018 Budget
| Updated Dec 06, 2017 at 6:07pm
Government has projected to spend GHȻ 1.5 billion Ghana Cedis of Petroleum revenues to support the 2018 budget.
This is in accordance with the dictates of the Petroleum Revenue Management Act, PRMA.
The PRMA requires that not more than 70 percent of Government’s net petroleum receipt is allocated to support the annual budget and not less than 30 percent is assigned to the Ghana Petroleum Funds.
The 2018 Budget Statement and Economic Policy of Government themed: “Putting Ghana Back to Work” has been okayed by the law makers after weeks of deliberation.
Out of the figure Gh₵463,913,085 will be expended on goods and services while Gh₵1.08 billion will be spent on capital expenditure.
The estimated Annual Budget Funding Amount, ABFA allocations will be used to finance projects under the four new priority areas and also support the Public Interest and Accountability Committee PIAC to undertake its operations in 2018.
The four priority areas are: Agriculture, Physical Infrastructure and Service Delivery in Education, Physical Infrastructure and Service Delivery in Health as well as Road, Rail and other Critical Infrastructure Development.
Under Agriculture, the Ministry of Food and Agriculture has been allocated Gh₵249,465,991 for one of government’s flagship programmes, ‘Planting for Food and Jobs.’
Gh₵3 million has been earmarked for Goods and Services while Gh₵246,465,991 will be spent on Capital Expenditure in 2018.
Even though irrigation infrastructure, rehabilitation of warehouses with silos with Labs by NAFCO and counterpart fund requirement under the Agriculture Sector Investment Programme were listed as projects to benefit from the petroleum revenues in 2018 no amount was allocated to them.
Still under Agriculture, the Ministry of Fisheries and Aquaculture Development is to utilize Gh₵2 million on Fisheries and Aquaculture Inputs and Infrastructure as Capital Expenditure.
The two Ministries will therefore spend Gh₵251,465,991 of ABFA allocations next year.
Physical Infrastructure and Service Delivery in Education has been allocated Gh₵465,913,085. Out of the figure, Ministry of Education is to spend Gh₵10 million as Capital Expenditure on Education Infrastructure. Gh₵455,913,085 will be appropriated for Goods and Services for the flagship Free SHS programme which is under the Office of Government Machinery.
Gh₵50 million will be used to finance Capital Expenditure under the Physical Infrastructure and Service Delivery in Health.
Road, Rail and other Critical Infrastructure Development Priority Area has been assigned Gh₵773,997,875. Out of that amount, the Ministry of Roads and Highways will utilize Gh₵200 million as Capital Expenditure on Road Infrastructure while the Ministry of Special Development Initiatives will undertake an Infrastructure for Poverty Eradication Programme with Gh₵423,997,875 allocation. The Ministry of Railways Development will also spend Gh₵150 million on rail infrastructure.
The Public Interest and Accountability Committee, PIAC has been granted Gh₵5 million for its operations for the 2018 fiscal year.
All these estimates may not be achieved if Petroleum prices fall below the projected figure. The crude oil Benchmark price for 2018 has been pegged at US$57.3642 per barrel while gas Benchmark price is US$3.94 per mmbtu. Crude oil production forecast for 2018 from Jubilee, TEN and SGN is 63.36 million barrels.
“The 2018 total petroleum revenue is projected at US$669.41 million. Of the total projected petroleum receipts of US$669.41 million, the Benchmark Revenue is US$335.86 million. Of this amount, the Annual Budget Funding Amount is projected at US$235.10 million and the Ghana Petroleum Funds is projected to receive US$100.76 million. Of this amount the Ghana Stabilization Fund will receive US$70.53 million, while the Ghana Heritage Fund receives US$30.23 million.” Ken Ofori Atta Minister of Finance
An amount of GHȻ796.32 million of the ABFA allocation was programmed for utilization in 2017, of which, GHȻ238.89 million and GHȻ557.42 million were allocated for Goods and Services and Capital Expenditure, respectively, however from January to September GHȻ 265,283,812.64 was spent.
In 2016 GHȻ388.85 million was utilized on ABFA priority areas lower than the budgeted amount of about GHȻ 591.552 Million.
The issue with the ABFA allocations in the budget over the years has been the generic statement without naming the specifics projects. For example the GHȻ50 million earmarked for Capital Expenditure under the Physical Infrastructure and Service Delivery in Health, what projects will receive this amount? Will the money be spent on ongoing projects or new projects?
Apart from some changes in the priority Areas it seems there is no departure from the way the ABFA was utilized in the past where the money is spread thinly on projects.
Story By: Dominic Hlordzi