Ghana’s oil revenue not managed efficiently – Report

The exercise of discretionary power by the Minister of Finance in the selection of projects that are financed by oil revenue must be curtailed, Mr Mohammed Amin Adams, Executive Director of Africa Centre for Energy Policy, said on Wednesday.

Speaking at the launch of a report on oil revenue management in the past two years, Mr Adams said leaving the choice of projects in the hands of the Minister of Finance could provide room for politically selected projects.

Besides, he said, the constitution requires persons exercising discretion apart from a judge to publish by constitutional instrument regulations to govern the exercise of those powers.

Consequently, Mr Adams asked the Minister of Finance to comply with the provisions of the Constitution before the presentation of the 2014 Budget and Policy Statement of the government to Parliament.

On the findings of the report dubbed: “How a good Law May Not Stop Oil Money from Going Down the Drain,” Mr Adams said the findings generally show that oil revenues have not been managed efficiently so far as projects evaluated are concerned.

This, he said, were due to many factors, including poor project selection, project delays, operational lapses and low absorptive capacity as a result of high social and economic cost of investments.

For example, Mr Adams said in the past two years allocation of the annual budget funding to some of the expenditure items did not demonstrate significant allocation efficiency.

“Ghana is not deriving value for money from the infrastructure projects funded with oil and gas revenues as most of the projects have been delayed, operating under costly extensions and leading to cost over-runs,” he said.

Mr Adams said there was the urgent need for a Fiscal Responsibility legislation to ensure that management of public resources are guided by predictability, credibility and transparency as government continues to borrow more against future oil and gas revenues.

Source: GNA