Government used 63% of the 70% Annual Budget Funding Allocation, ABFA, which is the income from Ghana’s crude oil production to procure goods and services, while only 37% was used for capital expenditure.
This is contained in the 2017 mid-year report of the Public Interest and Accountability Committee, PIAC, launched in Takoradi on Tuesday also added that Ghana exported 58,658,063.54 barrels of crude oil from the three production fields in 2017.
The PIAC report, which is her seventh, queried why only 37% of the ABFA fund was used for capital expenditure, less than the stipulated 70% as stated in the Petroleum Revenue Management Act, PRMA, whilst 63 per cent was used for the procurement of goods and services.
According to the report, Ghana’s crude oil from the Jubilee Field was sold at an average price of US$54.43/bbl., which compares favorably with the average daily Brent price of US$54.25/bbl., as well as the average price of all the other partners (Tullow: US$54.20/bbl.; Anadarko: US$53.84/bbl.; Kosmos:US$53.73/bbl.)
Ghana’s crude from the TEN Fields achieved an average price of US$51.92/bbl., falling behind both the estimated benchmark price and the average dated.
The Jubilee Partners however were able to sell a portion of their liftings at a higher price mainly as a result of respective marketing strategies and hedging policies of their parent companies, with Kosmos and Tullow plc realizing a unit price of US$57.82/bbl. and US$58.30/bbl. respectively.
There was no lifting from the SGN field by the Ghana group due to GNPC’s inability to meet its financial obligations to the joint venture partnership.
Total petroleum receipts paid into the Petroleum Holding Fund (PHF) in 2017 was US$539,832,157.44. Additionally, an amount of US$579,278.46 was earned as interest on undistributed funds held in the petroleum holding fund during the period under review.
An amount of US$99,658.80 earned as premium on the sale of the Ghana group’s second lifting from TEN is yet to be transferred to the PHF from GNPC. An amount of US$13,518,852.98 wrongfully paid into Ghana Revenue Authority, GRA, account during the period is yet to be transferred back to the PHF as required by law.
Ghana National Gas Company, GNGC, received raw gas worth US$94,776,691.97 from GNPC during the year for which payment is outstanding. VRA received lean gas worth US$279,910,118.08 from GNGC, which has not been paid for yet thereby incurring an interest of US$16,737,531.29.10. An amount of GH₵332.29 million of the ABFA ₵736.03 million allocation was utilized, leaving GHC403.74 million unutilized as at the end of 2017.
When added to the 2016 balance of GH¢77.73 million, total ABFA brought forward to 2018 stands at GH¢481.47 million. Out of the amount utilized from ABFA, GH₵202.38million (61%) was spent on education; GH₵49.07million (3%) on agriculture; GH₵41.62million (12%), on road, rail and other critical infrastructure; GH₵29.22million (9%)on GIIF; GH₵8.66million (3%) on health; and GHC₵1.35million (0.4%) on PIAC and other statutory institutions.
By Adu Koranteng