The Public Interest and Accountability Committee (PIAC) has kicked against government’s decision to use the Heritage Fund to finance the fight against the novel coronavirus pandemic in the country.
The Finance Minister, Ken Ofori-Atta while addressing Parliament on the economic impact of COVID-19 on the country called for the amendment of the Petroleum Revenue Management Act (PRMA) to allow the government to utilize portions of the Heritage Fund to combat the Coronavirus outbreak.
He also sought the support of Parliament to amend the relevant laws to lower the cap of the Stabilisation Fund from US$300 million to US$100 million to enable the government scoop the excess funds to bridge the gap created by the economic impact of the pandemic.
Although PIAC in a statement signed by its Chairman, Mr Noble Wadzah, backed government’s planned usage of “part of the Stabilisation Fund for COVID-19” it was, however “against the utilisation of the Heritage Fund for COVID-19.”
“PIAC strongly urges Government not to disturb the arrangements that underpin the PRMA,” the statement urged.
Though it commended the government’s efforts in containing the pandemic, PIAC indicated that the Heritage Fund is not supposed to be touched so as to fulfil its intended purpose in the next years to come.
The statement read, “It is worth noting that there have been previous attempts by successive governments to access the Heritage Fund for various reasons, to which PIAC objected. The Committee’s position is consistent with its understanding of the spirit of the PRMA on the management and use of the Ghana Heritage Fund (GHF) – to cater for the intergenerational ownership of the petroleum resource as well as the shared compensation on the adverse effects of petroleum extraction.”
PIAC further recommended, among other things, that “government must review and reduce planned 2020 ABFA expenditure, and apply the savings to the COVID-19 Alleviation Programme (CAP). Reduce the capital expenditure focusing on roads and infrastructure.”
About the Heritage Fund
The Heritage Fund is a creation of section 10 of the Petroleum Revenue Management Act 815 enacted in 2011.
The purpose of the establishment of this Fund is to provide an endowment to support the development of future generations when the petroleum reserves have depleted, according to Act 815 (2011) and amended Act 893 (2015).
The Fund receives a percentage of oil revenue accrued to the Petroleum Holding Fund.
In view of this Parliament of Ghana pegged this figure at 9%. This means that out of the total oil revenue received into the Petroleum Holding Fund, the Heritage Fund receives only 9%.
Most of the groups who have disagreed to the Finance Minister’s assertions have done so with the stance that the Heritage Fund is supposed to benefit Ghanaians in the future and would have serious implications on petroleum revenue management in particular.