I regret it has to take a Facebook post for govt to respond to missing oil money-Dr. Manteaw

Chairman of the Civil Society Platform on Oil and Gas, Dr. Steve Manteaw has responded to the Finance Ministry’s statement regarding his claims that some 2 billion oil money was missing.

According to him, he wished that every year was an election year because he had raised these issues years ago but never got any feedback from the government.

Dr. Manteaw had suggested that an amount of GH¢2,132,188,611.01 of oil revenues is missing from the books.

But in a response, the Ministry of Finance dismissed his claim saying “The alleged missing amount reported by Dr. Manteaw on Facebook, is significantly different from the amount of GH¢1,479,896,299.86 reported by PIAC as the unutilised Annual Budget Funding Arrangement (ABFA) balance in their 2019 Annual Report (pages 13,15,and 20), and published on its website on 23rd June 2020

We have noted that Dr. Manteaw erroneously presents the cumulative unutilised ABFA balances for 2017/18/19 of GH¢1,479.90 million as the closing balance for 2019 alone, then adds the 2017/18 closing balances of GH¢400.91 and GH¢251.38 thus inflating the cumulative ABFA closing balances by an additional GH¢652.29 million, bringing his cumulative closing balance to GH¢2,132.19 million as reported in his Facebook post.

“The above balances were unutilised at the end of each year when the books were closed mainly because of delays in submission of Interim Payment Certificates (IPCs) by MDAs for payment. These were then settled in the subsequent year.”

Regarding the amounts unutilised at the end of 2017/2018, the Ministry said “The sum of the unutilised (closing) balance of GH¢652.29 million for 2017/2018, were subsequently transferred to the Road Fund Secretariat, under the Ministry of Roads and Highways and utilised in line with the provisions of the Petroleum Revenue Management (PRM) Act, 2011 (Act 815), as amended, to reduce the Fund’s indebtedness to road contractors and creditor banks.

“The 2019 unutilised (closing) ABFA balance of GH¢827.60 million, on the other hand, was utilised in 2020 to partially meet the funding shortfall of GH¢2,679.99 million from the approved 2020 ABFA Budget of GH¢4,336.18 million caused by the impact of the Covid-19 pandemic resulting in a supply glut which then impacted negatively on crude oil prices globally.

“From the explanation provided above which was hitherto conveyed unambiguously in our letter No.ESRD/EPU/30/06/20 to PIAC (copy attached), and also at the meeting of the Finance Committee of Parliament on the 2019 PIAC report, it is misleading to suggest that an amount of GH¢2,132,188,611.01 of oil revenues is missing from the books.

“Indeed, Ghana’s PRMA, touted as one of the best petroleum management laws in the world, provides the requisite controls in addition to our PFM laws and regulations to ensure that our oil resources are properly and efficiently utilised and accounted for.”

Firing back, Dr. Manteaw said: “This is indeed, not the usual mode for official communication, but developments following my Facebook post of Thursday, 3rd December, suggest that, it’s the most effective, and since the official government response to my post was widely circulated through the same medium, I will stick to the new normal in dealing with the vexed issues.

“First, I very much welcome the speed with which the Ministry of Finance responded to my Facebook post on the unaccounted for ABFA. It makes some of us wish every year was an election year. In 2018, when the issue of unspent ABFA was first raised by PIAC the government ignored it. Letters to the Minister, requiring explanation of the missing GH¢400 million from the accounts it presented to PIAC went unanswered, until the Committee held a meeting with editors and senior journalists at Ho, to discuss the matter. The next day, the newspapers were flooded with screaming headlines on the subject. Only then did the Ministry find it necessary to respond, assuring PIAC and the public that the money is not missing and that, it was being kept in the Ministry’s Treasury Main Account.

“Even then, the response raised further concerns, prompting the Committee to seek further clarifications. In a letter dated 4th October 2018, the Committee pointed out to the Minister, that his response raised concern as to the propriety of subjecting petroleum revenues to the Public Financial Management Act, when the intent and purpose of the Petroleum Revenue Management Act is to treat petroleum revenues differently from the generality of public finances, ostensibly because of their exhaustibility. The PIAC’s position was that, putting unspent amounts into other accounts other than the Petroleum Holding Fund from where the money was disbursed creates a difficulty for PIAC in tracking its management and use, as PIAC’s mandate does not extend to those accounts.

The Committee in this same letter, demanded further clarifications as to: • Why the planned projects to be financed with the ABFA amount in question were not ready, and if the list of proposed projects could be provided; • Whether or not these projects were re-budgeted for in the 2018 Budget Statement; • If the Ministry could provide evidence that, indeed the unspent amount is available in the Treasury Main Account, i.e. if the projects were not re-budgeted for in the 2018 budget statement. As I write, the Ministry of Finance is yet to respond to this letter. Indeed, the Ministry’s lack of responsiveness to the Committee’s request for information and clarifications has been unparallel in the last three to four years, compelling PIAC to produce its 2019 Annual and 2020 Semi-annual Reports two months late, and without ABFA expenditure data.

“Accountability practitioners will agree with me, that it does not make for proper accountability to submit revenue data without the accompanying expenditure, and yet it appears the Ministry consider this as normal. What is even more concerning was the attempt by the Ministry to mislead the Committee, when in its Report for 2018, it sought to create the impression that, the GH¢400 million that was unaccounted for in 2017 was embedded in its account for the period. When this was challenged by the Committee, the Ministry had to humbly admit it, as an error, with a pledge to account for it in the 2019 budget. Indeed in 2019 the unspent amount for 2017 and 2018, totalling GHC652.29 million was brought forward. I therefore accept that the amount of ABFA that remained unaccounted for as at 2019, is GHC1.48 billion. I recall that in 2014 there was a budgeted but unspent ABFA amount of GH¢666 million, and that this was swept by the Bank of Ghana. It is therefore very curious why similar budgeted but unspent ABFA will be treated differently between 2017 and 2019.

“The Ministry cites a letter written to PIAC in July 2020 on the matter of the unexplained amount. In the said letter, with reference number ESRD/EPU/30/06/20, the Ministry response to PIAC, with regards to the unutilised and unaccounted for GH¢1.48 billion ABFA balance as at the end of 2019 was: • The total reported unutilised ABFA balances of GH¢1,479.90 million, includes 2018 and 2019 closing balances of GH¢652.29 million, and GH¢827.60 million, respectively. The balances were as a result of the delays in submission of IPCs by the MDAs. • The 2018 closing balance of GH¢652.29 million was transferred to the Road Fund Secretariat, under the Ministry of Roads and Highways and subsequently utilised to reduce the Secretariat’s indebtedness to road contractors/creditor banks and to avoid payment of interest on delayed payments • The 2019 closing balance of GH¢827.60 million, on the other hand, was utilised in 2020 to meet the funding shortfall from the approved 2020 ABFA Budget of GH¢4,336.18 million caused by a slump in global oil demand due to the impact of the Covid-19 pandemic and a supply glut which impacted negatively on oil prices on the international market. • The utilised ABFA balances will be reported in the mid-year review of the 2020 Budget and subsequent petroleum reports.

“However, in the recently published 2020 Semi-annual Report of PIAC, the Accountability Committee confirmed that the Ministry had not submitted the list of projects funded with this GH¢1.48 billion, despite several correspondence, and therefore could not verify nor confirm the utilisation of the amount. It must be pointed out that the transfer of unutilised amounts to the Road Fund to settle debts to contractors is a strange practice as this amount had been appropriated differently by Parliament. Again, this does not absolve the Ministry of its mandate under the PRMA to provide a project-byproject account of the use of petroleum revenue. Also, applying the 2019 closing balance of GH¢827.60 million to meet revenue shortfall is a serious abuse as the ABFA is being treated as a stabilisation fund, when it is not.

“Additionally, the 2020 Semi-annual Report of PIAC stated that, an amount of US$169.51 million (GH¢976.37 million, at an exchange rate of GH¢5.76, as used by the Ministry) distributed to the ABFA in the first half of 2020, was not accounted for, in terms of its utilisation on programmes and projects, again after several correspondence with the Ministry. The Report was published without the ABFA expenditure data, making it the fourth time the Committee had to publish its Report without such data. This brings the total ABFA not fully accounted for to GH¢2.46 billion, as at the end of June 2020.

“To conclude, I regret that it has taken a Facebook post to elicit some partial information on the management and use of Ghana’s petroleum revenues, something that should have been done as a matter of routine. Much as the information provided is useful, they will need to be subjected to verification and strict proof, and to this end, project-by-project expenditure details would be required.”

By: Rainbowradioonline.com

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