John Peter Amewu, Director of Research at Africa Centre for Energy Policy
John Peter Amewu, Director of Research at Africa Centre for Energy Policy

Government has been commended for the increase in the allocation of the Annual Budget Funding Amount (ABFA) to the agriculture sector.

In 2013, 1.5% of the ABFA representing 4.6 million Ghana cedis was allocated to the sector but in the 2014 budget a whopping 136 million Ghana cedis has been allocated.

Notwithstanding this, Director of Policy and Research at the Africa Centre for Policy, John Peter Amewu, says government’s continuous allocation of a chunk of the ABFA to expenditure and amortization of the oil and gas sector is “misappropriation of funds”.

Dutch or “Ghana” Disease?

The Dutch disease is used to describe a situation where heavy investment and over reliance on the oil and gas sector affects adversely the growth of the agricultural and services sectors.

Analysts say this trend may be catching up with Ghana. This may be more real than talked about as Financial Analyst, Sidney Casely-Hayford terms it the “Ghana” disease due to differences in challenges with the Dutch.

Finance Minister in the 2014 budget shows the ABFA in the first three quarters of 2013 out of the total funds allocated of US$204.90 million (GH?392.94 million) to be disbursed. Agriculture received the lowest of 4.6 million Ghana cedis while expenditure and amortization of loans? for oil and gas infrastructure received 40%, about 119.88 million Ghana cedis.

Though the former may be enjoying a lump increase in 2014, Peter Amewu insists spending the ABFA on the amortization of loans for oil and gas is a waste of funds; “because section 21 of the Petroleum Revenue Management Act (PRMA) specifies realistic areas where this money should be used [for] though there is a provision for other areas…if the expenditure and amortization of loans for the oil and gas sector is a vital and major area…it should be specified but it is not there”.

A lost mandate?

Section 21 subsection 3 of the PRMA outlines more than 10 priority areas where the ABFA must be used.

The Minister of Finance is expected to pick not more than 4 of these areas subject to parliamentary review every three years except in the case of a national disaster.

In 2014 again, governmnet has proposed to use a chunk of the ABFA to expend and amortize loans in the oil and gas sector which is clearly not one of the areas outlined in the PRMA.

This, the ACEP Director finds unacceptable. He minces no words when he tells Keminni Amanor of JoyNews on MultiTV that “it is inconsistent with the law and going forward we need to re-examine that”.


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