The Africa Center for Energy Policy (ACEP) wants the government to revise the hundred million dollars allocation to the stabilization fund. ACEP argues that the allocation is inadequate and must be reviewed upwards. The fund which was capped at a hundred million dollars by the erstwhile government was however not captured in the 2017 budget.
A situation ACEP describes as confusing. ‘‘In the 2016 budget the minister of finance capped the stabilization fund at $100 million and we were expecting a revision of that cap by the Minister of Finance in the 2017 budget but he was silent on it. So at this point we don’t know whether he is keeping the cap set by the former minister for finance or he is going to grow the fund,’’ Deputy Executive Director of ACEP, Benjamin Boakye told Citi Business News.
The Deputy Executive Director further said the only solution to leveling the fund is to adhere to strict rules of making a conscious effort to grow it. “… we advocate that once you are able to grow the fund, you are able to smoothen your expenditure in respect of the annual budget funding amount so that when you have short falls, as a result of oil prices or low production, you can still have revenues to be able to cushion your budget,”he added.
The stabilization fund was created under the Petroleum Revenue Management Act (Act 815), to provide budgetary support in times of shortfalls in expected petroleum revenues. It was later amended to include the payment of debts. Mr. Boakye, however, demanded that the government revises the budget to grow the stabilization fund. “But as of now, $100 million is not enough to cushion your budget. If you have a significant shortfall of say $200 million or $300 million in receipt. And I think we need to grow the fund to make sure that we have the buffer that is required to smoothen the budget.”
Source: Jessica Ayorkor Aryee/citibusinessnews.com