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Ken Ofori Atta 2

The Minister of Finance, Mr. Ken Ofori-Atta, has revealed that GHC400 million will be allocated from the Annual Budget Funding Amount (ABFA) to finance the NPP’s Free SHS policy with additional revenue from other domestic sources to support its implementation. He confirmed that the Free SHS policy will begin in September this year, starting with fresh students across all public schools in Ghana. He made this known at his maiden annual budget presentation to Parliament on 2nd March. The amount will constitute about 49% of the total US$ 169,458,674.13 revised benchmark revenue to be allocated to the ABFA.

Speaking on the petroleum sector, he stated that, the total petroleum receipts for 2016 recorded US$247,175 million as compared to the 2016 Budget estimate of US$348.42 million, leaving a variance of US$101,241 million Dollars. The total ABFA receipts in 2016 amounted to GHȻ388.85 million, with actual utilisation amounting to GHȻ311.12 million, leaving an unutilised balance of GH¢77.73 million in the Petroleum Holding Fund.

2016 ABFA Utilisation by Priority Area

 

PRIORITY AREA

 

UTILISATION (GHȻ)

 

Expenditure and Amortisation of Loans for Oil and Gas Infrastructure

        –
 

Road and Other Infrastructure

 

199,447,492.13

 

Agriculture Modernization

 

27,671,280.88

 

Capacity Building (including Oil and Gas)

 

83,037,283.91

 

Total Spending in Priority Areas

 

310,156,056.92

 

Transfers to the Public Interest and Accountability Committee

 

967,000.00

 

Total ABFA Spending

 

311,123,056.92

Source: Bank of Ghana, Ministry of Finance

About 64 percent of the total ABFA in 2016 was spent on roads and infrastructure, 27 percent on road and infrastructure, 9 percent was invested in the agricultural sector and a little under 1 percent was given to the Public Interest and Accountability Commission for its activities.  Ghana National Petroleum Corporation was allocated USS88, 4970.92 million for its operations out of the total USS247, 175394.26 petroleum revenue collected in 2016.

Evelyns pie chart

The implementation of the Petroleum Local Content and Local Participation Regulations which began in 2016 led to the industry registering an increase in capital investments, local sourcing and subcontracting. For petroleum downstream service contracts, indigenous Ghanaian service providers were awarded about USD 221 million representing 73 percent increase to USD 128 million for 2015.

The Mr. Ofori-Atta also revealed that, the NPP government will review the priority areas of spending for the ABFA according to the PRMA and propose to have Agriculture; Physical Infrastructure and Service Delivery in Education; Physical Infrastructure and Service Delivery in Health; and Road, Rail and other critical Infrastructure Development as the government’s new priority areas for investing the ABFA. According to him the revision of the priority areas is to give focus to infrastructure development in critical areas of the economy.

The 2017 Benchmark Revenue for 2017 petroleum revenue was revised and projected at US$515.64 million, down from the original US$741.77 million due to volatility of the oil price on the international market, early performance issues from the TEN Field and the Jubilee FPSO turret bearing remediation project.

Breakdown of the Total Revised Petroleum Receipt and Distribution/Allocation in 2017

Transfer to National Oil Company (NOC) US$ 273,590,424.25
Annual Budget Funding Amount US$ 169,458,674.13
Transfer to the Ghana Petroleum Funds US$   72,625,146.06
Ghana Stabilization Fund US$  50,837,602.24
Ghana Heritage Fund US$  21,787,543.82
TOTAL US$588,299,390.50

Evelyns pie chart 2

He pledged that, the Ministry will work with the Jubilee Partners to address the shortfall in oil and gas production resulting from the 2016 damage on the turret bearing on FPSO Kwame Nkrumah and will adopt a three phase approach to convert the FPSO Kwame Nkrumah to a permanent spread-moored.

 

 

 

 

 

Story by Evely Addor

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