The Use of Petroleum Revenue: NDC or NPP’s Epistle?



A day after the Townhall Meeting by H.E Alhaji Dr. Mahamudu Bawumia in Kumasi, Hon. John Abdulai Jinapor delivered a lecture on Ghana’s Energy Sector in Accra to also address some important issues in that sector.






As part of the energy sector presentation by Hon. Jinapor, issues relating to the (in) appropriate use of the Annual Budget Funding Amount (ABFA) came up. Among the highlights was the issue of the use of a greater proportion of the ABFA on aspects of education as a priority area such that the disproportionate use of the oil revenue favoured just one programme (Free SHS) contrary to the wisdom of the Petroleum Revenue Management Act (PRMA) which dictates a balanced appropriation and utilization of petroleum revenue across specific sectors.

It is instructive to appreciate that the use of petroleum revenue as prescribed by the Petroleum Revenue Management Act, 2011 (ACT 815) as amended, was not intended to be guided by how political parties understand it but to follow the framework provided.

The PRMA requires that in every three years four priority areas should be presented to parliament for approval. Among the four priority areas presented and approved by parliament in 2017 includes physical infrastructure and service delivery in education and science and technology. The key guiding principle underpinning the management of petroleum revenue can be found in Article 36 of 1992 Constitution as appropriately highlighted in the preamble to the PRMA.

The summarized provisions in Article 36 became the main focus of the use of the ABFA in section 21 of the PRMA, which is to promote the rate of economic development, create equal economic opportunities for all and to ensure balanced and even development between rural and urban areas of Ghana.

The question then arises as to why other sectors among the four priority areas, e.g. physical infrastructure and service delivery in health received so much less ABFA resources? The next question is  what is service delivery in education and science and technology? Is it payment of fees under the Free SHS?

My understanding of service delivery in education and science and technology includes- the direct school environment in terms of provision of laboratories, equipment, tools and logistics needed in a standard school setting. It also includes adequate provision of textbooks, functioning libraries, improved safety and security of students, teachers and other staff as well as the general welfare needs of schools. Service delivery in education should also take care of workshops and in-service training for teachers, staff promotions among others. To equate service delivery in education to payment of fees, hence prioritize it for ABFA resources is not what was envisaged by the PRMA. Finding sustainable source of funding for Free SHS or amending the PRMA to specifically accommodate payment of fees as a priority can however be explored by present and future governments.

Do we want to wait until another argument starts in this county about the fact that service delivery in health should mean health related bills of a certain class of Ghanaians so it also qualifies to attract ABFA funding? Parliament owes the citizenry a duty to forestall the potential misappropriation of the ABFA to the detriment of critical sectors envisaged and crafted in explicit language by the PRMA.

By Prof. John Gatsi

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