Policy think-tank, the Institute of Fiscal Studies (IFS) is advocating for the establishment of a new law to streamline the activities of the Ghana National Petroleum Corporation (GNPC) to save oil revenue.
This was contained in a policy brief issued by the IFS titled ‘Assessing Management of Ghana National Petroleum Corporation Revenue.’
“However, GNPC’s transparency has room for improvement; since the Corporation’s public disclosure of information is limited, despite its extensive reporting obligations.
To improve efficiency, Parliament should rein in the quasi-fiscal and corporate social responsibility activities of GNPC, and enact a new law for the Corporation to strengthen its transparency and accountability, while reflecting the changing dynamics of the oil and gas industry,” an extract from the report highlighted.
The Institute believes this is necessary as a third of the nation’s oil revenue is received by GNPC as stipulated by the Petroleum Revenue Management Act as amended. This law directs the affairs of the revenue sharing of Ghana’s hydrocarbon industry.
This places GNPC at the heart of the nascent but yet booming oil industry in the country.
The IFS argues that improved efficiency hinges on a number of measures that would unearth maximum output for GNPC.
In a press conference to highlight the policy brief, Executive Director of the Institute, Prof Newman Kusi said, “It is not the responsibility of GNPC to give scholarships or undertake Corporate Social Responsibilities; how can the GNPC loan money to the government or the ministry of finance? So if we are not getting anything out of it (GNPC) how can we allow it to continue to exist?”
Meanwhile, the IFC is also calling for an amendment to the Petroleum Revenue Management Act (PRMA) to effect the Annual Budget Funding Amount (ABFA).
Senior Research Fellow of the Institute, Leslie Dwight Mensah bemoans the lack of clarity in the PRMA regarding the Minister of Finance’s authority to set a ceiling on the Ghana Stabilization Fund (GSF).
“Since the GSF is intended to alleviate shortfalls in oil revenues allocated to the budget, the floor could be set as a percentage of the ABFA,” he said.
The IFC has however called for transparency in reporting the country’s petroleum revenue performance.