The Public Interest and Accountability Committee (PIAC) has hinted that the Ghana Stabilisation Fund (GSF) risks facing a devastating depletion.

According to the PIAC, the Finance Minister's decision to cap the GSF at $100 million and use excess funds from the Fund for other emergency purposes is putting a strain on the Fund.

The objective of the Ghana Stabilization Fund is to cushion the impact on or sustain public expenditure capacity during periods of unanticipated petroleum revenue shortfalls.

However, PIAC disclosed that the decision by Ken Ofori-Atta to cap the fund at $100 million is taking a heavy toll on the fund.

Speaking to the media on the sidelines of the 2022 Semi-Annual Report on Petroleum Funds, the Chairman of the Public Affairs and Communications Sub-Committee at PIAC, Eric Defor, noted that if the country is hit with an unforeseen situation, there will be resources available to cushion the economy.

He further lamented that “the retention of the current cap of $100 million in the GSF for the year 2022 is not in accordance with the formula stipulated in L.I2381. A proper application of the formula would have returned a figure of US$460,633,074.02The Minister of Finance, in determining the cap on the GSF, should comply with the relevant provisions of L.I 2381.”

“It appears that for the past three years the $100 million cap has remained, and should there be another emergency, there will be no resources available in the fund to support the budget, and this we find a challenge,” he added.

Highlighting the impact of the cap, PIAC revealed that at the end of the first half of 2022, the fund generated only $373 million.

Describing the development as a threat to the economy, the committee, called on parliament to review the Petroleum Revenue Management Act, which gives power to the Minister of Finance to use discretionary powers to set the cap.

Source: The Independent Ghana