Final Petroleum Revenue Mgmt Bill July.pdf
Ghana's new "Petroleum Revenue Management Bill," which the government recently introduced to parliament, provides a strong framework for the collection and management of the country's expected petroleum revenues. In a new brief from Revenue Watch (pdf), RWI Advisory Board Chair Joseph Bell, Legal Analyst Patrick Heller and Deputy Director Antoine Heuty offer comments and suggestions.
The Bill is an improvement in several respects on earlier proposals that had been released for public consultation. In particular, the Bill would establish a clear system of controls for the collection of oil revenues and their allocation to the budget and the proposed stabilization and savings funds, a clear division of responsibilities among authorities, reasonable rules for managing the investments of the funds, and strong oversight and transparency provisions.
This latest proposal puts much more emphasis on deploying a larger portion of current revenues for investment to promote long-term growth and economic diversification rather than permanently holding such funds in foreign savings as part of the "Heritage" fund. Such domestic investment could provide greater benefits to both present and future generations of Ghanaians than the returns to the savings fund and improve the government's ability to respond to market volatility or other economic changes.
The Bill has strong transparency provisions which Revenue Watch commends, and which now limit confidentiality exceptions to disclosure. However, there is room for certain additional disclosures, including of the funds' holdings at a fully disaggregated level, and mandatory public disclosure of petroleum agreements, which would further enhance the transparency of Ghana's revenue management strategy.
The brief also notes that operations of the proposed Stabilization Fund will need to be closely integrated with the government's fiscal policy and may necessitate the creation of more flexible rules than those mandated by the Bill.
Most importantly, in conjunction with the Bill, Ghana needs to have in place a long-term development plan aligned with a medium term fiscal framework and annual budgets to ensure that oil proceeds are in fact channeled towards productive domestic investment.
Download and read the full brief … (pdf)
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