Framework for petroleum revenue management in Ghana: missteps, budgetary misalignments, lessons learnt and realignments

In 2011, the Republic of Ghana enacted the Petroleum Revenue Management Act, 2011 (Act 815) which, inter alia, prescribes how petroleum revenue should be utilised by the government. On paper, it appeared a fine piece of legislation. In practice, however, the framework for utilisation of revenue after allocation to the budget turned out to be fraught with avenues for abuse and misappropriation of funds, inadequate disbursements and sub-optimal results. Seven years later, flowing on from the article titled ‘Framework for Petroleum Revenue Management in Ghana: Current Problems and Challenges’,Footnote1 which I authored, this commentary examines an important development in Ghana’s petroleum revenue management framework. An amendment to the law has drastically narrowed the number of areas funds are allocated to under the budget as well as concentrated their utilisation solely on infrastructural development as mooted earlier by several stakeholders. It is too early to determine whether the transformational effect being sought will be achieved. What is clear, however, is that multiple avenues for disbursement and utilisation led to limited impact as the funds were spread too thin and even dissipated. Lessons realised from Ghana’s experience for any similarly situated nation is that in the absence of a long-term national development plan, it should limit the number of avenues for disbursement as well as the utilisation of funds allocated for public expenditure.