June 10, 2014

Deputy Minister of Finance, Cassiel Ato Baah Forson has rejected Minority’s claims that government illegally withdrew $177 million from the Petroleum Stabilization Fund.

The Minority today claimed the government in May 2014 made a withdrawal of $177 million from the Fund and “strongly urged Parliament to investigate this issue and we ask the government and the Bank of Ghana to come clean on this”.

But Mr. Ato Forson told Evans Mensah on Joy FM’s Top Story Tuesday it is “shameful” for the Minority to revisit an issue government had already clarified. The NPP is simply refusing to accept government’s position, he said.

The 2014 Budget Statement and Economic Policy of the Government of Ghana proposed a cap on the Ghana Stabilisation Fund (GSF) at US$250 million in line with Section 23(3) and (4) of the Petroleum Revenue Management Act (Act 815).

The Deputy Minister said the GSF balance as at end-December 2013 stood at US$319,034,153.16. In the first quarter of 2014, a total of US$107,457,183.71 accrued to the GSF, bringing the total GSF balance as at March 31, 2014 to US$426,491,336.87, he added

The excess amount, he said, would be utilized for debt repayment and setting up the Contingency Fund.

Given the GSF cap of US$250 million, the excess amount at the end of March 2014 was US$176,491,336.87, he noted.

The Deputy Minister further explained that the Ministry of Finance wrote to the Controller and Accountant-General to instruct Bank of Ghana to use the equivalent of GHȻ50 million of the excess amount to set up the Contingency Fund- a fund meant to cater for urgent or unforeseen expenditure – as proposed in the 2014 Budget, and transfer the rest into the Debt Service Account for debt repayment.

Mr. Ato Forson therefore described as “ridiculous” and “inaccurate” the claims being made by the Minority.

He also challenged the Minority to check with the Bank of Ghana if the amount transferred from the GSF is not in the Contingency Fund and Debt Service Account.

He insisted that government has not violated any law as the Minority claimed. The government would only go to Parliament for approval when it wants to utilize those accounts, he stated.

Ato Forson maintained that Contingency Fund and Debt Service Account were approved by Parliament, as captured in column 3647 of the Official Report of Parliament (The Hansard, Fourth Series, Vol.84, No.31) on Tuesday, 17th December, 2013.

But Deputy Minority Leader, Dominic Nitiwul was not convinced by his explanation.

He emphatically stated that government cannot establish the contingency fund through a budget: this would only be possible if the Petroleum Revenue Management Act is amended.

He said Parliament is still waiting for a proposal on the Contingency Fund, and insisted that there no such contingency fund.

He therefore insisted that the Minority’s checks at the Bank of Ghana revealed that the US$177 million has been withdrawn by government but what it was used for is still not clear.