The Vice President of policy think tank, IMANI Africa, Mr Kofi Bentil, has said the country has failed to fully optimise the use of oil revenues as part of its expenditure mix.
Describing the use of oil revenues to fund various programmes as a ‘mess’, he said the country had done worst with proceeds from its petroleum resources explaining that there was nothing to show for it. “So far, we have done the worst job with oil revenues. We passed the Petroleum Revenue Management Act (PRMA) and said 70 per cent should go into infrastructure.
“We have managed to make a total mess of it and we have little to show for oil revenues”, he said at the Graphic Business/ Stanbic Bank breakfast meeting series, the maiden for the year, in Accra on 18th February. The first breakfast meeting for this year was to discuss how the country could address its revenue and expenditure imbalances. It was on the theme: ‘Breathing new lease of life into the economy — Fixing the revenue/expenditure conundrum.’
According to Mr Bentil, the usage of oil revenues was one expenditure item that was gradually been wasted, heightening concerns about the gradual shift to the resource curse narrative. He said it was thus, important to go back to the law on the use of the revenues to ensure that future generations benefited from it. “Oil revenues is one item that we are making a mess of its expenditure. We are wasting it and we are moving straight towards the curse,” he noted.
He said in 2009, IMANI authored a paper on what oil could do for the economy, and as part of the suggestions, all revenues were supposed to be spent on infrastructure. “We suggested that all the revenues should be used to support infrastructure. We currently have over US$20 billion of infrastructure deficit and it grows by US$2 billion dollars every year in water, health, education, energy among others. So even if we apply all our oil funds to infrastructure, we will not be solving the problem,” he explained.
Touching on the effectiveness of the Public Interest and Accountability Committee (PIAC), the agency tasked with ensuring the prudent management of oil revenues, Mr Bentil said PIAC was limited in its ability to influence how the revenues would be used. “They only come at the end to tell us what has gone wrong. We need to re-think how we use these revenues going forward,” he said.
Mr Bentil said the PRMA had loose ends which were been exploited, hence the need to contemplate what to do with the revenues going forward. He also reiterated the importance of making the tax system in the country very simplified and effective explaining that the tax system was too convoluted. “You can take a very complex thing and make it very simple and that is what we should do to the tax system. We should get to the point where we can make taxation simple enough to be grasped by the ordinary Ghanaian,” he said.
Touching on innovative ways to increase revenues, a Partner at PwC, Mr Abeku Gyan-Quansah, said it was important for the country to ensure that there were systems in place which were actively working to ensure that payment of taxes did not become a burden to taxpayers.
An initiative of the Graphic Communications Group Limited and the Stanbic Bank Ghana Limited, the quarterly breakfast meeting brings together experts, captains of industry, economists, policy makers to discuss issues of national concern.
Source: https://www.graphic.com.gh
