Petroleum revenue: Less than a quarter of revenue earmarked for industrialisation

Out of a total of GH¢4.41 billion of the country’s petroleum revenues earmarked for priority areas under the Annual Budget Fund Amount (ABFA) last year, only a paltry GH¢9.29 million was allocated to the industrial sector.

That represents 0.20 per cent of the total amount disbursed under the ABFA and just 4.29 per cent of the GH¢216.3 million otherwise budgeted for the sector last year.

The development raises questions as to whether the government was serious about its commitment to accelerate the development of the industrial sector as one of the key pillars of growth.

According to the 2022 Annual Report released by the Public Interest and Accountability Committee (PIAC), over 24.22 per cent of this disbursement meant for industrial development was used for public investment expenditure while 75.78 per cent was used for goods and services.

“The amount disbursed for industrialisation was mostly used for preparatory work towards the mining of the Gyumurane-Santrofi Akpafu Iron Ore Concession, development of GIISDEC Strategic Master Plan and the supply and delivery of Hydracore Multipurpose Drill-Rig for GIISDEC, among others.

It is the expectation of PIAC that having rightly selected industrialisation as a priority area, the government will use petroleum revenue for the building of more industries for job creation and economic development,” it said.

Agriculture sector disbursement 

The report stated that the agriculture priority area received an amount of GH¢95.84 million representing 2.20 per cent of the total ABFA.

The entire disbursement to this priority area was used for capital expenditure.

An amount of GH¢94.72 million representing 98.83 per cent of the distribution was used by the Ministry of Food and Agriculture (MoFA) for the implementation of the Planting for Food and Jobs programme.

The amount was used for the construction of phase III of the Tamne Irrigation Infrastructure project in the Upper East Region, the construction of grain warehouses in the coastal, middle and northern development zones under the Infrastructure for Poverty Eradication Programme (IPEP) and the construction of small earth dams for irrigation.

Consequently, PIAC commended the government for the significant increase in the disbursement to the agriculture priority area of 924.7 per cent over that of 2021, even though this may have resulted from the low distribution of GH¢9.35 million in 2021.

Education and health 

The report also indicated that the infrastructure and service delivery in the education and health priority areas received an amount of GH¢1.20 billion constituting 27.15 per cent of the ABFA for the year.

An amount of GH¢1.17 billion representing 97.33 per cent of the distribution was used for goods and services towards the Free Senior High School (Free SHS) Programme, while 2.67 per cent was used for education and health infrastructure.

This was the highest amount of petroleum revenue spent on the Free SHS programme in a particular year since 2017.

An amount of GH¢18.46 million representing 1.54 per cent of the disbursement to this priority area was used by the Ministry of Education (MoE) to pay for consultancy and construction of the regional Science, Technology, Engineering and Mathematics (STEM) centres across the country.

Whereas GH¢7.99 million constituting 43.30 per cent was spent on the construction of the STEM centres across the country, GH¢10.47 million representing 56.71 per cent was spent on consultancy services for the project.

The Ministry of Health (MoH) utilised an amount of GH¢13.48 million, which was 1.12 per cent of the disbursement to this priority area for health infrastructure projects such as the construction of Community Health Planning and Services (CHPS) compounds in various parts of the country, the implementation of phase two of the national E-health programme and construction of other health infrastructure projects.

 Road, rail and critical infrastructure

The report revealed that the road, rail and other critical infrastructure priority areas received an amount of GH¢3.10 billion, representing 70.35 per cent of the ABFA for 2022.

The entire disbursement, which was for public investment expenditure (capital expenditure), was used for projects in the road sector, railways and other infrastructure projects like the national electrification programme, water supply projects, drainage and flood control projects among others.

An amount of GH¢1.86 billion constituting 60.02 per cent of the disbursement to this priority area was given to the Ministry of Roads and Highways for projects in the sector.