Industrialisation drive starved of oil funds — PIAC report reveals

It has emerged that no transfer of funds from the annual budget funding amount (ABFA) was made to support industrialisation development for the first half of this year. 

This is surprising, given that the country received a record-breaking $840.77 million in petroleum revenue for the same period, the highest since crude oil production began in 2010.

The development begs the question of whether industrialisation is indeed a priority sector as trumpeted by a government, which seems keen on transforming the economy through industrialisation. 

All priority areas such as agriculture, including fisheries; physical infrastructure and service delivery in education and health; and roads, rail and other critical infrastructure received funding in the period under review with the exception of industrialisation.

Sharing findings of the 2024 Semi-Annual Report of the Public Interest and Accountability Committee (PIAC) in Accra, the new Chairman of the PIAC, Constantine Kudzedzi, stated that there was neither allocation nor disbursement to the industrialisation priority area during the period under review.

“As there was no budgetary provision, there was no ABFA disbursement to the industrialisation Priority Area for the period under review. The ABFA disbursement to this priority area has been on the decline since the selection of the priority area in 2020,” he said.

He urged the Ministry of Finance to demonstrate the essence of prioritisation of the industrialisation priority area by consistently committing disbursement of the ABFA to that sector.

Actual ABFA

According to the Ministry of Finance, the actual ABFA available for distribution during the first half of the year is GH¢3.257 billion.

This is made up of 2023 unutilised ABFA of GH¢592.57 million and GH¢2.664.97 billion distributed to ABFA for the first half of 2024.

Out of the ABFA available for use, GH¢3.030 billion was distributed to the priority areas, leaving a balance of GH¢227.02 million to be used in the second half of 2024.

During the period under review, expenditure under goods and services was GH¢738.64 million, representing 37 per cent while that under-capital expenditure (public investment expenditure) was GH¢2.29 billion, representing 75.63%. 

Agriculture

The agriculture sector, including the fisheries priority area, received GH¢169.37 million for the period.

This disbursement is equivalent to 5.59% of the ABFA for the period, 28.23% of the budgeted allocation to this priority area for 2024, and 68.32% of the disbursement to this priority area for the same period in 2023.

About 95.75% (GH¢162.17 million) of the funds disbursed to this priority area was spent on the Tamne Dam Irrigation Project in the Upper East Region.

The rest of the disbursement was spent on the construction and completion of the Nanton-Kurugu Irrigation Dam in the Northern Region of Ghana, and the construction and completion of sprinkler irrigation projects in Kumawu, Ahinasi and Ataneata.

There was no disbursement to the fisheries aspect of the priority area.

Physical infrastructure

The physical infrastructure and service delivery in education and health priority areas received GH¢732.52 million.

This amount constitutes 24.17% of the total ABFA for the period under review.

The entire disbursement was spent on goods and services in favour of the implementation of the Free Senior High School Programme for the 2023/24 academic year. 

There was no disbursement to the health aspect of this priority area.

Other critical infrastructure

Also, roads, rail and other critical infrastructure priority areas received GH¢2.12 billion, which constitutes 70.04% of the ABFA for the 2024 period.

The Ministry of Roads and Highways received GH¢875.40 million for various road projects in the country. Some of the major road projects are the Upgrading of the Kyeaboso – Akrokere Feeder Road, the Reconstruction of the Fijai Bypass Dual Carriageway, the Rehabilitation of Kenyasi – Ntonso, the Upgrading of Abokobi – Berekuso Junction, and Bridge over River Volta along Mishou – Woyema Road, to name but a few.

The Ministry of Railways Development received GH¢111.05 million for various railway projects. Out of this, 58.28% (GH¢64.72 million) was spent on the renovation of storehouses at Sekondi in the Western Region.

The rest of the disbursement was used for the redevelopment of the Kojokrom – Manso Railway line and for the payment of compensation to persons affected by the Tema – Mpakadan Railway Project.

The other critical infrastructure aspect of this priority area received GH¢1.14 billion of the disbursement to this priority area.