13 Years of budget utilisation, 3 presidents spent GH¢22.93bn

The country has financed various development projects from oil revenue to the tune of GH¢22.93 billion since commercial oil production began in 2011.

The funding, which was allocated out of the cumulative $10.69 billion revenue realised from crude production in the last 13 years, was utilised to support strategic sectors, including agriculture, rail, road, critical infrastructure, health, education, and loan repayment, among other selected priority areas.

However, as the country's oil reserves continue to decline, some critical questions arise that underpin whether successive governments have been able to use the allocations for balanced regional development to ensure the quality of expenditure, promote equity of economic opportunity and improve the well-being of citizens.

Fiscal mechanism

Information sourced from the Public Interest and Accountability Committee (PIAC) showed that the allocations have been consistently facilitated through the Annual Budget Funding Amount (ABFA) by various governments under three presidents between 2011 and 2024.

The ABFA is a fiscal mechanism established under the Petroleum Revenue Management (PRMA) Act, 2011 (Act 815) to support annual budget funding.

The main objective of the ABFA is to maximise the rate of economic development, ensure even and balanced development of the country’s regions and promote equality of economic opportunity with a view to ensuring the well-being of citizens.

The law stipulates that ABFA allocations cannot exceed 70 per cent of the benchmark revenue.

Priority areas

In the absence of a long-term national development plan, the spending of petroleum revenue shall give priority to, but not be limited to health, infrastructure development, alternative energy sources development, potable water and sanitation, social welfare and rural development.

Other priorities are housing delivery, strengthening of institutions, environmental protection, public safety and security, agriculture and industry, and education, science and technology.

The selected priority areas must be reviewed every three years.

Distribution

Data sourced from PIAC showed that the governments of Prof. John Evans Fiifi Atta Mills and John Dramani Mahama were allocated GH¢3.31 billion between 2011 and 2016, while Nana Addo Dankwa Akufo-Addo's administration disbursed GH¢19.62 billion from 2017 to the first half of 2024.

Although the ABFA has been distributed for nearly 13 years to fund development projects, the majority of the priority areas such as alternative energy sources development, social welfare, rural development, housing delivery, environmental protection, and public safety and security are yet to be selected.

On the whole, industrialisation received the least amount of GH¢63.17 million over the 13 years; road, rail and other critical infrastructure projects secured the largest cumulative share of GH¢13.73 billion; physical infrastructure service delivery in education and health got GH¢5.24 billion, followed by agriculture with GH¢1.27 billion.

Other areas such as the Ghana Infrastructure Investment Fund (GIIF), District Assemblies Common Fund (DACF), amortisation of loans, and PIAC together received a cumulative GH¢2.67 billion over the period under review.

The current priority areas (2023 -2025) are agriculture including fisheries, physical infrastructure and service delivery in education and health, roads, rail and other critical infrastructure, and industrialisation.

Big-ticket projects

Some of the big-ticket projects that have benefited from oil proceeds are Agenda 111 Project with a sum of GH¢2.09 billion; the construction of Irrigation Infrastructure at Tamne in the Upper East Region, which received GH¢412.88 million; the construction of a flyover over the Motorway from Flower Pot Junction that got GH¢144.80 million; dualisation of Accra-Kumasi highway with funding of GH¢121.17 million, and the rehabilitation of Kumasi - Sunyani Road with GH¢148.96 million.

Other projects are the upgrading of the 50-kilometre Branka - Otuokwai - Kumeso - New Abirem Road (GH¢143.31 million); modernisation of railway location workshops complex, drainage system and training institute Sekondi-Takoradi (GH¢50.80 million); Kotoka International Airport (KIA) Terminal 3 ($30 million); the Supply of Fertiliser under Governments Fertiliser Subsidy Programme (GH¢52.84 million); the development of irrigation infrastructure at Mprumem (GH¢39.01 million) and the construction of Anomabo Fisheries College (GH¢17.91 million).

Contribution

The Coordinator of PIAC, Isaac Dwamena, stated that the ABFA had significantly contributed to modernising agriculture in the country through various initiatives.

“Although the outcomes fell short of expectations, the ABFA has undoubtedly played a crucial role in supporting infrastructure development, including the construction and upgrading of hospitals, roads, rail networks, and other vital projects,” he stated.

Mr Dwamena explained that the oil revenue had also successfully funded social development projects, notably in education, and achieved a major milestone in the country's healthcare sector by digitising patient records onto a national digital platform.

Quality of spending

For his part, a Senior Programme Officer for Africa at the Natural Resource Governance Institute (NRGI), Dennis Gyeyir, said the key concerns for many people with regard to the allocations were the quality of expenditure and how they were contributing to different categories of developmental needs.

“We have seen substantial allocations that have gone into projects that yield less tangible outcomes with some to the tune of up to GH¢400 million.

“And when you visit the project, you will wonder whether these are projects which have benefited from such a huge amount. Although projects have gone to mostly all the regions, the quality of spending is still a problem and questionable and for that reason must be checked and addressed,” Mr Gyegyir said.

He added that projects that contributed to economic development were those that could support wider economic outcomes such as major roads that connected to rural areas, major railways and airport facilities with huge returns such as the Kotoka International Airport (KIA) terminal three, among others.

Way forward

With the selection of new priority areas for 2026-2028 impending, experts are calling on the new government to conduct a thorough review of previous priority areas to inform future decisions.

That evaluation, they posited, would help the government to decide whether to maintain focus on existing priority areas or identify new ones given the direction of the country.

As of the time of filing this story, there is no evidence to suggest that the Ministry of Finance (MoF) has conducted any impact assessments or evaluations of the ABFA allocations since their inception in 2011.