Energy think tank, Africa Centre for Energy Policy (ACEP), has joined calls for the Finance Minister to shelve a plan to draw down on the Heritage Fund to mitigate the effects of the coronavirus on the economy.
In an analysis on the Minister’s recent statement to Parliament on the economic impact of the Covid-19 pandemic on Ghana, ACEP acknowledged that although the economy is stressed due to the pandemic, the government has other funds to fall on.
“The Heritage fund will not solve Ghana’s problems if spent today. The discipline to save for the future is a difficult one but must be encouraged and sustained.
“Spending the heritage fund today is akin to telling citizens to go for their pension because they are faced with challenges in a Covid-19 world. The future of oil is more uncertain today than it has ever been. The fund is envisioned to provide support for the budget when Ghana is no longer receiving revenues from oil and that is an important foresight that should not be crucified today,” ACEP said in the analysis.
Finance Minister, Ken Ofori-Atta, has announced his intention to amend the Petroleum Revenue Management Act (PRMA), the law governing a raft of policies in the petroleum sector, including the Ghana Heritage Fund (GHF), to enable him draw from the Fund.
The Ghana Heritage Fund, a creation of the PRMA, provides an endowment to support the development of future generations when the petroleum reserves have been depleted. It is currently estimated to be worth $591.1 million.
Since the intention to withdraw from the Fund was announced in Parliament, the Minority and civil society organisations have kicked against it.
Read ACEP’s full analysis below.