PIAC criticises $100m cap on Stabilisation Fund

The Public Interest and Accountability Committee (PIAC) has expressed strong reservations about the government’s decision to cap the Ghana Stabilisation Fund (GSF) at $100 million, arguing that the move undermines the very purpose of the fund and violates the Petroleum Revenue Management Act (PRMA).

According to PIAC, the decision to impose such a low ceiling on the fund contradicts the government’s own commitment to transparency, prudent fiscal management, and intergenerational equity in the use of petroleum revenues. The committee insists that the fund was established to serve as a financial buffer for the economy in times of revenue shortfalls and external shocks — a role that becomes difficult to fulfil when it is capped below sustainable levels.

In its latest report, PIAC stated that while the law permits a temporary cap to allow excess funds to be transferred into the Contingency and Debt Service Accounts, the consistent application of the cap over several years without clear justification weakens the country’s financial resilience. The committee urged the Ministry of Finance to comply fully with the provisions of the PRMA by reviewing the cap and ensuring that petroleum revenues are managed strictly according to law.

PIAC further highlighted that the GSF plays a critical role in stabilising the national budget, particularly during periods of oil price volatility. The committee warned that failing to allow the fund to accumulate beyond the current $100 million limit could leave Ghana exposed to fiscal shocks, especially as the country continues to navigate debt challenges and revenue constraints.

Analysts have noted that with global oil prices fluctuating and domestic expenditure rising, maintaining a healthy stabilisation fund is crucial to prevent fiscal slippages and ensure economic stability. They argue that a more flexible approach, one that allows the fund to grow in response to revenue performance, would better serve Ghana’s long-term interests.

PIAC also reiterated its call for Parliament to exercise stronger oversight over petroleum revenue management, emphasising that compliance with the PRMA is not optional but a legal requirement that ensures transparency, accountability, and sustainability in the oil and gas sector.

The committee concluded that the capping of the Ghana Stabilisation Fund, while possibly intended to address short-term fiscal pressures, ultimately erodes public trust and the integrity of the country’s petroleum revenue framework. It called on the government to lift the cap, restore compliance with the law, and allow the fund to perform its stabilising role in full.

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