Big Push Agenda Affecting Budgetary Allocation to Petroleum Sector Corporations – PIAC – Life Pulse Daily

Introduction

The Ghanaian government’s Big Push agenda has sparked a heated debate among policymakers, industry leaders, and civil‑society watchdogs. While the $10 billion Big Push Infrastructure Programme promises to accelerate national connectivity and economic growth, the Public Interest and Accountability Committee (PIAC) warns that diverting oil‑derived funds from the Annual Budgetary Fund Amount (ABFA) is squeezing the budgetary allocation of key petroleum sector corporations such as the Ghana National Petroleum Corporation (GNPC). This article unpacks the latest semi‑annual report (January–June 2025), analyses the fiscal dynamics at play, and offers practical guidance for stakeholders navigating the evolving landscape.

Analysis

Background of the Big Push Infrastructure Programme

The Big Push agenda is a flagship development strategy launched by the Ministry of Finance in early 2024. It earmarks US$10 billion for large‑scale projects—roads, railways, ports, and energy grids—intended to boost regional integration and attract foreign direct investment. Funding is sourced from multiple streams, but a decisive portion comes from the Annual Budgetary Fund Amount (ABFA), a pool traditionally used to finance public‑sector operations, including the oil and gas sector.

Funding Mechanism and the ABFA

Under the 2025 fiscal plan, the government redirected approximately 100 % of the ABFA to the Big Push Infrastructure Programme. Only a marginal 5 % of the ABFA was allocated to the District Assemblies Common Fund, leaving the remaining balance unavailable for other ministries and agencies. This re‑allocation directly impacts the Petroleum Revenue Management (Amendment) Act, 2025 (Act 1138), which stipulates how oil proceeds should be distributed among the state, the GNPC, and other petroleum‑related entities.

Impact on Petroleum Revenue Distribution

The semi‑annual report released by PIAC reveals a stark contraction in oil‑related budgetary allocations:

• Petroleum revenue earmarked for operational and institutional development of the GNPC fell from 30 % to 15 % of total carried and participating interest.
• The Public Interest and Accountability Committee’s own budget was cut to GH₵4.6 million for 2025, representing only 21.43 % of its annual budgetary requirement and 41.07 % of the 2024 allocation.
• Overall, the PIAC’s ability to fulfil its statutory mandate—monitoring petroleum revenue, ensuring transparent allocation, and overseeing the Ghana Stabilization Fund—has been seriously constrained.

According to Vice Chairman Odeefuo Amoakwa Boadu VIII, the “model new authorities” behind the Big Push agenda have unintentionally jeopardised the financial health of the petroleum sector, which is already experiencing a decline in production volumes.

Sector‑wide Consequences

Reduced funding translates into several tangible challenges for petroleum corporations:

1. Delayed capital projects: Exploration and drilling initiatives that rely on GNPC’s budget are postponed, slowing the recovery of reserves.
2. Reduced operational capacity: Maintenance of existing infrastructure—pipelines, storage facilities, and processing plants—faces budget shortfalls.
3. Lowered investor confidence: International partners view the fiscal squeeze as a risk factor, potentially affecting future joint‑venture agreements.

Summary

The Big Push agenda is reshaping Ghana’s fiscal priorities by channeling the entire ABFA into a massive infrastructure drive. While the ambition aligns with long‑term economic diversification, the immediate effect is a severe reduction in budgetary allocation for the petroleum sector, especially the GNPC and PIAC. The 2025 semi‑annual report underscores a halving of oil‑derived funds for GNPC and a 58 % cut in PIAC’s operating budget, raising concerns about the sector’s capacity to sustain production and uphold transparency standards mandated by the Petroleum Revenue Management (Amendment) Act, 2025 (Act 1138).

Key Points

Practical Advice

For Petroleum Companies (e.g., GNPC)

1. Prioritise cash‑flow management: Re‑evaluate ongoing projects and suspend non‑essential expenditures.
2. Seek alternative financing: Explore commercial loans, public‑private partnerships, or blended finance mechanisms to bridge funding gaps.
3. Engage with the Ministry of Finance: Submit detailed impact assessments to argue for a re‑allocation of a modest portion of the ABFA back to the sector.

For Investors and Joint‑Venture Partners

1. Conduct a risk‑adjusted valuation: Factor the reduced budgetary allocation into cash‑flow forecasts.
2. Negotiate protection clauses: Include “budget‑cut” triggers in contracts that allow for renegotiation or compensation if government funding falls below agreed thresholds.
3. Monitor legislative developments: Stay updated on any amendments to Act 1138 that could restore or further limit oil‑revenue allocations.

For Civil‑Society and Oversight Bodies

1. Advocate for transparency: Request quarterly public disclosures of how ABFA funds are being spent under the Big Push agenda.
2. Collaborate with academia: Commission independent impact studies to quantify the economic cost of reduced petroleum funding.
3. Utilise legal channels: If the reallocation violates Act 1138, file a petition with the appropriate judicial bodies to enforce compliance.

Points of Caution

• Fiscal over‑reliance on a single fund: Concentrating the ABFA on infrastructure could make the national budget vulnerable to cost overruns or project delays.
• Potential breach of Act 1138: The Petroleum Revenue Management (Amendment) Act mandates specific percentages of oil revenue for stabilization and development. Unlawful diversion could trigger legal challenges.
• Market perception risk: International investors may downgrade Ghana’s credit rating if they perceive a weakening of the petroleum sector’s financial base.
• Social implications: Reduced funding for petroleum‑related employment and community projects may increase public dissent, especially in oil‑producing regions.

Comparison

To contextualise Ghana’s approach, consider two comparative cases:

Norway – Oil Fund Model

Norway directs a significant portion of oil revenues into the Government Pension Fund Global, preserving capital for future generations while maintaining robust funding for the domestic oil industry. The country’s fiscal rule caps annual withdrawals at 3 % of the fund’s value, ensuring long‑term sustainability.

Kenya – Infrastructure‑First Strategy

Kenya’s recent “Vision 2030” infrastructure push similarly reallocated budgetary resources, but it paired the shift with a dedicated “Infrastructure Development Fund” financed through a mix of domestic borrowing and donor assistance. This dual‑track approach mitigated the impact on the oil sector, which, unlike Ghana, is smaller and less central to the national economy.

Ghana’s current model lacks an equivalent offset fund, making the petroleum sector more exposed to budgetary cuts.

Legal Implications

The reallocation of ABFA funds raises several legal questions under the Petroleum Revenue Management (Amendment) Act, 2025 (Act 1138):

1. Statutory Allocation Requirements: Act 1138 specifies minimum percentages of oil proceeds that must be allocated to the Ghana Stabilization Fund, the GNPC, and community development programmes. Diverting ABFA resources without legislative amendment may constitute a breach of these statutory obligations.
2. Parliamentary Oversight: Any amendment to the ABFA’s purpose must be approved by Parliament. If the executive re‑directs funds through administrative orders, affected parties can challenge the decision in the Supreme Court for “ultra vires” (beyond the powers) action.
3. Contractual Obligations: Existing oil‑production contracts often include “government‑policy” clauses that protect investors from adverse fiscal changes. A unilateral budget cut could trigger arbitration under the International Chamber of Commerce (ICC) rules.
4. Accountability Mechanisms: PIAC, as an oversight body, has a legal mandate to monitor compliance with Act 1138. Its reduced budget undermines its ability to conduct audits, potentially weakening enforcement of the law.

Stakeholders should therefore monitor any legislative proposals that modify the ABFA’s allocation and be prepared to initiate legal recourse if the reallocation violates the Act.

Conclusion

The Big Push agenda embodies Ghana’s ambition to transform its infrastructure landscape, but the decision to funnel the entire Annual Budgetary Fund Amount (ABFA) into this initiative is creating a fiscal squeeze for the petroleum sector. The 2025 PIAC semi‑annual report highlights a 50 % reduction in oil‑derived funding for the GNPC and a dramatic cut to PIAC’s own operational budget. While the infrastructure programme may yield long‑term economic dividends, the immediate risk is a weakened petroleum industry, reduced transparency, and potential legal conflicts under the Petroleum Revenue Management (Amendment) Act, 2025 (Act 1138). A balanced approach—maintaining essential oil‑sector funding while pursuing infrastructure goals—will be critical for sustainable growth.

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