As part of the government’s reset agenda, the country is currently rewriting the rules for how its petroleum fund is spent, and the ripple effects could be far-reaching. The government is amending the Petroleum Revenue Management (Amendment) Act, 2025 (Act 1138), the very foundation for how the country allocates its oil wealth, altering what many saw as the heart of the Petroleum Revenue Management Act (PRMA).
For more than a decade, the PRMA, first passed in 2011, was hailed as a model for transparent and responsible oil revenue management. It created a system where petroleum money was ring-fenced for national priorities, guided by a long-term vision rather than political cycles.
The law also ensured that certain institutions and initiatives, including the Public Interest and Accountability Committee (PIAC), the Ghana Infrastructure Investment Fund (GIIF), and later the Free Senior High School (Free SHS) programme, received direct funding from oil proceeds under what is known as the Annual Budget Funding Amount (ABFA).
However, a significant turnaround is underway that could have far-reaching implications.
The Amendment
Under the new amendment, the ABFA is now officially described as part of the national budget, subject to the same processes and political discretion that guide other government funds. The amendment also repeals the section that lists specific areas and bodies entitled to ABFA allocations.
This means the Finance Ministry will have more flexibility, and perhaps more control, over how oil revenues are spent each year. Gone is the automatic guarantee that some of the country’s oil wealth will be directed directly to watchdog institutions, strategic investment funds, or educational programs.
This “surgery” marks a sharp departure from the PRMA’s original purpose: to protect oil money from short-term politics and ensure it was used for long-term development.
Below are some of the impacts of the proposed amendments
PIAC Funding
One of the casualties of this reform is PIAC, the independent committee established to monitor how Ghana’s oil money is used. Before 2015, PIAC struggled to function effectively. It depended almost entirely on the Ministry of Finance for funding and often received just about a third of its approved budget. The 2015 amendment (Act 893) changed that, securing direct funding from the ABFA.
Since then, PIAC’s financial footing has improved drastically, with an average of 85.5% of its annual budget released between 2016 and 2024.
But now the stability the watchdog enjoyed is in jeopardy. Without guaranteed ABFA support, PIAC risks returning to the days when its independence was more theoretical than practical. This means the accountability institution will become financially dependent on the very institutions it is meant to oversee.
The fundamental question is, who will watch over the oil money if the watchdog is starved of funds?
GIIF: The Projects Fund to Feel the Pinch
The Ghana Infrastructure Investment Fund (GIIF), which has been instrumental in financing large-scale national projects, also faces a funding drought.
GIIF was established to channel oil revenues into critical infrastructure such as hospitals, energy projects, and transport systems. These are projects that transform oil wealth into visible development. The Fund has backed initiatives like the Agenda 111 hospital project and investments in Kotoka International Airport’s Terminal 3.
By removing GIIF’s direct access to ABFA funds, the government risks disrupting the pipeline for infrastructure financing. In a country where infrastructure gaps already cost businesses and households dearly, this could have real-life consequences, from stalled hospital projects to delayed road construction.
Free SHS: Education No Longer Linked to Oil
The previous government’s famous Free Senior High School (Free SHS) policy, which has benefited millions of Ghanaian students, is one of the casualties of the new amendment.
The policy is now losing its oil revenue backing. Though the government insists that Free SHS will continue, its removal from the list of ABFA-funded programmes means it will now compete for space within the broader national budget. In tight fiscal times, education funding could easily become a casualty of shifting political priorities.
The Cruciality of this Amendment
All this comes at a time when the oil sector itself is struggling. Ghana’s crude oil production has declined significantly since its peak, and no new petroleum agreements have been signed since 2018, according to PIAC’s latest report.
The reduction in oil production has also dipped the country’s oil revenues, throwing the country’s budget off track. This means that the pool of oil money is shrinking just as the rules for spending it are being loosened.
The 2025 amendment may simplify government budgeting and give the Ministry of Finance more flexibility, but it comes with trade-offs; transparency, predictability, and long-term planning may all suffer.
