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Business News of Thursday, 23 August 2018

Source: citibusinessnews.com

Stabilization fund records over $300m

The Stabilization Fund has accrued monies in excess of $300 million by the end of the first quarter of 2018.

According to a report released by the Bank of Ghana, the fund had a closing book value of $428,662,005.05 at the end of the first half of the year.

This means that the fund had a balance of $328,662,005.05 due to the 100 million cap.

The $300 million will, therefore, be transferred to the Sinking Fund for debt servicing again.

The stabilization fund was established under the Petroleum Revenue Management Act (Act 815), to provide budgetary support in case there is a shortfall in the petroleum revenues.

But the Act was later amended to allow excess monies in the fund to be moved into a sinking fund for debt repayment purposes.

The cap on the fund was originally pegged at US$250 million, but that was reduced to US$150 million in 2015.

It was further reduced to US$100 million in 2016.

Some sector analysts say the figure may not be enough to sustain the country’s critical public expenditure.

Government’s consistent lowering of the cap on the Ghana Stabilization Fund (GSF) could ultimately defeat the purpose for which the Fund was set up, with monies in the Fund expected to reach an all-time low this year.

Meanwhile, the heritage fund which is meant to support development for future generation also had $413,481,829.47.