Santiago Principles Self-Assessment
GPF 2024
Pillar 1: Legal
Principle 1
1. The legal framework for the SWF should be sound and support its effective operation and the achievement of its stated objective(s).
1.1. The legal framework for the SWF should ensure legal soundness of the SWF and its transactions.
1.2. The key features of the SWF’s legal basis and structure, as well as the legal relationship between the SWF and other state bodies, should be publicly disclosed.
The Petroleum Revenue Management Act (PRMA) 2011 (Act 815) was passed by Parliament and
assented to by the President on 11 April 2011 to govern the management of petroleum revenues. The Act defines the framework for collecting, allocating, and managing petroleum revenue in a responsible, accountable and sustainable manner for the benefit of Ghanaian citizens.
The Bank of Ghana is responsible for the day-to-day operational management of the Ghana Petroleum Funds under the terms of the Operational Management Agreement.
The legal relationship between the SWF and other state bodies is as follows;
1. The Parliament of Ghana provides oversight and approves the annual budget funding
amount for petroleum revenues and utilization.
2. The Minister for Finance is responsible for the overall management of the Petroleum
Funds and oversees the transfers into and disbursements from the Ghana Petroleum
Funds.
3. Auditor General audits petroleum receipts and expenditures
4. The Ghana Revenue Authority assesses, collects and accounts for petroleum revenues
5. GNPC is the National Oil Company responsible for exploration, development and production of oil & gas.
6. The Investment Advisory Committee advises the Minister on the general performance monitoring of the management of the Ghana Petroleum Funds.
7. Public Interest and Accountability Committee (PIAC) monitors and evaluates compliance with the Act by the Government and other relevant institutions.
Petroleum Revenue Management ACT 815 | Ministry of Finance
Principle 2
2. The policy purpose of the SWF should be clearly defined and publicly disclosed.
The PRMA established the Ghana Stabilisation Fund (GSF) and the Ghana Heritage Fund (GHF).
These two funds are collectively referred to as the Ghana Petroleum Funds (GPFs).
The purpose of the GSF is to cushion the impact on or sustain public expenditure capacity during
periods of unanticipated petroleum revenue shortfalls.
The GHF is to provide an endowment to support development for future generations when petroleum reserves have been depleted and receive excess petroleum revenue.
Petroleum Revenue Management ACT 815 | Ministry of Finance
Principle 3
3. Where the SWF’s activities have significant direct domestic macroeconomic implications, those activities should be closely coordinated with the domestic fiscal and monetary authorities, so as to ensure consistency with the overall macroeconomic policies.
The GSF is integrated into the State budget with transfers to cushion the impact on or sustain public expenditure capacity during periods of unanticipated petroleum revenue shortfalls.
Additionally, Benchmark Revenue, which is the estimated revenue from petroleum operations
expected by the Government for the corresponding financial year, is allocated to the Annual Budget Funding Amount (ABFA) as approved by Parliament as part of the national budget. This is
guided by a medium-term development strategy aligned with a long-term national development plan, the absorptive capacity of the economy, and the need for prudent macroeconomic management.
Principle 4
4. There should be clear and publicly disclosed policies, rules, procedures, or arrangements in relation to the SWF’s general approach to funding, withdrawal, and spending operations.
4.1. The source of SWF funding should be publicly disclosed.
4.2. The general approach to withdrawals from the SWF and spending on behalf of the government should be publicly disclosed.
a. The PRMA clearly defines the methods of funding and withdrawals, with not less than 30% of the
benchmark revenue being paid into the GPFs. The source of funding for the GPF’s is set out in
Act 815, and will be captured in the various statutory reports that are to be produced by the
Minister, Bank of Ghana and PIAC.
Withdrawals
1. Withdrawals may be made from the Ghana Stabilisation Fund into the ABFA where Petroleum revenue collected in any quarter falls below one quarter of ABFA for that financial year.
2. Withdrawals may be made from the Ghana Stabilisation Fund into the Contingency
Fund or for debt repayment where the amount recommended by the Minister responsible for Finance, necessitated by macroeconomic conditions and, approved by Parliament is attained.
3. Parliament may by a resolution, supported by the votes of a majority of members of
Parliament at intervals of fifteen years from the date of commencement of this Act (2011), review the restriction on transfers from the GHF and authorise a transfer of a portion of accrued interest on the GHF into any other fund established by or under this Act.
https://www.piacghana.org/
https://www.bog.gov.gh/ghana-petroleumfunds/gpf-semi-annual-reports/
Principle 5
5. The relevant statistical data pertaining to the SWF should be reported on a timely basis to the owner, or as otherwise required, for inclusion where appropriate in macroeconomic data sets.
b. The PRMA sets out the requirements for all entities involved in the management of GPFs to provide and publish the reports pertaining to its activities. The management of petroleum revenue and savings is carried out with the highest internationally accepted standards of transparency and good governance.
c. The Bank of Ghana presents quarterly reports on the performance and activities of the GSF and GHF to the Minister and to the Investment Advisory Committee, not later than the end of the month following the end of each quarter.
d. The Bank of Ghana publishes semiannual reports on the GSF and GHF no later than 15 February and 15 August of each year, presents the report to Parliament and publishes it in two state owned daily newspaper and on the Bank’s website. The minister for Finance submits an annual report
on the Petroleum Funds as part of the annual presentation of the budget statement and economic
policies to Parliament.
The PIAC publishes semi-annual and annual reports in at least two state-owned national daily
newspapers, submits a copy to the President and Parliament, and publishes these on their website.
https://www.bog.gov.gh/ghana-petroleumfunds/gpf-semi-annual-reports/
https://mofep.gov.gh/publications/budgetstatements
https://www.piacghana.org/
Pillar 2: Institutional
Principle 6
6. The governance framework for the SWF should be sound and establish a clear and effective division of roles and responsibilities in order to facilitate accountability and operational independence in the management of the SWF to pursue its objectives.
The Bank of Ghana is responsible for the operational management of the Ghana Petroleum
Funds. The Ghana Petroleum Funds (GPFs) has a three-tier governance structure which ensures
independence from Government interference because the roles of each Committee is well
defined as below:
1. The Foreign Exchange Reserves Management Committee (FERMC) is chaired by the Governor of the Central Bank and is responsible for providing strategic direction to the GPFs.
2. The Ghana Petroleum Funds Investment Committee (GPFIC), chaired by the First Deputy Governor, provides tactical investment direction.
3. The Ghana Petroleum Funds Portfolio Management Committee (GPFPMC), chaired by the Head of Financial Markets Department, implements portfolio decisions, and meets on a bi-weekly basis to
review market developments of the previous week and outlook for the coming week.
The Ministry of Finance is responsible for the overall management of the GPFs and oversees
transfers into and disbursements. The Investment Advisory Committee (IAC) consists of (7) seven independent members appointed by the President and advises the Minister for Finance, on the general performance monitoring of the management of the Ghana Petroleum Funds. The basis of their appointment as well as qualifications are set out in Section 31 of the PRMA and its amendment.
Principle 7
7. The owner should set the objectives of the SWF, appoint the members of its governing body(ies) in accordance with clearly defined procedures, and exercise oversight over the SWF’s operations. The Public Interest and Accountability Committee (PIAC) consists of (13) thirteen independent
members appointed by the Minister for Finance, monitors, and evaluates compliance with the
PRMA by Government and other relevant institutions. The basis of their appointment as well
as qualifications are set out in Section 54 of the PRMA and its amendment.
Petroleum Revenue Management ACT 815
Ministry of Finance
https://www.piacghana.org/
All Petroleum existing in its natural state within Ghana is the property of the Republic of Ghana and is vested in the President on behalf of and in trust for the people of Ghana.
The Minister for Finance is responsible for the overall management of the Ghana Petroleum Funds.
The PRMA established the Ghana Heritage Funds and the Ghana Stabilisation Funds as well as its
objectives. Parliament established the formal framework for the Ghana Petroleum Funds by passing the PRMA into law which was assented to by the President.
The PRMA established the:
1. Investment Advisory Committee to advise the Minister on the general performance monitoring of the management of the Ghana Petroleum Funds.
I. The Minister in consultation with the Governor to nominate the members of the Investment Advisory Committee for appointment by the President.
II. The President of Ghana to appoint the chairperson of the Investment Advisory Committee.
2. Public Interest and Accountability Committee (PIAC) to monitor and evaluate compliance with the PRMA by Government and other relevant institutions.
I. The members of the Accountability Committee to be appointed by the Minister and the
members to elect their own Chairperson from among the members at their first meeting.
3. The Parliament of Ghana provides oversight and approves the budget for petroleum revenues and utilization.
4. The Minister for Finance is responsible for the overall management of the Petroleum Funds and shall oversee the transfers into and disbursements from the Ghana Petroleum funds.
5. The Bank of Ghana is responsible for the day-to-day operational management of the Ghana Petroleum Funds and subsequently the Ghana Petroleum Wealth Fund under the terms of the Operations Management Agreement.
Petroleum Revenue Management ACT 815
Ministry of Finance
Principle 8
8. The governing body(ies) should act in the best interests of the SWF, and have a clear mandate and adequate authority and competency to carry out its functions.
The PRMA established the Investment Advisory Committee to advise the Minister on the general
performance monitoring of the management of the Ghana Petroleum Funds (GPFs i.e. the SWF). They are mandated to: a. Formulate and propose to the Minister the investment policy and management of the GPFs.
b. Advise the Minister on the broad investment guidelines and overall management strategies in relation to the GPFs.
c. Develop for the Minister as part of the investment guidelines, the benchmark portfolio, the desired returns from and the associated risks of the GPFs. The IAC comprises seven members, at least two of whom are women and persons of proven competence in Finance, Investment, Economics, Business Management, Law, or similar disciplines.
These (7) seven independent members are appointed by the President.
Public Interest and Accountability Committee (PIAC) consists of eleven members. These (11)
eleven independent members are appointed by the Minister for Finance.
The Accountability Committee is mandated to:
a. Monitor and evaluate compliance with the PRMA by government and other relevant institutions in the management and use of petroleum revenues and investments.
b. Provide a space and platform for the public to debate whether spending prospects and the management’s use of revenues conform to development priorities.
c. Provide independent assessments on the management and use of petroleum revenues to assist Parliament and the executive in the oversight and performance of related functions respectively.
The Minister for Finance is responsible for the overall management of the Petroleum Funds and is
mandated to oversee the transfers into and disbursements from the Ghana Petroleum funds.
The Minister:
a. Formulates broad policy for the management of the Ghana Petroleum Funds
b. Not less than fifteen days prior to the commencement of each calendar quarter, provides a forecast of the cash requirements for that quarter, including the projected timings and amounts to be transferred to and from the Ghana Petroleum Holding Fund and the applicable Ghana Petroleum
Funds Bank of Ghana is responsible for the day-to-day operational management of the Ghana Petroleum Funds and subsequently the Ghana Petroleum Wealth Fund under the terms of the Operations Management Agreement.
Petroleum Revenue Management ACT 815
Ministry of Finance
Principle 9
9. The operational management of the SWF should implement the SWF’s strategies in an independent manner and in accordance with clearly defined responsibilities.
The Petroleum Revenue Management Act, 2011 (Act 815) gives the Bank of Ghana independent
responsibility of the day-to-day operational management of the funds. An executed Operations
management Agreement (OMA), executed with the Minister of Finance, guides the operational
management and the relationships thereof. The Ghana Petroleum Funds (GPFs) has a threetier
governance structure. This ensures independent management and clear separation of duties.
The Committees are broken down as follows:
1. The Foreign Exchange Reserves Management Committee (FERMC) is chaired by the Governor of the Central Bank and is responsible for providing strategic direction to the GPFs.
2. The Ghana Petroleum Funds Investment Committee (GPFIC), chaired by the First Deputy Governor, provides tactical investment direction.
3. The Ghana Petroleum Funds Portfolio Management Committee (GPFPMC), chaired by the Head of Financial Markets Department, implements portfolio decisions, and meets on a bi-weekly basis to
review market developments of the previous week and outlook for the coming week.
Petroleum Revenue Management ACT 815
Principle 10
10. The accountability framework for the SWF’s operations should be clearly defined in the relevant legislation, charter, other constitutive documents, or management agreement.
The accountability framework is detailed in the PRMA and the Operational Management Agreement.
1. (i) The Ministry of Finance is responsible for the overall management of the GPFs and oversees the transfers into and disbursements from the Ghana Petroleum Funds.
(ii) The Minister submits an annual report on the Petroleum Funds as part of the annual presentation of the budget statement and economic policies to Parliament.
2. (i) The Bank of Ghana presents periodic quarterly financial statements of the Ghana Petroleum Funds and the Petroleum Holding Fund. The Funds are audited quarterly by the Bank of Ghana’s
internal auditors and annually by external auditors.
(ii) The Bank of Ghana publishes semiannual reports on the GPFs, presents the report to Parliament and publish it in two state-owned national dailies and on the website of the Bank.
3. (i) The PIAC, publishes its semiannual and annual report in at least two state-owned dailies and on the Accountability Committee’s website, submits a copy to the President and to Parliament. (ii) Hold public meetings twice each year to report on its mandate to the general public.
Ghana Petroleum Funds – Bank of Ghana
Principle 11
11. An annual report and accompanying financial statements on the SWF’s operations and performance should be prepared in a timely fashion and in accordance with recognized international or national accounting standards in a consistent manner.
Based on the requirements of the PRMA, the bank of Ghana submits to the Auditor-General the
financial statements and relevant documents on the Petroleum Funds for audit not later than three
months after the end of its financial year. The Auditor General also submits thereafter to Parliament within thirty days of completion of the External Audit . Since inception, the GPFs have
been audited by reputable international audit firms.
The annual reports are also published on the Bank of Ghana website.
GPF Financial Statements – Bank of Ghana
Principle 12
12. The SWF’s operations and financial statements should be audited annually in accordance with recognized international or national auditing standards in a consistent manner.
The Bank of Ghana in line with the PRMA, prepares an annual report on the Ghana Petroleum Funds
which is in accordance with the International Public Sector Accounting Standard (IPSAS) as issued by its Board. The international external Auditor (currently KPMG) attests annually that the financial
statements are prepared in accordance with International Public Sector Accounting Standards
(IPSAS) and the PRMA Act. The Internal Audit Department of the Bank of Ghana also audits the Ghana Petroleum Funds on a quarterly basis.
Principle 13
13. Professional and ethical standards should be clearly defined and made known to the members of the SWF’s governing body(ies), management, and staff.
The management of petroleum revenue and savings is always carried out in accordance with the highest internationally accepted standards of transparency and good governance. The code of ethics sets out the principles that everyone who works for the Bank of Ghana must follow.
PRESS-RELEASE-Ethics-and-Internal-Investigations-Unit.pdf (bog.gov.gh)
Principle 14
14. Dealing with third parties for the purpose of the SWF’s operational management should be based on economic and financial grounds, and follow clear rules and procedures.
The Bank of Ghana’s dealing with third parties as a day-to-day operational manager is driven by
financial and economic considerations with clear established procedures. Additionally, the Bank of Ghana as stipulated by law, is required to provide a report to the Minister on the appointment of Fund Managers detailing the services to be provided, the proposed level of fees, the proposed benchmark, the levels of insurance cover against exposures and the information concerning the procurement process that is necessary to inform the Minister that the process was undertaken in accordance with the Public Procurement Act, 2003 (Act 663)
Petroleum Revenue Management ACT 815
Principle 15
15. SWF operations and activities in host countries should be conducted in compliance with all applicable regulatory and disclosure requirements of the countries in which they operate.
All the Ghana Petroleum Funds’ operations and activities in host countries are conducted in
compliance with all applicable regulatory and disclosure requirement via our two international
custodians (currently Euroclear and FED NY). The investment process of the Ghana Petroleum Funds is supported by a robust and rigorous risk management framework.
Risk Management Framework – Bank of Ghana
Principle 16
16. The governance framework and objectives, as well as the manner in which the SWF’s management is operationally independent from the owner, should be publicly disclosed.
The Bank of Ghana publishes semi-annual reports on the GSF and GHF, in two state owned daily
newspapers and, on the website, not later than 15 February and 15 August of each year. This also
reported to Parliament. Disclosed financial information includes investment income and holdings, annualised rates of return etc. Additionally, the Ghana Petroleum Funds audited financial statements are published in an annual report, which is publicly available.
Ghana Petroleum Funds – Bank of Ghana
Principle 17
17. Relevant financial information regarding the SWF should be publicly disclosed to demonstrate its economic and financial orientation, so as to contribute to stability in international financial markets and enhance trust in recipient countries.
Pillar 3: Investment
Investment and Risk Management Framework.
Principle 18
18. The SWF’s investment policy should be clear and consistent with its defined objectives, risk tolerance, and investment strategy, as set by the owner or the governing body(ies), and be based on sound portfolio management principles.
18.1. The investment policy should guide the SWF’s financial risk exposures and the possible use of leverage.
18.2. The investment policy should address the extent to which internal and/or external investment managers are used, the range of their activities and authority, and the process by which they are selected and their performance monitored.
18.3. A description of the investment policy of the SWF should be publicly disclosed.
The investment guidelines, policy and risk framework for the management of the Ghana Petroleum Funds are underpinned by the objectives as laid down in the PRMA and Operational Management Agreement (OMA). The investments of the Ghana Petroleum Funds are only in the qualifying instruments (debt instruments denominated in internationally convertible currency that bears interest and is of investment grade, internationally convertible currency deposit) prescribed by Executive Instrument. Derivative instruments may only be used for hedging to reduce the risks associated with the underlying instruments held in the portfolios.
Although the Funds are currently 100% internally managed by the Central Bank, the Bank can enter
into a contract with an external fund manager in its own name and may appoint external fund managers subject to a fair and transparent procurement process according to the Bank’s internal procedures.
Petroleum Revenue Management ACT 815
Principle 19
19. The SWF’s investment decisions should aim to maximize risk-adjusted financial returns in a manner consistent with its investment policy, and based on economic and financial grounds.
19.1. If investment decisions are subject to other than economic and financial considerations, these should be clearly set out in the investment policy and be publicly disclosed.
19.2. The management of an SWF’s assets should be consistent with what is generally accepted as sound asset management principles.
The resources of the Ghana Petroleum Funds are invested in qualifying instruments prescribed by the Executive instrument. The investment policy and guidelines for the management of the Ghana Petroleum Funds are underpinned by the objectives to cushion the impact on or sustain public expenditure capacity during periods of unanticipated petroleum revenue shortfalls, support development for future generations when the petroleum reserves have been depleted and receive excess petroleum revenue within an agreed risk management framework.
All investment activities are performed in line with the highest standards for sound asset management and on the basis of economic and financial necessity.
Petroleum Revenue Management ACT 815
Ministry of Finance | Ghana (mofep.gov.gh)
Ghana Petroleum Funds – Bank of Ghana
Principle 20
20. The SWF should not seek or take advantage of privileged information or inappropriate influence by the broader government in competing with private entities.
In line with the requirement of the PRMA, the SWF cannot invest in its Sovereign State, i.e.
Republic of Ghana. It does not trade on any privileged information, and therefore there is no
risk of competing with private entities.
Petroleum Revenue Management ACT 815 | Ministry of Finance | Ghana (mofep.gov.gh)
Principle 21
21. SWFs view shareholder ownership rights as a fundamental element of their equity investments’ value. If an SWF chooses to exercise its ownership rights, it should do so in a manner that is consistent with its investment policy and protects the financial value of its investments. The SWF should publicly disclose its general approach to voting securities of listed entities, including the key factors guiding its exercise of ownership rights.
The Ghana Petroleum Funds does not currently have a mandate to invest in equities.
Principle 22
22. The SWF should have a framework that identifies, assesses, and manages the risks of its operations.
22.1. The risk management framework should include reliable information and timely reporting systems, which should enable the adequate monitoring and management of relevant risks within acceptable parameters and levels, control and incentive mechanisms, codes of conduct, business continuity planning, and an independent audit function.
22.2. The general approach to the SWF’s risk management framework should be publicly disclosed.
The investment process of the Ghana Petroleum Funds is supported by a strong risk management
framework. The framework of compliance rules is coded into the investment platforms which are
monitored and implemented by the Risk Management and Compliance Unit.
The Ghana Petroleum Funds are compliant with the Bank of Ghana’s International Standards
Organisation (ISO 27001) and is subject to semiannual surveillance by an external ISO auditor.
Risk Management Framework – Bank of Ghana (bog.gov.gh)
Principle 23
23. The assets and investment performance (absolute and relative to benchmarks, if any) of the SWF should be measured and reported to the owner according to clearly defined principles or standards.
The Bank of Ghana reports on the assets and investment performance of the Ghana Petroleum
Funds on a quarterly and semi-annual basis. In line with The Petroleum Revenue Management
Act (2015), Act 893 the two semi-annual reports are submitted to the Parliament of the Republic of
Ghana, the Investment Advisory Committee in addition to publishing these on the Bank of Ghana
website and in two national dailies.
Petroleum Revenue Management ACT 815 | Ministry of Finance | Ghana (mofep.gov.gh)
Ghana Petroleum Funds – Bank of Ghana (bog.gov.gh)
Principle 24
24. A process of regular review of the implementation of the GAPP should be engaged in by or on behalf of the SWF.
The Bank of Ghana will review adherence to the IFSWF Generally Accepted Principles and Practices
(GAPP) on a regular basis going forward.