wpid-money-bag-ghana-cedi.jpgBy Seibik Bugri (IFEJ) ( with files from RWI)




?Trillions of dollars in resources lie buried in the backyards of many of the world?s poorest citizens. Oil, gas and minerals can, if managed effectively and accountably, stimulate economic development. Too often, however, secrecy, corruption and weak institutions obstruct this path?. Does this reflect the situation of Ghana?s oil discovery?


To find answers, a forum of experts and various stakeholders met to evaluate the above statement against Ghana?s oil find. Organised by the African Centre for Energy Policy (ACEP) in collaboration with the Friedrich Ebert Stiftung (FES), it sought to find out if our oil revenues ?three years after the find has achieved its aim of being used effectively and to ?stimulate the economy ultimately reducing poverty?. Participants were undivided that so far indicators are that if care is not taken, Ghana will go the way countries such as Nigeria and Gabon to mention a few have travelled.


And rightly so, the latest Global Financial Integrity Report rightly captures not only the fears of the participants but revealed that Ghana lost over $ 4 billion through illicit financial flow in the extractive industries.


To advance the understanding of this challenge, the?Revenue Watch Institute (RWI) an NGO,?has produced the Resource Governance Index, a collection of research, rankings and analysis that measures the quality of governance in the oil, gas and mining sector of 58 countries. Together, these nations produce 85 percent of the world?s oil, 90 percent of its diamonds and 80 percent of its copper, generating trillions of dollars annually. The future of these countries, both developed and developing, depends on how well they manage their resources for the common good.


Poverty Reduction


It appears our country Ghana has learnt nothing and have forgotten nothing. Just like Cocoa, Timber, Gold (which yields more than oil) and exporting them raw has brought not more than a pittance to Ghana and many other countries. And yet Ghana does not seem to bother. Is this a failed system or a failed leadership some stakeholders wanted answers? Why are we not talking about value addition to rake in more from this oil exports to reduce poverty and to stimulate the economy?

This is a country where agriculture engages 60% of Ghanaians is that not the future? It emerged that we, yes we (Ghana) have good policies but we deliberately do not implement them particularly where its outcome does not favour us.


Contributing, the resident Director of? FES, Daniela Kuzu say the financial turbulence being experienced in the donor countries should serve as a warning to African countries and that donor fatigue is gradually catching up with Ghana. She suggested that Ghana invest and use the profits to support the budget. Questions as to whether Ghana must revisit the priority areas that the Petroleum law, which in part allows the discretions of the Minister or whoever is in-charge to decide for example what constitutes ?infrastructure development? and therefore allocates oil revenue to that sector must be revisited. And is because already the manner in which oil revenue is being distributed leaves much to be desired. Prompting a call from a stakeholder, the TUC to a call for a second look at the law and suggesting that if physically Ghanaians cannot see and pin point out what the oil revenue has been used for since its discovery, then the oil revenue must be shared for every Ghanaian physically in what is called a direct transfer of cash.



It also emerged that Ghana has not built its absorptive capacity to take advantage of other auxiliary jobs that are created and eventually reduce poverty.? So experts were asking if the country is consciously working to build that capacity. Consequently, jobs that would have come to Ghanaians and ultimately reduced poverty are taken over by foreigners. A phenomenon the World Bank is not comfortable with.


Again participants called for a blue print that binds successful governments and technocrats to follow strictly laid down requirements without the power to waver. This has been seen as a factor that does not allow the state to maximize the benefits it deserves. An oil expert, Dr. Joe Asamoah called for explicity and clearly spelt what percentage of the revenue should be sent where. Oil experts say available evidence show that just in three years of the oil revenue; accusations show that the current arrangements or law that allows the Minister a wide latitude and discretion is not helping Ghana. For instance, it allows the Minster to decide what Infrastructure is and subsequently allocates millions of oil revenue to that sector.


Implementation Challenges

What Ghanaians should be concerned about is what would have happened if Ghana did not have oil?? The track record of politicians is that they will use the funds to favour them irrespective whether is in the public good or not.? Participants wanted to know what the ? 65 million allocated to the office of the President (which nobody is questioning) was used for in the name of infrastructure development. They were worried that Ghana lacks a development blue print which could have guided us as how the funds or revenue be used.?? How can $1 billion dollars be used in this country and no one can pin point any single project physically participants questioned? The challenge here is the law ?the Petroleum Revenue Management Law (PRM) Act 815.


A cautioned was sounded that no company or investor in the industry is interested in building the capacity of workers and that if Ghana does not start doing something about that now, soon we or Ghana will be holding another workshop to talk about the same issue over and over again.


Anaba Bernard of ISODEC- wondered if there was any sector of the economy which was not of priority area as required by the law and which needed to be left out for the moment. What is of concern, referring to what the law said should be areas of priority, Mr Anaba noted that what is very important should be value addition otherwise, it is business as usual as the current expenditure pattern is an indicator that if care is not taken Ghana will travel the path of Nigeria or Gabon and many countries with oil and yet its benefits cannot be seen. Reinforcing the above unfortunate situations, an Energy Economist, Mohammed Amin of ACEP explained that there has been the recurrence of some development projects in the Annual Budget which are used by the authorities to divert oil resources causing budget overruns. He also called for a streamlining of the priority areas as demanded by the constitution. He pointed out that there has been instances where some projects where executed without feasibility studies. And this is not a good practise as there will not be a termination point. Indeed he mentioned that Ghana should take lessons on good practises from elsewhere. And noted that there was a lot of political influences in the awards of contracts which are done in secrecy and the law does not allow transparency. In whose interest is that?

Civil Society

Conclusions drawn were that a more forceful civil society needs to emerge to press all stakeholders and hold those in-charge to do the right thing and let the oil revenue benefit the all society especially the poor and not politicians. The FES wanted to find out if there is more revenue from the oil than gold which rakes in thousands and yet is not monitored? She explained that donors are gradually focussing on other areas of the world and that Ghana needs to manage her resources prudently otherwise danger looms. She adds someday the donor community will say thanks you Ghana and off they are gone. And the scenario of Tunisia, Libya and Egypt to mention a few will emerge.


Concluding, Major Daniel Sowa Ablorh of Public Interest and Accountability Committee (PIAC) urged participants and civil society to stimulate a discussion geared towards a productive spending of the oil revenue especially areas that will transform the economy which does not happen by chance but by consciously channelling the revenue into those sectors he urged.? ?If we continue to treat the revenue as business as usual, there will be no evidence for people to see? and urged that Ghana should learn from other extractive industries especially what is happening in the mining towns.


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