Story by Malise Otoo
Ghana as a country has scored 13th in a global resource index conducted by the Resource Governance Institute which assessed 81 resource-rich countries that govern their oil, gas and wealth.
The country’s oil and gas sector scored a satisfactory 67% point in the 2017 Resource Governance Index, making it the best performer in sub-Saharan Africa.
The index results confirm challenges with national budgeting, rules specific to petroleum revenues that do not provide for adequate safeguards against budget deficits and debt accumulation.
Again, the index showed significant gap in governance quality between Ghana’s oil and gas mineral sectors.
However, according to the RGI, in oil and gas, Ghana performs consistently across all three components of resource governance, that is, value realization, revenue management and enabling environment.
But in terms of management of its revenue resources especially with regards to support to the National budgeting, it has performed poorly.
It is noteworthy that although Ghana started commercial production of oil in 2010, it has not been able to perfect its Public Financial Management System to benefit fully from petroleum revenues accrued from the exploitation of these hydrocarbons.
Some oil experts have argued that for oil rich countries to avoid the Dutch disease, it may be important not to overly focus on regulatory regimes, licensing or open and competitive contracts, but an overall strengthening of the country’s public financial management system is critical for its national development.
Thus, it is not enough to have laws exposing corruption in the sector, but an effective system to manage the revenues realized from the resources is of utmost important and must be given top priority.
In the end, therefore, the public needs to benefit from oil revenues and various African countries including Ghana needs to take key and fundamental steps in ensuring this.
For instance, the Public Interest and Accountability Committee (PIAC) made some key findings in their report on management of petroleum revenues for 2016 that, actual petroleum receipts in 2016 of US $247.18 million was 29% lower than the budgeted amount of US$ 348.42 million and translates to 38% year-on-year decline in annual petroleum revenues when compared to the 2015 receipts of US$ 396.17 million.
Similarly, the committee says it carried out physical monitoring of the Annual Budget Funding Amount (ABFA) funded projects in selected districts in the Northern, Upper East and West Regions in collaboration with representatives of the Institute of Finance and Economic Journalists (IFEJ) where it discovered that three out of six project sites visited were non-existent.
Emmanuel Kuyole, NRGI Consultant presenting key findings of the 2017 RGI said, ‘‘resource governance differs significantly between regions with the report tackling about 2/3rd of people living in poverty.
The average score for Sub-Saharan Africa is 43 with only four countries in the good category’’. Furthermore, he stated, ‘‘there is limited transparency and accountability around quasi-fiscal spending, political influence in senior management and Board selection and a lack of transparency around progress made against corporate strategy’’.
The Natural Resource expert noted that governments have consistently published oil revenue projects but the same has not been done for mining revenues.
Lastly, the Deputy Minister of Lands and Natural Resources, Hon. Benito Owusu Bio in his remarks congratulated Ghana in the latest RGI index but was optimistic the country could do even better in subsequent surveys.
He observed that although Environmental laws have not effectively been enforced with regard to mining, his administration will see to a paradigm shift in enforcement to avert any future dire consequences with regards to small scale mining.
‘‘There is currently a stop to the issuance of any mining licenses to small scale miners to help streamline and bring sanity into the system.
A five year development plan has been developed also to stop illegal mining.
The plan will see illegal miners being registered into groups so that their operations can be monitored and legalized when given the licenses. 14 mining courts have also been set up across the country to deal with mining offences going forward’’, he said. email@example.com