The Ghana Civil Society Platform on Oil and Gas, an umbrella body of civil society groups working toward ensuring transparency and accountability in the oil industry in Ghana, has launched a report on the country’s preparedness to grapple with its new status as an oil producing nation. The report is entitled “Ghana’s Oil Boom: A Readiness Report Card.”
The report card
“This report aims to evaluate the performance of government in managing the challenges the emerging oil sector presents and to draw attention to issues that need immediate action by the government and its partners,” said Mohammed Amin Adam, the group’s convener, quoting from the report during the launch. “These challenges include, among others, addressing the large gaps in the legal framework …so the country can make the most out of the billions of dollars the government will receive from revenue in the oil sector.”
He revealed that the report scored the country a C, which many a commentator saw during the launch as a fair enough mark.
“The space for CSO engagement has been opened with the launch of this report,” said Steve Manteaw, chairman of the group.
“A big milestone has been achieved by the civil society in Ghana,” added Moussa Ba, Oxfam America’s West Africa regional coordinator for extractive industries. “This report raises key issues of transparency and accountability in the oil sector and opens the space for proactive and constructive dialogue among the relevant stakeholders.”
Since the oil boom
Oil was discovered in Ghana in commercial quantities in 2007. And with the commencement of production last December, after more than three years of intensive and intricate work and the injection of more than $3.5 billion dollars by licensed oil interests, there have been fears that the economic and democratic gains of the past two decades could be eroded by a sudden surge of oil wealth. Large-scale corruption and internal strife have followed the discovery of oil and its wealth in many developing countries. What is more, West Africa, with its abundance and diversity of mineral resources still records one of the highest rates of poverty in the world. But Ghana’s government officials have repeatedly allayed these fears.
Civil society organizations have been engaging the various arms of government with a view to ensuring that adequate regulatory mechanisms and a legal framework are in place to guarantee accountability and probity in the management of the envisaged proceeds from oil.
Striking the right balance
“With the commencement of oil production and the general elections coming up next year, all eyes are on Ghana to get it right,” said Adam. “After more than a decade of sustained international focus on addressing the ‘resource curse,’ and after a failed experiment in Chad designed to turn oil revenues into poverty reduction, many have pinned their hopes on our country.”
Ishac Diwan, Ghana’s country director of World Bank, commended the initiative of putting the report together.
“Oil could be managed better than gold to become a blessing in Ghana. Oil brings with it technological development and economic stability, but these processes take some time,” he said. “We are talking about first oil, mind you, and a production capacity of about 70,000 barrels per day. The potential could be there for several million barrels per day and that poses a different challenge. I have no doubt whatsoever about Ghana’s ability to manage this, judging by the way things are going.”
Ian Gary, Oxfam America’s senior policy manager for extractive industries, noted that Oxfam America has been working with civil society organizations in Ghana since 2007 when oil was found in the country.
“The progress made is significant in preparing for the oil sector,” said Gary. “There is a perceptible degree of openness. However, there is still need for transparency in issues pertaining to contracts, a legal framework for an independent regulatory authority, and strong environmental regulations.”
“The civil society in Ghana has assisted the Parliament in Ghana in no small measure in making laws that will make oil a blessing and not a curse,” said Moses Asaga, the parliamentary chairman of the Sub-committee on Energy and Mines. “The Parliament should also be commended. People should be appreciative of the inherent difficulties as there are no perfect laws. There will always be avenues for improvement.”
He noted that very wide consultations were made and various interests addressed in the making of the Petroleum Revenue Management Bill and that work has also commenced on the Local Content Bill. He said he was of the view that there should be open and competitive bidding for oil blocs in the western region of Ghana. “The platform will push for it to be extended to the other parts of the country,” noted Adam.
Helping to guide the industry
Inusa Fuseini, Ghana’s deputy minister of energy and mines, said that the report raises very interesting issues that will guide government action with regard to the petroleum industry.
“At every stage in this process government has been guided by the desire to ensure transparency and accountability in the oil industry,” he said. “This has been evidenced in the content of the emerging legal instruments which witnessed extensive consultations and addressed important issues such as institutional arrangement, economic and environmental challenges, and energy concerns.”
He described the launch of the report as “a giant step toward the realization of the dream of Ghana”.
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