Finance Minister inaugurates National Risk Management Committee

Accra, June 9, GNA - Finance Minister, Dr Kwabena Duffuor, on Thursday inaugurated a nine-member National Risk Management Committee with a call on members to use their expertise to help mitigate the price risk of crude oil on the economy.

The Committee is tasked to design and implement a risk management programme that would ensure stability in crude oil prices in the domestic market as well as for exports.

Ghana has since October last year hedged 50 percent of its monthly consumption of two million barrels of crude oil to prevent rapid increases in domestic prices.

It has also recently hedged its share of production of crude oil from the Jubilee field at $107 from May to December.

Dr Duffuor said the risk management program was primarily an insurance programme to buy protection to ensure that over a reasonable period, there was a predictable maximum price for consumption and a minimum price for the country's exports.

"It must be emphasized that our hedging positions are not designed to make speculative profits," he said.

The Minister said it was prudent to hedge crude oil prices as unpredictability in commodity prices had been a major source of instability in the economy.

He said recent concerns over hedging challenges across the world necessitated the move by government to develop oversight and internal control systems for derivative activities.

Among other things, the control system aims at establishing overall risk management policies for government, approve and implement monitoring systems, ensure adequate controls and provide the public information on risk management policies.

Dr Duffuor said a technical team at the Ministry of Finance and Economic Planning would support the Committee's operations.

Mr Samuel Appah, Chairman of the Committee, pledged the members commitment to work to attain the goals of the programme.

Other members of the Committee are Mr Kweku Awortwi, Chief Executive Officer (CEO), Volta River Authority, Mr Alex Mould, CEO of National Petroleum Authority and Dr Thomas Akabazaa of the Ministry of Energy.