Ghana ranks top in Sub-Saharan Africa on Resource Governance Index

Ghana ranks number one in Sub-Saharan Africa when it comes to natural resource governance, a new index released by the Revenue Watch Institute shows.

The governance index released today, May 15, 2013 says that although Ghana has taken important steps to improve mining governance and limit corruption, the government has failed to give citizens the information they need to make sure they are getting a good deal from mining companies.

According to Revenue Watch Institute’s Regional Coordinator for Africa, Emmanuel Kuyole, the lack of systematic access to information on the licensing process and contract terms leaves a black hole in the information citizens need to make sure that that government is getting a good deal and that companies are paying what is due.

The Revenue Watch Institute’s Resource Governance Index measured the quality of governance in the oil, gas and mining sector of 58 countries worldwide.

Each country on the index, from top-ranked Norway to last-placed Myanmar, is judged on four criteria: legal framework, transparency levels, checks and balances and broader governance context.

Ghana ranks 15th out of 58 countries and earned the highest score in sub-Saharan Africa, reflecting major reforms to improve competition and transparency in the mining sector.

However, while lawmakers are required to oversee the industry, they often lack the resources to do so effectively, and contracts between mining companies and the government are still kept secret from the public.

Ghana’s index score applies to the country’s mineral sector only, but researchers noted major efforts by the government to improve transparency in the growing oil and gas sector as well.

Ghana has signed on to the Open Government Partnership and the Extractive Industries Transparency Initiative (EITI). It now includes both petroleum and mining revenues in its EITI reports.

“Ghana’s participation in the EITI has contributed remarkably to the information available on the sector, such as production, prices and revenues, and the distribution of royalties to district assemblies. The weaknesses identified in these reports have led to fiscal reforms designed to increase revenues. We now need to ensure that the regular and timely publication of EITI reports is enshrined in law,” Kuyole said.

The index offers recommendations for even the highest-ranking countries, and notes specific areas where Ghana could improve.

Noting that the government has already published some contracts with oil companies, it urges that publishing mining contracts as well, should be a priority.

Ghana still has not passed a freedom of information law that guarantees access to important information on the oil and mining sector, a critical issue that the Open Government Partnership is working to address.

Index researchers also noted the need for clear guidelines and information on the 10 percent share of mining royalties that are managed by the District Assemblies and traditional authorities in mining communities. Similarly, the Mineral Development Fund, which receives a further 10 percent of mining royalties, is not currently covered by regulation, leaving it vulnerable to mismanagement.

According to the President of Revenue Watch Institute, Daniel Kaufman, “the index analysis not only shows where we are now, but points out ways forward for countries, companies and global initiatives, and this matters because improved governance in natural resources is arguably the development challenge of this decade".