Ghana scores high on mining governance index

Ghana ranked 15 out of 58 countries earning the highest score in sub-Saharan Africa, reflecting major reforms to improve competition and transparency in the mining sector, a new governance index released on Wednesday said.

The country has taken giant steps to improve mining governance and limit corruption, but the government still grapples to give citizens the information they need to assess whether they get a good deal from mining companies, the index said.

The Revenue Governance Index by the Revenue Watch Institute (RWI) measures the quality of governance in the oil, gas and mining sector of 58 countries worldwide.

A statement issued on Wednesday and copied to Ghana News Agency said each country on the index, from top-ranked Norway to last-place Myanmar, is judged on four criteria: legal framework, transparency levels, checks and balances, and its broader governance context.

Liberia ranked 16th on the index, Zambia-17, South Africa-21, Botswana-30, Nigeria-40. Angola came 41st, Equatorial Guinea-44 with the Democratic Republic of Congo occupying the 56 position.

The statement said 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 kept secret from the public.

Mr Emmanuel Kuyole, RWI Regional Coordinator for Africa said: “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 the government is getting a good deal, and that companies are paying what is due.”

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.

The country 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,” Mr Kuyole said.

“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,” he said.

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

Government has already published some contracts with oil companies, and should make it a priority to publish mining contracts as well, he said.

The country 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 noted the need for clear guidelines and information on the 10 per cent 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 per cent of mining royalties, is not currently covered by regulation, leaving it vulnerable to mismanagement.

The index prescribed that for mining projects to fully benefit communities, government should encourage local content policies that help transfer important skills to communities and develop local businesses so that there is a lasting impact on the economy.

It added that local development programmes and those of communities should be fully involved in environmental and social impact assessments and have access to the results.

“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,” said Daniel Kaufmann, President of Revenue Watch.

“By pointing to reforming states and to solutions, we reject the tired notion of the deterministic ‘resource curse’,” he added.

In its measure of governance, the index focuses on transparency, integrity and accountability rather than other performance indicators related to extractive efficiency or optimisation of revenues.