Business News Wed, 3 Aug 2016

Ghanaians demand robust laws on petroleum

Majority of Ghanaians want the next government to develop and pass a robust law that will guide operations in the upstream petroleum sector in the country.

They also want a law to inspire growth in the emerging sector; a new study has revealed.

The study which was conducted by the Africa Centre for Energy Policy (ACEP), is aimed at holding government accountable, informing and educating citizens of alternative policies for the petroleum and energy sector.

The "Citizens Agenda for Energy Sector Development" which is also called the "Citizens’ Energy Manifesto" provides a platform for using democratic elections as an instrument for generating policy reforms, building political consensus on policies and holding elected officials accountable for their promises.

Launching the study in Accra, the Executive Director of ACEP, Dr Mohammed Amin Adam, said the process of developing the manifesto has involved many Ghanaians whose dedication to seeing their country develop could not be ignored.


Petroleum law

For about three years, the Petroleum (Exploration and Production) Bill, that will define Ghana’s new exploration environment, is before Parliament.

The bill contains some of the most progressive global best standards for the governance of petroleum resources, such as the use of open and competitive bidding processes for granting petroleum contracts and mandatory requirements.

However, sections of the bill also provide for broad ministerial discretion for vetoing the results of an open and competitive process in favour of direct negotiation with any company of the Minister’s choice.

But the bill does not also require the disclosure of the eventual beneficial interest owners in petroleum contracts.


These gaps can only provide room for corruption and rent seeking behaviour in the petroleum industry.

Political control

According to the study, the management and operational decisions of the Ghana National Petroleum Corporation (GNPC) must be insulated from political control.

GNPC has recently been in the news for a number of reasons including allegations that border on it advancing money meant for its core exploration functions to the Ministry of Finance as well as investing in non-core activity.

Some of these decisions have been blamed on the strong political hold on management decisions of the corporation.


Considering that the corporation is the national vehicle for positioning Ghana to harness the potential of the petroleum wealth, it is important to know the model under which the corporation will be restructured.

Investing the oil revenue

The study also revealed that majority of Ghanaians want the next government to make the allocation of petroleum revenues to pro-poor investments the cornerstone of accelerated poverty reduction.

Countries that have failed to realise the transformative effect of oil wealth are those that fail to invest their revenue in pro-poor development projects that ensures equitable distribution of the wealth and to build a social capital to support medium to long-term development.

Ghana’s education, agriculture and health sectors that employ the largest number of the citizens and which provide social and economic infrastructure for accelerated development remain under-funded, in spite of initiatives such as the Ghana Education Trust Fund (GETFUND) and National Healt Insurance Scheme (NHIS).

Factors responsible for these developments range from fiscal indiscipline, weak investment capacity, poor development planning and weak accountability.

Source: Graphic.com.gh