Ghana's oil revenue to decline by 2017

Nov 24, 2009 01:00 AM

Ghana's enthusiastic efforts to become a major oil industry player in Africa would be short lived, as the country would only mine the Black Gold for just 20 years. Furthermore, data from the World Bank and International Monetary Fund have projected that Ghana's could rake in a total of $ 247.44 mm as oil revenues in 2011 and would decline to $ 1,550 in 2017.
Additionally, the short term, the expected revenue would not be sufficient for national expenditure, to this end, civil society organizations are calling on the Ghanaian Government, as a matter of urgency, to develop and implement a fiscal regime that would make the oil industry very attractive to investors as well as much of the economic rent as possible in the form of taxes and royalties.

At the Ghana Research and Advocacy Programme (G-RAP) 2009 Convention in Accra, Dr Cheryl Gopaul, CIDA, Co-Chair, Governance Sector Group, urged the government to be a strong negotiator with international multinational corporations thus ensuring an appropriate royalty structure so that the country gets the best and fair price for the sale of its oil and oil rights.
To ensure administrative governance in the oil and gas industry, she pointed out that institutions needed to be strong with the requisite capacity to be effective and efficient. These included technology, knowledge and communication and negotiating skills, whiles the individual institutions needed to be transparent and accountable they must also work in a collaborative and complementary manner so that the overall institutional framework for oil and gas is a cohesive whole.

For instance, the Ministry of Food and Agriculture, Fisheries Commission, and Ministry of Ministry of Energy should work in tandem for mutually accountable results. It means that each institution must be prepared, must be clear about their responsibilities and also their collective roles to avoid operating in a vacuum or in a fragmented manner, Dr Gopaul warned. Apart from the institutions, regulations, policies, programmes and plans must be consistent, compatible to each other and fit in as part of a larger coherent regulatory framework.
She emphasized the need for strong natural resources and environmental governance, mitigation and management of environmental impacts, risk management strategies and contingency planning in the event of a disaster-health and safety issues for the workers and the general population.

Touching on the theme "Transparency, Accountability and Development of the oil and gas industry in Ghana", the Vice Chairman of G-RAP Board, Professor Kwame Ninsin warned that if the oil resources should be handled reckless, they may portend a future that was pregnant with far-reaching economic, social and political implications, including serious security consequences for the country.
Indeed, an appraisal of the cocoa and gold industries, show contrasting impacts which can only be attributed to differences in their respective structure of ownership and control. The fact that ownership and control of the cocoa industry is by the indigenous people of the country, wealth arising from it accrues substantially to the producers notwithstanding the mediation of the global market and the intervention of the state to save part of the surplus for a larger purpose.

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