Senior Vice President of think tank, IMANI Africa, Kofi Bentil, has described the country’s management of its natural resources, especially oil, as poor.
According to Mr Bentil, the poor management of Ghana’s natural resources makes it impossible for the country to fix its revenue-income conundrum.
“I remember when the oil was coming on stream, there were meetings; people flew to Norway learning about what to do. We passed the PRMA [Petroleum Revenue Management Act] and we said 70% must go into infrastructure. But we have managed to make a total mess of it. When it comes to the management of oil revenue, we have done the worse,” he lamented.
The debates about the best way Ghana should manage its oil revenues begun since 2007 when Ghana discovered oil in commercial quantities.
Many experts, however, believe that governments must ensure total accountability by complying strictly with the Petroleum Revenue Management (Amendment) Act (893).
After many years, the challenges with the appropriate use of oil revenues persist.
For instance, the Public Interest and Accountability Committee (PIAC) in 2018 indicted government for its breaches of the country’s oil revenue management laws.
The Committee in its 2018 report revealed that government’s majority use of the oil money was in non-capital projects including the Free Senior High School (SHS) policy, leaving only 37 per cent of the utilised Annual Budgetary Funding Amount (ABFA), to be used for capital expenditure.
Describing its findings as worrying, PIAC made a number of recommendations for the consideration of key state actors involved in the management of Ghana’s petroleum revenues including ordering the Finance Ministry to comply with the provisions of Section 21 (4) of Act 815 in respect of public investment expenditure.
Backing these concerns by PIAC at a breakfast meeting organised by Graphic Business in partnership with Stanbic Bank, Mr Bentil said it was important for generations unborn to also feel the impact of the revenue generated from oil.
“We should acknowledge that; even if we don’t do anything with the oil money and we decide to put all of it into infrastructure, it will not be enough and secondly it will be the best use of that money because that has the potential of affecting you personally and your business.
“We are talking about water, health, transport, telecommunications, roads, talking about energy and education. That will have an effect on you. But what we are dealing with right now is a situation where the law has loose ends and at every loose end we are stretching it,” he said.
He was not finished.
“What is happening is this: we are pooling all that money and basically spending it. We have little to show for oil revenue.
“We need to contemplate very seriously what we are going to do, to tie down and save ourselves from ourselves and make sure we have something to show for oil because it is the kind of blessing that God just dropped on us but so far we have done the worse job possible.”
Former Finance Minister, Seth Terkper, who was also at the forum, said if revenue generated from the country’s resources especially oil is not put to good use, Ghana stood the risk of becoming like Nigeria and Angola — which have been accused of using their revenue for consumption instead of tangible projects that can be felt and in turn affect the people positively.
“When we say in our wisdom that we are setting up a sinking fund to pay down debt and used $550 million of our oil revenue to pay the first sovereign bond, I think this is a better physical treatment than forcing the country to use the sinking fund to reduce the deficit. This is because if you force the country to use the sinking fund to reduce the deficit, then it is nothing but consumption,” the former Finance Minister said.
The breakfast meeting was held under the theme “Breathing a new lease of life for our economy: Fixing the revenue-income conundrum’.
Panelists include, Albert Touna Mama who is the IMF Country Director and Abeku Gyan-Quansah who is a Tax Partner at auditing firm, PwC.