Citizens winning transparency battle

...But challenges still remain

Government’s decision to now publish rental payments by oil companies as part of revenue reporting and the lodging of payments of the Saltpond Offshore Producing Company Limited (SOPCL) in the official petroleum designated account are signs that pro-transparency groups are winning the battle for openness.

Equally, the replacement of flow metres of the Floating, Production, Storage and Offloading (FPSO) vessel at the Jubilee platform are encouraging.

On the other hand, the lack of legislation for mandatory disclosure of contracts and the continued use of the open door policy as the sole contracting process constitute a major drawback.

Consequently, Mr Mohammed Amin Adam, Executive Director of the Africa Centre for Energy Policy (ACEP), has recommended a hybrid contracting system comprising open and competitive bidding for de-risked areas and the existing open door system for areas where the nation is not so sure of the potentials.

Mr Adam made the recommendation in Accra on Wednesday when he and Mr John-Peter Amewu, a Research Fellow at ACEP, jointly presented on “Transparency in Ghana’s oil and gas revenue” at a roundtable. The discussions formed part of the Institute of Economic Affairs (IEA) oil and gas series and were meant to promote and encourage debate among industry experts on transparency in the sector.

For his part, Mr Amewu stressed the need for the Ghana National Petroleum Corporation (GNPC) to be transparent and avoid the secrecy that surrounds the operations of many National Oil Companies (NOCs) around the globe. According to him, NOCs are notorious for opacity and this often fosters attempts by politicians to control the companies for parochial gains.

Besides, it is important for the state to take keep interest in how oil companies reported their operational costs as weak monitoring could lead to companies overloading costs, thereby reducing their tax obligations as well as the country’s entitlements.  

 It would be recalled that a lot of expectations greeted Ghana’s oil find a few years ago and these stirred strong advocacy for transparency and accountability which were key requirements missed by nations whose resource wealth turned to a curse.

Ghana’s early effort at addressing some of the challenges through legislations such as the Petroleum Revenue Management Act, 2011 (Act 815) and the Petroleum Commission Act, 2011 (Act 821) is admired by personalities including Dr John Kwakye, a Senior Economist at the IEA.

Even so, Dr Kwakye has observed that some key challenges remain and these include transparency.  Chairing Wednesday’s discussions, Dr Kwakye noted that it was crucial to ensure open and accountable management of the sector to catalyse effective management of expectations.

He therefore discouraged opacity and drew attention to the need to particularly ensure contract and revenue transparency.
This article was originally published in the December 21, 2012 edition of the Public Agenda in a "Special Focus on Petroleum Revenue Management."