OIL • Ensure transparency in use of revenue - Forum

Front (lead) Feb 27/2008

Story: Charles Benoni Okine

SPEAKERS at the National Forum on Oil and Gas Development in the country have called on the government to ensure absolute transparency in the use of the revenue that will accrue from oil production in the country.
Such a step, they said, would prevent agitation that might jeopardise the security of the state.
As Ghana strove to make the oil find a blessing and not a curse, as was the case in some countries in Africa and elsewhere, there was also the need for the government to ensure that its policies and rules governing the revenue and expenditure from the find were institutionalised and not made the property of one political party in government, they stressed.
The speakers, who included the Speaker of Parliament, Mr Ebenezer Sekyi Hughes; the President of the National House of Chiefs, Odeneho Gyapong Ababio; the Chairman of the Ghana Arbitration Centre, Nana Dr S.K.B. Asante; the Chairman of the Azerbaijan Oil Fund, Mr Shahmar Movsumov, and an oil expert from Nigeria, Mr Bright Okogu, were sharing their thoughts and experiences regarding oil production and how best proceeds from it could be judiciously used to benefit present and future generations.
The two-day forum, attended by experts in many areas of oil exploration, was organised along four major themes: “Turning Oil and Gas Wealth into Sustainable and Equitable Development”, “Entrenching Transparency and Stakeholder Engagement”, “Effective Management of the Oil and Gas Sector” and “Safeguarding Security and the Environment”.
Experts say the forum is a major move in the oil exploration activities in Ghana which began in the late 1890s.
The speakers also advocated the setting up of savings and development funds into which money accruing from oil production would be saved for the future generation and the other used to undertake projects that would benefit the entire nation.
The speakers cited the lack of transparency and accountability in oil producing countries as one of the reasons for the “oil curse”, particularly in Africa.
Kosmos Energy struck new volumes of what has been described as high quality crude oil in the deep waters of the Western Region of Ghana at the weekend.
The find was made in Odum-1, the latest well to be drilled by the company, barely six months after it had moved from the Mahogany-1 Well in the last quarter of last year.
Mr Sekyi Hughes said the accountability of the proceeds was crucial if the country was to ensure equity and balance in the sharing of what would accrue from the find.
He called on civil society to play a watchdog role to ensure that nothing went wrong with the money to be derived from the oil.
“The blessings we aspire from the find should be in the form of good schools, hospitals, roads and telecommunications infrastructure in every community of the country,” Mr Sekyi Hughes stated.
He added that it behoved the government to ensure that all manner of corrupt practices that would spark trouble as far as the revenue and expenditure from the proceeds were concerned were seriously avoided.
Odeneho Ababio said chiefs in Ghana were delighted at the find and were open for discussions on how best the proceeds could benefit the entire nation.
He said the find should be able to bring jobs to the youth who had no jobs, adding that the setting up of a fund guided by clear institutionalised guidelines was also paramount to ensure the equitable and judicious use of whatever money the country was bound to get.
Nana Dr Asante, who chaired the first part of the discussions, said Ghana had come far and the oil was going to help to accelerate the pace of development in the country.
He noted that the clear message had been the issue of transparency and accountability as far as the proceeds from the find were concerned and expressed the hope that the advice would not be taken for granted.
Mr Movsumov, sharing the experience of his country, said the country bagged up to 80 per cent of the proceeds from the oil production.
He said the issue of transparency had been the hallmark of Azerbaijani’s success and peace as far as the management of the oil proceeds was concerned.
“What accrues is made public, even to the extent that we place it on our website for all to see. We also have institutionalised structures that determine where the money should go and all those are explored and followed to the letter,” he added.
Mr Movsumov said Azerbaijan was still in its development stages and, therefore, the money was put into projects that accelerated development.
For his part, Mr Okogu wondered why Ghanaians were worried about the find being a curse, saying, “If you do not have it, you can say it is a curse that God did not give you any. But this is not the case and, therefore, it should be seen as a blessing.”
He noted that Ghana was lucky to have had the opportunity to discuss how it could use the oil revenue and manage the proceeds when production started but warned that “oil could be a potential for conflicts, massive corruption, entrenched poverty and serious environmental degradation”.
Mr Okogu said Nigeria, even in the wake of high oil prices on the international market, was indebted to the tune of about $35 billion not too long ago.
“We have learnt from our mistakes and we have been able to pay off that debt with the oil proceeds. We are still in the process of ensuring that all the negatives associated with the oil in our country are ironed out and the results are beginning to show,” he added.
Another key issue he raised was the fact that the rules governing the use and management of the oil should be institutionalised and not made what he termed “the property of one political party in power”.
He also mentioned the need for a savings fund, just as was the case in Kuwait, to take care of future generations so that they would have a feel of the find even when it had been fully exhausted.
Sharing the Norwegian experience, the Mr Erik Solhiem, who is in charge of that country’s ministry of Environment and International Development said the proceeds should be carefully managed so that they did not derail the macro-economic stability.
He said no matter the number of funds that were set up, it was crucial to have one budget to ensure a centralised control which could also avoid misuse and corruption.
After all the speakers had focused on what should be done with the proceeds from the find, Osekese Ogyeahoho Yaw Gyebi II, the Paramount Chief of the Sefwi Anhwiaso Traditional Area, voiced out his concern and that of his people, saying, “When we talk about gold and other minerals, cocoa and other agricultural products, the Western Region comes tops. But what have we to show for them?”
“Not this time,” he warned, a comment that changed the faces of the panel, including the Norwegians, Nigerians and Azerbaijani.
“In spite of the massive exploration done which has deprived our people of their arable lands and other property, we have nothing to show for our sacrifices over the years,” he added.
He said the Western Region had the worst road network in the country, noting that it was only a pity that the region should be treated in that manner and reiterated that “this time anything that is promised us should be well documented so that we can hold somebody to it. If that is not done, we will not sit back and watch again”.