Oil revenue less than 5% of Ghana's GDP – Energy Minister

Ghana’s total revenue from the oil and gas find will represent less than five per cent of the country’s Gross Domestic Product (GDP), according to the Energy Minister, Dr Joe Oteng-Adjei.

With the country’s current GDP at well over $18 billion, Dr Oteng-Adjei said the total revenue to the government and the Ghana National Petroleum Corporation (GNPC) in respect of royalties, income tax and interest payment on oil and gas exploration would be $1 billion per annum, at an average crude oil price of $60 per barrel.

He, therefore, admonished Ghanaians to be cautious in their high expectations of the extent to which the oil and gas find would help resolve the economic challenges of the country.

Speaking at a workshop on ‘Good Governance and the Emerging Oil and Gas Industry’ for selected journalists reporting from Parliament, the minister captured the scenario thus, “If we are to share the revenue to the 23 million Ghanaians, each of us will receive about 12 cents per day (l7Gp per day)” and wondered whether that could be the panacea for the economic problems of the country.

He said it was his expectation that the revenue from the industry would be prudently managed and utilised and, therefore, called on civil society organisations and the media to properly perform their watchdog roles to ensure that all Ghanaians benefited from the oil and gas revenue.

Dr Oteng-Adjei added that a draft bill to effectively manage the oil and gas revenue was ready and that the Ministry of Finance and Economic Planning would soon embark on road shows to solicit the input of Ghanaians and other players in the industry.

He stated that in addition, the Petroleum Exploration and Production Law was being reviewed to make the process of getting exploration and production licences less complicated in order to sustain the high level of interest in the country’s petroleum industry.

The minister said the GNPC was being strengthened to play a more active role in the exploration for and production of oil and gas and explained that the government’s aim was to make the GNPC a self-sufficient player in the oil and gas industry that would have the financial and technical capacity to explore and produce oil on its own.

He disclosed that since the country’s petroleum industry was relatively young and small, the government’s intended amendment of petroleum legislation was aimed at creating a Petroleum Regulatory Agency (PRA) to oversee the industry’s operations.

Dr Oteng-Adjei said that had been decided with the understanding that as the industry grew and there were enough technically qualified personnel to warrant two separate regulatory institutions for upstream and downstream businesses, the arrangement could change.

The Energy Minister said the main challenges that might face the country when production started in the fourth quarter of this year were the issues of regulation, accurate tax assessment and collection, the management of oil revenue and the continued increase in local goods and services in petroleum operations.

He said aware of those challenges, the government was working hard to recruit and train professional and other technical staff for the PRA and other relevant institutions, adding that the Ministry of Finance and Economic Planning and the Internal Revenue Service (IRS) were being strengthened to deal with the matter.

For his part, the Commissioner of the Commission on Human Rights and Administrative Justice (CHRAJ), Mr Emile Short, noted that the oil industry was a fertile ground for corruption because of the huge amount of money that was involved, noting that the role of the media was very crucial to ensure that the revenue that would accrue from it benefited Ghanaians.

He called for a corps of journalists who would specialize in the oil and gas industry to enable them write and discuss issues bordering on the industry with clarity.

He also called for the early passage of the Right to Information Bill to enable the media to demand information on the industry to facilitate their work.

Mr Short added that CHRAJ was to establish a separate unit that would deal solely with issues concerning the oil and gas industry.

He said it would also submit a memorandum to the Constitutional Review Commission to split CHRAJ into two, with one dealing with human rights and corruption issues, while the ‘Other dealt with issues concerning administrative justice’.

The Member of Parliament for Jomoro, Ms Samia Nkrumah, called for measures that would ensure the safety of communities that were near the place where the oil would be extracted.

She suggested to the government to hurry up with the enactment of laws that would guide the oil industry to ensure that Ghanaians benefited from the industry.

Source: Daily Graphic

Leave A Reply

Your email address will not be published.