NGO urges government to delay spending of petroleum revenue

Government has been asked to delay spending of all petroleum revenues until institutions charged with public financial management are strengthened through the enactment of right laws and regulations.

The Civil Society Organisation (CSO) on Oil and Gas at a press conference in Accra on Wednesday said if such revenues were not managed sustainably, “generations to come would unfortunately have to live with the negative environmental, social and economic impacts that the sector brings in its wake, for many years”.

The first batch of oil production in Ghana is expected to be drilled by the last quarter of the year.

A communiqué read by Mr Mohammed Amin Adam, Coordinator of CSO on Oil and Gas, said the only way to ensure that Ghanaians were not short-changed in the negotiation of oil and gas contracts, the sharing and utilisation of oil and gas revenues among others, was to develop appropriate and adequate policies, laws and institutions through stakeholder participation.

The communiqué on “Citizens’ Summit” was issued at the end of a national CSO on Oil and Gas Summit held in Accra last week to collate views of all stakeholders that portrayed the voice of civil society on oil and gas issues from all the 10 regions.

The communiqué said government as a matter of urgency should develop medium and long-term development plans for the country through public consultations to ensure prudent and transparent management of petroleum revenues through budget processes.

It noted that any investment of petroleum funds should be directed to human capital development, agriculture and infrastructure, otherwise consideration should be given to limiting spending of revenues to capital spending.

It said the proposed Stabilisation Fund and Heritage Fund were appropriate but the percentage allocation of revenues to the Heritage Fund should be reduced from the proposed 70 per cent to ensure that more current investments were made in sectors that had long-term impact.

The communiqué proposed that sweeping discretionary powers given to the Minister of Finance and Economic Planning in taking investment decisions on the use of the block grants for socio-economic and environmental mitigation interventions and the declaration of confidential information was too much and should be limited.

The role of Public Oversight Committee (POC), the communiqué said, should be strengthened by ensuring its funding by law, committing it to public hearing, broadening its role beyond making recommendations and providing it with the power to refer cases of abuse to the judiciary.

It said membership of the POC should be increased from 11 and must be broad-based without representatives of political parties to make it independent.

The communiqué indicated that audit of the petroleum reserves accounts by the Auditor General could not be considered an external audit and that there should be independent third party annual audit.

It called for a mandatory local content programme for petroleum operations across the petroleum value chain which should consider the interest of Ghanaians and consistent with the long-term national development strategy.

It said whereas government’s target of achieving 90 per cent local participation by 2020 was laudable and very ambitious, reasonable time lines and implementation strategy must be provided for achieving various levels of local content and participation to avoid raising unrealistic expectations.

The communiqué noted that there should be a strong regulatory agency to enforce local content compliance and Ghanaians must be given preference in the issuance of licences where they had the financial and technical capacity.

It said any new licences subsequently issued should be done on a competitive and transparent basis and also in line with the previous commitment by President John Evans Atta Mills; all petroleum agreement must be published without further delay.
The communiqué recommended that there must be financial and technical support mechanisms to build the financial and technical capacity of Ghanaian businesses to participate in petroleum operations.

It said disbursement of the proposed financial support must be transparent and in line with guidelines approved by Parliament.

It called for a moratorium on petroleum licensing and production until the regulatory law was passed by Parliament and the petroleum regulatory authority became functional.

The communiqué said all applications for licensing must provide disaster mitigation plans which must be approved by the petroleum regulatory authority before any licenses were issued.

It said regulatory institutions should be strengthened and provided with the financial and technical capacity to ensure effective monitoring of petroleum activities.

The communiqué stressed that local people such as fishermen and chiefs should be involved in community response initiatives to prevent the occurrence of disaster and livelihoods disruptions.

It recognised that the discovery of oil in commercial quantities had raised the expectations of Ghanaians above what was possible to deliver, and that was a recipe for public and community upheavals.

The communiqué therefore, called for effective coordination of all efforts, national consensus around the critical decision areas and continued vigilance by Ghanaians on the sustainable management of petroleum resources to avoid the “resource management curse”.

Source: GNA

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