The Civil Society Platform on Oil and Gas has pledged support for a Heritage Fund, as proposed in the Petroleum Revenue Management Bill before Parliament, saying its deletion would be a subversion of the peoples’ will.
It said the rationale, was not just to put money away for future generations but more importantly to control spending, and help the country avoid the temptation of going on a spending spree, ending up eventually with poorly executed projects.
The pledge was contained in a statement issued in Accra on Tuesday.
“It is apparent from public discourses on the matter that, we do not as a country seem to have a sound Public Financial Management Systems. If we had, there will be confidence in the system such that in whichever way we decided, we will be sure to get beneficial results for the present generation as well as the future generation.”
“It is precisely because of our weak public financial management systems that Ghana needs to spend according to her absorptive capacity to ensure that we spend efficiently and deliver quality goods and service to all Ghanaians. Oil funds present us with the opportunity to ensure that we move away from a boom and bust economy and build a long term future of prosperity not just for us but for our children’s children”, it added.
The statement said though Ghana had a huge infrastructural deficit, that should not be an excuse to abolish the Future Heritage Fund -it was prudent to bequeath future generation not only good infrastructure but also “investible” capital funds.
“To do this will require that we invest heavily in infrastructure and other social needs so that the current generation will be able to make progress on their efforts to build a solid economy for future generation, but certainly, something must be put aside for investment against the future. It is this mix of how much to spend now and how much to save that we believe must engage the attention of our law makers”, it said.
The statement said oil should not replace the country’s traditional sources of financing development, especially taxation, because taxes would strengthen the social contract regime and embolden citizens to demand accountability from the duty bearers.
It expressed concern about the desire of the Government to begin to affect the lives of Ghanaians with the oil revenue before they begin to flow, and hesitant to support oil-backed loans because the industry was full of uncertainties.
“Accidents can happen, prices are subject to fluctuations, production level can either decline against projections, or surge; and all of these render any oil-backed loan or forward sales a risky enterprise. Again, while cocoa-backed loans can be acceptable, oil-backed loans is a dangerous ground to tread”, it said.
The statement contended that while cocoa was renewable and could afford to gamble with, oil was non-renewable and must not be gambled with adding, “Our oil, discovered at a time of increased global demand for the commodity, and when global oil supplies are peaking and many sources declining, is undoubtedly a national strategic asset, which cannot be used as collateral, the same way that will not mortgage Akosombo Dam for any loan.”
“We must remember that, loans always come at a cost, and many a time with conditions that favour the lender rather than the borrower. The argument in support of collateralising Ghana’s oil which rests heavily on the country’s infrastructural deficit seems to presume that we are able, given the resources, to build railways from Accra to Tamale or construct roads across the length and breadth of the country, linking all villages and hamlets in a year.”
“We note that at peak production, Ghana stands to rake in about a billion dollars a year. Certainly, there is no way we are going to be able to spend 90 per cent of that a year, unless we want to turn Ghana into a huge construction site for decades to come”, it concluded.