Parliament amends Clause 5 to collateralize Ghana’s oil

Parliament has amended the Clause 5 of the Petroleum Management Bill to allow Ghana to collateralize the country’s oil revenue.

Information reaching from the floor of Parliament says the amendment was done today Thursday December 9, 2010.

Clause 5 as approved by Cabinet and presented to Parliament reads:

5(1) The assets of the petroleum account shall not be used;

(a) to provide credit to the government, public enterprises, private sector entities or any other person or entity, and

(b) as collateral for debts, guarantees, commitments or other liabilities of any other entity.

5(2) In order to preserve revenue streams from petroleum and ensure the object of this Act, there shall not be any borrowing against the petroleum reserves.

But after a debate an observer described as partisan parliament amended the Clause. There 97 who voted in favour, 87 were against and one abstention.

By this decision therefore, Ghana’s oil, which commercial production is due on December 15, 2010 can be used as collateral for loans.

The debate to use the country’s oil as collateral for loans was started by the Vice President John Dramani Mahama, the minority however has opposed the idea.

By Emmanuel K. Dogbevi

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