The Civil Society Platform on Oil and Gas (CSPOG) is threatening legal action against the National Democratic Congress (NDC) government if it fails to take steps to avert what it terms potential violation of the Petroleum Revenue Management Law (Act 815, 2011) as amended.
The opposition New Patriotic Party (NPP) released a bombshell last week that the Mahama-led NDC government is mortgaging Ghana’s gas resources as part of a deal to get the $2 billion loan from China.
The government is currently pursuing the China Development Bank (CDB) to re-activate the remaining $2 billion of the $3 billion loan which the Chinese discontinued after disbursing $1 billion to Ghana.
As part of the process, the Mahama-led government is spending about $6 million on consultancy alone to chase the loan.
However, the coalition, in statement released yesterday and signed by its Chairman Dr. Steve Manteaw, insisted that the “collateralisation of gas revenues is inconsistent with the law.
It has vowed to pursue the matter to its logical conclusion.
“It was intriguing much as it was disturbing to hear the revelations made by Mr Boakye Agyarko, Policy Adviser to the NPP flagbearer, Nana Akufo Addo, to the effect that the government intends to encumber the country’s gas resources for a period of 19 years through a loan agreement with the Chinese,” the statement said.
“The initial reaction of the CSPOG to the allegation was to treat it as a mere party propaganda, characteristic of an elections season. However, the rather conflicting responses from the Deputy Minister of Power, Hon. John Jinapor, who denied everything said by Mr. Boakye Agyarko, and the Finance Minister, Hon. Seth Terkper, who admitted almost every bit of the revelations, may not have done any good to the integrity of government.”
The statement said, “The matter even gets murkier with a press statement issued by the Head of Communications at the Power Ministry, Mr Edward Bawa last Friday which sought to justify the government’s intended action.”
“Mr. Bawa in his statement had assured Ghanaians that there is no basis for the assertion that Ghana’s gas would be exported for $2 billion and that all of Ghana’s gas are being used and would continue to be used in Ghana for power generation. He advised against confusing ‘the use of proceeds or revenues from the sale of gas or its derivatives to support financing arrangements with the actual sale of lean natural gas and liquids, the coalition said.
According to the coalition, “Ghanaians simply cannot disregard the reports as we are being asked to do because if we are to take as facts, the explanations provided by the Finance Minister in a Citi FM interview last Thursday and which technically is not at variance with Mr Bawa’s statement, then there will be enough reason to be concerned about the development.”
The statement said “while we require further details to be able to do a thorough analysis, our initial review of these two explanations of government’s position vis-vis the law leads us to conclude that the intended action of government amounts to a potential violation of the Petroleum Revenue Management Act of 2011, Act 815 (as amended).”
They said that Section 2 of the Act, which establishes the Ghana Petroleum Funds, “requires all revenues realised from petroleum activities to be deposited into the Ghana Petroleum Holding Fund (we don’t have the liberty to do otherwise) and to be managed by the Bank of Ghana. Transfers from the Fund, for the purposes of whatever expenditure, are supposed to be in accordance with the Act.”
The coalition said Section 5 of the Act, which deals with prohibited uses of the Petroleum Holding Fund, proceeds to categorically provide under Clause (1) how the funds should be handled.
What this means is that it doesn’t matter whether it is the resource itself or the revenues derived from it, the law prohibits any form of its encumbrance.
“While we are happy to grant the government the benefit of doubt, and to assume that they are acting oblivious of the referenced legal provisions, we will not hesitate to seek judicial intervention in the public’s interest, if regardless of this caution, it continues to do what we are being told it has initiated.”