Ghana risks being sanctioned by the International Secretariat of the Extractive Industries Transparency Initiative (EITI) if the nation fails to address certain challenges that have been identified by the global institution.
The challenges has to do with license registration in the extractive industry, state participation in the sector, and issues relating to production and export data.
Others include data on in-kind revenues, comprehensiveness, state-owned enterprise transactions, and state-owned quasi-fiscal expenditures.
This was disclosed by the Co-chair of the Ghana Extractive Industries Transparency Initiative (GHEITI), Dr Steve Manteaw, when he met stakeholders to discuss the 2017 validation report which was carried out by the EITI.
He said the sanction, which will be in the form of suspension from the EITI will be imposed on the country should it fail to address the challenges by March 2018, when the EITI is expected to carry out its next validation of the country’s extractive industry.
“Should this happen, it will be a huge embarrassment to the country and send the wrong impression to the international investment community,” he stated.
Issues raised in report
In accordance with EITI requirements, Ghana must disclose production data for the fiscal year covered by the EITI report, including total production volumes and the value of production by commodity and, when relevant, by state.
The country is also expected to disclose export data for the fiscal year covered by the EITI report, including total export volumes and the value of exports by commodity and, when relevant, by state.
The NSC is also required under the EITI requirements to agree which payments and revenues are material and therefore must be disclosed, including appropriate materiality definitions and thresholds.
Governments, including state-owned enterprises, are also required to disclose the volumes sold and revenues received. The published data must be disaggregated by individual buying company and to levels commensurate with the reporting of other payments and revenue streams.
Overall, the country’s performance was considered as a ‘meaningful progress’ by the EITI.
The Chief Director of the Ministry of Finance, Mr Patrick Nomo, going through the entire report, however, felt the country’s performance should have been a ‘satisfactory progress’ instead of ‘meaningful progress’.
“Going through the report, I realised that we made ‘satisfactory progress’ on most of the requirements with a few ‘meaningful progress’ so I believed our overall performance should have been ‘satisfactory progress,’” he stated.
“All the same it is an impressive recognition for our efforts, and as has been said, we are doing this not for awards or recognition but because we believe it is the right thing to do as a country,” he added.
He therefore urged the stakeholders to strive to improve the areas where the country did not do well.
The international secretariat of the EITI has therefore recommended that the NSC should develop a realistic timeline for finalising the GHEITI Bill.
Dr Steve Manteaw told the media after the meeting that the Ministry of Finance had engaged a consultant who was working on final draft bill before presenting it to Cabinet.
“EITI is so far based on voluntarism so anybody who is interested in implementing the EITI is not under any obligation to provide data and to disclose its activities,” he stated.
“The EITI Bill, therefore, seeks to make this mandatory so it’s a way of ensuring sustainability of the transparency pursuit of EITI,” he added.
He said this formed part of efforts to resolve the issues raised by the EITI during its validation.
Ghana committed to implementing the EITI in 2003 and formed its first multi-stakeholder group, the National Steering Committee (NSC), in 2005.
The country was accepted as an EITI candidate in 2007 and was designated EITI compliant in 2010, making Ghana the second country in Africa to achieve this status.
The country was also the first of any country to cover the mining sector in EITI reporting, and in 2009 expanded coverage to include oil.
The validation process is a mechanism by the EITI to undertake an independent assessment of how a country is implementing the EITI process to determine whether it is being implemented according to the agreed principles and standards.’