The abundance of oil resources in commercial quantities in Ghana, coupled with weak institutions in the management of the resources, will ultimately destroy the country’s economy, Larry Diamond an American professor and governance expert had said.
Diamond said oil exposed a country’s weak institutions and “teased and tempted” a country’s leaders to become “massively corrupt.”
Diamond said the most effective way to ensure Ghanaians benefitted from its oil find was “radical transparency” in the sector and called for the oil sector to be “insulated” from politicians, and institution of stronger auditing and monitoring structures.
Ghana began commercial production of oil three years ago. Government has said revenue from oil would be focused on expenditure and amortization of loans for oil and gas infrastructure, roads and infrastructure, agriculture modernization and capacity building.
To regulate the industry and ensure greater transparency, Ghana’s parliament has passed the Petroleum Revenue Management Act, Petroleum Commission Act, Petroleum Exploration and Production Law, Petroleum Income Tax Law, National Petroleum Authority Act among several others.
Others in the offing include the Local Content and Local Participation Policy Framework, the Right to Information Bill, the Marine Pollution Bill and the Ghana Extractive Industries Transparency Initiative (EITI) Framework.
Meanwhile, the World Bank Board of Executive Directors has approved additional financing of US$19.80 million to support the development of Ghana’s energy sector and to help improve public management and regulatory capacity and enhance sector transparency by strengthening the institutions managing and monitoring the sector; and second, support the development of indigenous technical and professional skills needed by the petroleum sector through support to selected educational institutions.
The funds will help to establish a national data center within the Petroleum Commission of Ghana (PCG), an independent regulator for the oil and gas sector and also help procure laboratory equipment for Ghana’s Environmental Protection Agency (EPA) to strengthen them to monitor and analyze the impacts of oil and gas operations on marine and shoreline ecosystems. This Project’s focus on building strong regulatory institutions will indirectly benefit all Ghanaians by increasing the Governments capacity to manage the resources effectively and transparently.
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