The Chairman of the Public Accounts Committee (PAC) of Parliament ,Mr Albert Kan Dapaah, has called for more vigilance on the part of civil society organizations and the media to safeguard revenue from the country’s natural resources.
He said accountability mechanisms in public sector financial management systems were flouted and disregarded, thereby creating substantial opportunities for political and public servants to steal state resources.
Speaking at the official opening of the 2012 Summer School on Governance on Oil ,Gas and Mining revenues in Accra yesterday ,Mr Kan Daapah ,who is also the Member of Parliament (MP) for Afigya Sekyere West ,noted that unless the country put an end to the disregard for key accountability mechanisms ,’’we will continue to swim in poverty, in spite of significant revenue from our natural resources “.
Organised by the Regional Executive Industries Knowledge Hub(REIK HUB) GIMPA ,in collaboration with Revenue Watch Institute (RWI) and the German International Co-operation(GIZ),the summer school is run as a two –week residential course which comprehensively covers fundamental and intermediate governance issues embedded in the extractive industry value chain.
Mr Kan Dapaah said the governance of the extractive industry was very important but also challenging because the industries, especially oil ,gas and minerals were associated with large investments ,secrecy and contest over resource rent.
He said the bad governance had serious implications, as resource rich countries did not benefit much form their resources because they got insignificant share of the rent ,invested poorly and were often affected by official abuse.
According to him, in most resource –rich countries, citizens were demanding of their government to collect large shares of resource rent to finance development.
He said the government initiated new fiscal reforms for the mining sector in the 2012 budget ,including an increase in corporate taxes from 25 per cent to 35 per cent ,the introduction of 10 per cent windfall tax and ring –fencing of costs.
He indicated that fiscal and contractual reforms were necessary but inadequate in addressing the development challenges of resource rich countries ,adding that what was important was that governments must continue to negotiate those terms in openness and in the spirit of partnerships to ensure that there was balance in the interest of all parties.
The MP expressed concern over the fact that while resources of countries had attracted international attention,the expectations of the citizens were hardly met dur to the lack of transparency on the size of the wealth ,how much revenue was generated from resource exploitation and how revenues were being utilized.
He said most importantly ,the promise of jobs in resource –rich countries had become elusive ,thereby inciting populations to rise against their governments and sometimes among themselves as oil and mineral growth had not translated into tangible jobs and income.
Mr Kan Dapaah said, for example, that on account of the oil sector, Ghana became the third largest recipient of foreign direct investment in the 2011, rising from seventh in 2010,according to the 2012 World Investment Report issued by the United Nations Conference on Trade and Development (UNCTAD).
According to the report, Ghana received $3.2 billion ,while Nigeria and South Africa obtained $8.92 billion and $5.8 billion, respectively.
He said in 2011,Ghana achieved a 14 per cent growth in the economy, one of the highest in the world, but the promised jobs were not forth coming.
In 2010,he said ,the Ministry of Energy promised that 10,000 jobs would be created in the oil and gas industry ,while the Ghana Oil and Gas Service Providers Association said 100,000 jobs could be created.
He said,however,that ,six years on since the discovery of oil, the Ministry of Energy had reported only 1,500 jobs created in the industry ,with 840 Ghanaians and 660expatriates.
In a speech read on his behalf ,the Minister of Energy ,Dr Joe Oteng –Agyei, said Ghana had signed on to the EITI for the purpose of strengthening transparency and accountability in relation to revenue payment s from operators within the extractive sector.
He said the initiative ,which was hitherto in the mining sector and that to consolidate the gains so far made in natural resource governance ,a draft EITI Bill was ready for submission to Parliament .
Dr Oteng –Agyei indicated that the purpose of the bill was to provide the legal framework and ultimately enhance transparency and accountability in relation to payments originating from the natural resources sector of the economy and receipts by government.