Ghana is set to begin oil and gas production at a new off-shore field. Officials expect the increase in output to bring the country as much as $1 billion a year. Lawmakers want to ensure that those profits are spent responsibly.
Ghana's offshore Jubilee Field is set to begin producing oil and natural gas next year that could earn the country as much as 20 billion dollars over the next 20 years.
But the new government need look no farther than neighboring Nigeria to see how quickly squandered oil wealth can bring resentment, violence, and environmental destruction.
So lawmakers in Ghana want to make sure they have a plan in place for spending that oil revenue responsibly before the money starts coming in.
Parliamentarian Catherine Afeku says expectations are high in Ghana and the benefits to come must be shared by those who live in oil producing areas. "For the longest [time] we have not had this kind of resource, and everybody associates the black gold with real social infrastructure. Coming from the Nzema area where the oil is there must be a bill, a law promoting the use of local content in some of the real jobs that the people of the area would be able to use," she said.
Abdulai Daramani is the environmental program officer for the Accra-based advocacy group Third World Network-Africa. While expectations are high, he says the risk that Ghanaians will be disappointed is just as high unless there is a proper legal framework to disclose how much money is being made and where it is going. "I am not too sure the level of impact that the oil will make if we don't have safeguards against waste, safeguards against corporate exploitation and safeguards against abuse of power and political discretions. So for us to be able to meet those high hopes we need to manage the oil revenue effectively, and that requires the need for us to put in place concrete terms and conditions that optimize the oil revenue for us," he said.
Lawmaker James Afedzi is Chairman of the Parliamentary Finance Committee. He says President John Atta-Mills' government is drafting legislation to regulate oil revenue and will soon present its recommendations to legislators. "We are waiting for the legislation to come from the executive to the House, and then we will look at the options that are available to the government. Then we will take a decision. But my expectation is that the revenue that will be generating from that find must be used in a way that will benefit everybody," he said.
A study by the aid agency Oxfam America and Ghana's Integrated Social Development Center says the transparent management of oil funds not only improves public spending but gives the public greater confidence that their money is being spent wisely.
Parliamentarian Afeku wants the new law to include mandatory investments in job training and education. "We should be able to create a fund that is transparent so it would actually promote education in those sectors - our engineers, pipeline designers - people who would be directly involved in the industry from Ghana, so that they would take on when we are gone. We are still a developing nation I would rather see it used in developing the infrastructure of the nation. So children can actually go to better schools equipped with IT to prepare them for the industry," she said.
The next test for Ghana's government is overseeing the sale of Kosmos Energy's stake in the Jubilee Field - a stake that is worth more than three billion dollars. Exxon-Mobil, British Petroleum, and China's National Offshore Oil Company are all bidding for that stake.
Industry analysts say Ghana's government hopes to find the financing to acquire the Kosmos stake itself, then sell it off to the highest bidder and reinvest the profits in the National Petroleum Corporation, which already holds 13 percent of the Jubilee Field.