News / Africa

Oxfam: Ghana's New Oil Law Leaves Room for Financial Mistakes

An oil rig for oil exploration is pictured at the Port of Takoradi, Ghana, December 4, 2008 (file photo)
An oil rig for oil exploration is pictured at the Port of Takoradi, Ghana, December 4, 2008 (file photo)

Multimedia

Audio
TEXT SIZE - +
Drew Hinshaw

Oxfam says Ghana's new oil law will not protect it from making the same financial mistakes as established oil producers such as Angola and Nigeria.

The Petrol Revenue Management Bill that Ghana's parliament ratified on March 2 is to regulate how the country spends and saves the $1 billion in oil money it expects to reap this year alone, an amount that is equal to two-thirds of the government's total anti-poverty spending.

The new law will require Ghana's government to publish a breakdown of all the oil-related money it receives and where it goes.  It establishes watchdog groups to keep an eye on the oil money.

But policy group Oxfam International says those rules alone are not enough to prevent this region's newest oil exporter from repeating the mistakes of its oldest oil giants.

Nigeria, Angola, Cameroon, Equatorial-Guinea, Republic of Congo, and Gabon - all west and central African states - have been pumping hundreds of millions of dollars worth of oil a day for decades. But that oil windfall has typically failed to bring even mundane improvements in the lives of people in those states, the majority of whom live on less than $1.25 a day.

Ghana could suffer a similar future, Oxfam Policy Manager Ian Gary says, if the country does what its neighbors did and uses oil revenue as collateral for government loans.

Unfortunately, he said, the final law stripped a provision that would have prevented Ghana from doing just that - taking on risky debt with the false sense of security that petrol profits will one day pick up the tab.

"In many cases such as Angola, Congo-Brazzaville, and others, the condition under which they took oil-backed loans were very opaque," said Gary.  "The terms were not known to the public and the interest rates were really high.  So without any public discussion, the officials were basically mortgaging the future at very bad terms."

Ghana, he said, may be already inching towards that fate.

The state has taken out a staggering $750 million loan in the form the eurobond in 2008.  Ghana's state-owned National Petroleum Company is also looking to borrow $500 million in start-up cash - a loan Gary fears, will be backed with the promise that some future oil windfall will pay off the loan if the company can't.

"There's concern that before Ghana even starts to really produce significant quantities of oil that it will have mortgaged a lot of that money," added Gary.

There are other, more intransigent concerns, too, he says for this country that may be an example against corruption within its region, but is still ranked 62nd in Transparency International's rankings of how 178 countries fare against corruption.

A series of 2009 investigations on how the country's nascent petrol proceeds were being spent found "leakage," Gary said, between the oil wells and the schools and clinics they were meant to fund.

"It's a question of how quickly Ghana can build its capacity to not just spend money, but spend money wisely," explained Gary.

In his state of the nation speech this year, Ghana's President John Atta Mills said his government will account for 100 percent of the country's petrol proceeds.

You May Like

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

John the XXIII and John Paul II will be made saints in a ceremony at St. Peter’s Square on April 27 More

Thailand Reacts to Plots Targeting Israelis

Authorities hope arrest of two Lebanese suspects will disrupt plot to attack young Israeli tourists More

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

'Once Upon a Forest' takes viewers deep into heart of tropical rainforest More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pope Francis Hopes Dual Canonizations Will Reconcile Churchi
|| 0:00:00
...
 
🔇
X
Jerome Socolovsky
April 22, 2014 4:14 PM
On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Robotic Mission Kicks Up Lunar Dust

A robotic mission to the moon was deliberately crashed onto the lunar surface late last week, but not before scientists had collected data gathered by the spacecraft which was designed to self-destruct. VOA's Rosanne Skirble reports on the preliminary findings of the craft, called LADEE - an acronym for Lunar Atmosphere and Dust Environment Explorer.
Video

Video Boko Haram Claims Responsibility for Bombing in Nigerian Capital

The Nigerian militant group known as Boko Haram has claimed responsibility for a bombing in the capital on April 14th that killed 75 people. In the video message, Abubakar Shekau, the man who says he ordered the bombing, says nothing about the mass abduction of more than 100 teenage girls, most of whom are still missing. Heather Murdock has more for VOA from Abuja.
Video

Video Ukraine Developments Hang Over Obama Trip to Asia

President Barack Obama's trip to Asia this week comes as concerns over Beijing's territorial ambitions are growing in the region. Those concerns have been compounded by Russia's recent actions in Ukraine and the possibility that Chinese strategists might be looking to Crimea as a model for its territorial disputes with its neighbors. VOA's Bill Ide has more from Beijing.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid