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
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

Turbulent Transition Imperils Tunisia’s Arab Spring Gains

Critics say new anti-terrorism laws worsen Tunisia's situation while others put faith in country’s vibrant civil organizations, women’s movement More

Burundi’s Political Crisis May Become Humanitarian One

United Nations aid agencies issue warning as deadly violence sends tens of thousands fleeing More

Yemenis Adjust to Life Under Houthi Rule

Locals want warring parties to strike deal to stop bloodletting before deciding how country is governed 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.
Texas Town Residents Told to 'Just Leave' Ahead of Flood Threati
X
Greg Flakus
May 29, 2015 11:24 PM
Water from heavy rain in eastern and central Texas is now swelling rivers that flow into the Gulf of Mexico, threatening towns along their banks. VOA’s Greg Flakus visited the town of Wharton, southwest of Houston, where the Colorado River is close to cresting.
Video

Video Texas Town Residents Told to 'Just Leave' Ahead of Flood Threat

Water from heavy rain in eastern and central Texas is now swelling rivers that flow into the Gulf of Mexico, threatening towns along their banks. VOA’s Greg Flakus visited the town of Wharton, southwest of Houston, where the Colorado River is close to cresting.
Video

Video New York's One World Trade Center Observatory Opens to Public

From New Jersey to Long Island, from Northern suburbs to the Atlantic Ocean, with all of New York City in-between.  That view became available to the public Friday as the One World Trade Center Observatory opened in New York -- atop the replacement for the buildings destroyed in the September 11, 2001, attacks.  VOA’s Bernard Shusman reports.
Video

Video Seoul Sponsors Korean Unification Fair

With inter-Korean relations deteriorating over the North’s nuclear program, past military provocations and human rights abuses, many Koreans still hold out hope for eventual peaceful re-unification. VOA’s Brian Padden visited a “unification fair” held this week in Seoul, where border communities promoted the benefits of increased cooperation.
Video

Video Purple Door Coffeeshop: Changing Lives One Cup at a Time

For a quarter of his life, Kevin Persons lived on the street. Today, he is working behind the counter of an espresso bar, serving coffee and working to transition off the streets and into a home. Paul Vargas reports for VOA.
Video

Video Modular Robot Getting Closer to Reality

A robot being developed at Carnegie Mellon University has evolved into a multi-legged modular mechanical snake, able to move over rugged surfaces and explore the surroundings. Scientists say such machines could someday help in search and rescue operations. VOA’s George Putic reports.
Video

Video Shanghai Hosts Big Consumer Electronics Show

Electronic gadgets are a huge success in China, judging by the first Asian Consumer Electronics Show, held this week in Shanghai. Over the course of two days, more than 20,000 visitors watched, tested and played with useful and some less-useful electronic devices exhibited by about 200 manufacturers. VOA’s George Putic has more.
Video

Video Forced to Return Home, Afghan Refugees Face Increased Hardship

Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Britain Makes Controversial Move to Crack Down on Extremism

Britain is moving to tighten controls on extremist rhetoric, even when it does not incite violence or hatred -- a move that some are concerned might unduly restrict basic freedoms. It is an issue many countries are grappling with as extremist groups gain power in the Middle East, fueled in part by donations and fighters from the West. VOA’s Al Pessin reports from London.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video Al-Shabab Recruitment Drive Still on In Kenya

The al-Shabab militants that have long battled for control of Somalia also have recruited thousands of young people in Kenya, leaving many families disconsolate. Mohammed Yusuf recently visited the Kenyan town of Isiolo, and met with relatives of those recruited, as well as a many who have helped with the recruiting.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.

VOA Blogs