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

How to Safeguard Your Mobile Privacy

As the digital world becomes more mobile, so too do concerns about eroding privacy and increased hacking More

'Desert Dancer' Chronicles Iranian Underground Dance Troupe

Film by Richard Raymond is based on true story of Afshin Ghaffarian and his friends More

Researcher: Obesity Poses Complex Problem

Professor at Symposium on Obesity, Diabetes and Metabolic Syndrome says problem involves more than calorie intake, warns of worldwide health impact 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.
Scientists Say Plankton More Important Than Previously Thoughti
X
George Putic
May 26, 2015 9:26 PM
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 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 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 US-led Coalition Gives Some Weapons to Iraqi Troops

In a video released Tuesday from the Iraqi Ministry of Defense, Iraqi forces and U.S.-led coalition troops survey a cache of weapons supplied to help Iraq liberate Mosul from Islamic State group. According to a statement provided with the video, the ministry and the U.S.-led coaltion troops have started ''supplying the 16th army division with medium and light weapons in preparation to liberate Mosul and nearby areas from Da'esh (Arabic acronym for Islamic State group).''
Video

Video Amnesty International: 'Overwhelming Evidence' of War Crimes in Ukraine

Human rights group Amnesty International says there is overwhelming evidence of ongoing war crimes in Ukraine, despite a tentative cease-fire with pro-Russian rebels. Researchers interviewed more than 30 prisoners from both sides of the conflict and all but one said they were tortured. Henry Ridgwell reports for VOA from London.
Video

Video Washington Parade Honors Those Killed Serving in US Military

Every year, on the last Monday in the month of May, millions of Americans honor the memories of those killed while serving in the armed forces. Memorial Day is a tradition that dates back to the 19th Century. While many people celebrate the federal holiday with a barbecue and a day off from work, for those who’ve served in the military, it’s a special day to remember those who made the ultimate sacrifice. Arash Arabasadi reports for VOA from Washington.
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.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.
Video

Video On Film: How Dance Defies Iran's Political Oppression

'Desert Dancer' by filmmaker Richard Raymond is based on the true story of a group of young Iranians, who form an underground dance troupe in the Islamic Republic of Iran. This is the latest in a genre of films that focus on dance as a form of freedom of expression against political oppression and social injustice. VOA’s Penelope Poulou has more.
Video

Video Turkey's Ruling Party Trying to Lure Voters in Opposition Stronghold

Turkey’s AK (Justice and Development) Party is seeking a fourth successive general election victory, with the goal of securing two-thirds of the seats in Parliament to rewrite the constitution and change the country's parliamentary system into a presidential one. To achieve that, the party will need to win seats in opposition strongholds like the western city of Izmir. Dorian Jones reports.
Video

Video Millions Flock to Ethiopia Polls

Millions of Ethiopians cast their votes Sunday in the first national election since the 2012 death of longtime leader Meles Zenawi. Mr. Meles' party, the Ethiopian People's Revolutionary Democratic Front, is almost certain of victory again. VOA's Anita Powell reports from Addis Ababa.

VOA Blogs