Government has given the assurance that revenue from oil and gas exploration would be used to address challenges of poverty in Ghana through expenditures in priority areas of education, health, rural development, infrastructure, water and sanitation.
Delivering his State of the Nation address in Parliament on Thursday, President John Evans Atta Mills said other priorities will include investment in physical and social infrastructure within communities close to the oil and gas production activities, investment in a Future Generation Fund to ensure sustained well being into the long-term and investment in technical training, scientific research and development.
“The government has directed the Ghana National Petroleum Corporation (GNPC) to exercise its option to acquire a unitised paid interest of 3.75 per cent in the Jubilee field venture. The value of this share is $161 million. In addition to establishing a regulatory framework for managing revenues for the benefit of Ghanaians, GNPC will also focus on expense management for the Jubilee project to ensure that development costs are fair and reasonable" He said.
President Mills added that GNPC should enforce local content policy where Ghanaians would be able to participate significantly in oilfield support services towards the development of the Jubilee field and other new prospects.
"Further intensification of exploration in the years ahead will be achieved by GNPC continuing the active promotion of investment in the capital-intensive petroleum sector. In addition to the Tano-Cape Three Points basin where recent discoveries have been made in deepwater areas, other sedimentary basins that GNPC will be encouraged to promote will include the onshore Voltarian basin which covers a large part of Ghana's surface area but where very little exploration has been undertaken to date" He said.
President Mills said government would review and get a full account of the utilization of the TOR Debt Recovery Fund which had accumulated GHC720 million or 7.2 trillion cedis as at December 31, 2008.
"The TOR has a mountain of debt which currently stands at GHC1146 million or 11.46 trillion old cedis. The current debt profile at TOR compares with a total debt of GHC318.6 million or 3.18 trillion cedis as at December 31, 2000. The current debt is due to unpaid debts on TOR's books, interests accumulated on the old debt and subsequent losses as a result of under-recovery from the ex-refinery pricing. The VRA also has a mountain of debt total debt exceeding 800 million dollars,” he said.
President Mills advised the Ministry of Energy to work with the Ministry of Finance to develop and implement comprehensive remedial measures, especially re-capitalization, that would ensure the long-term financial viability of the power utilities.
"There should be Power Sector Financial Restructuring and Recovery Study that is necessary to inform Government of Ghana budgetary decisions on re-capitalization of the two power utilities plus the NED as well developing a Comprehensive Financial Recovery Plan for the three power utilities", he said.
The President assured that the country's electricity capacity generation would be increased from its current 1800MW to 5000MW within the medium term.
"The policy outlook for the electricity sector involves the generation of electric power which shall be fully open to private and public investors as Independent Power Producers. The anticipated increase in generation will enable cost-effective supply to meet the nation's requirements including that of Volta Aluminium Company (VALCO). There would be Regional co-operation and integration in electricity supply as is being developed within the West Africa Power Pool (WAPP)" He said.
The President said the measures would ensure the lowering of the cost of producing electricity in Ghana and electricity tariffs that consumers pay.