GHANA’S OIL MONEY; WHERE GOETH THOU?

'A hungry man, they say is an angry man'- a popular saying that I have heard over and over in this my very young life.

But why won't a hungry man be an angry man? I had been trying so hard to understand this saying until recently. On Tuesday, 25th June, 2013, I was sitting in a 'Chop bar'- a place where people eat- relaxing after taking in some hot afternoon Fufu- a meal prepared from cassava- when there was a news story on metro TV about the meeting between the Public Interest and Accountability Committee (PIAC) and some CSOs on the management of revenue from the Oil and Gas Sector of Ghana. Immediately the story came up, one middle-aged man who was also eating in the Chop Bar angrily queried 'but do we even get any revenue from the Oil?' I initially pretended not to have heard him. But then I thought about his question so deep that I could no longer keep mute, so I humbly turned to him and said 'yes, I think we get'. He quickly asked me how? 'How, and what shows we get revenue from the oil? Can they show us any tangible thing that will tell everybody that this is what the oil revenue has brought us?' he asked. I then breathed in and breathed out heavily, and started to ponder seriously about his questions.

At that very moment, Metro TV begun an interview with the Chairman of the PIAC, Major Daniel Ablorh-Quarcoo, who said they have been able to do what the act that established them mandated them to do. 'We have been able to ensure that the oil revenue is managed properly. That is what our mandate is' he told the Metro TV reporter whose name I can only remember to be Samuel. Sitting in the Chop Bar, I quickly asked, as if I'm the one conducting the interview, what can you show for Ghanaians to see that this is what you have been able to do with the oil revenue? But I could only tell that to myself since the man on the TV screen and very far from where I sat in Agona Ahanta. The man's question started to make more sense to me now.

Last year, the PIAC, in its maiden annual report for 2011 on the Management of Petroleum Revenue, said the nation was able to rake in GH¢666 million from the commodity. This was out of a targeted oil revenue of GH¢1.250 billion for 2011. This represents a shortfall of GH¢583 million, which the Jubilee partners have attributed to the inability of the Jubilee field to produce the estimated 120 barrels of oil daily.

However, an amount of GH¢666 million can do a lot for this nation of 26 million or so people. So if for nothing at all, we should be shown something that they have been able to do with the money. After all is that not what the Public Interest and Accountability Committee was established to do; ensure accountability of how the oil revenues are used?

For me, if the 30-member committee, led by Major Daniel Ablorh-Quarcoo, will only come and tell Ghanaians that out of the total receipt, an amount of GH¢315.390 million, representing 47 percent was transferred to the Ghana National Petroleum Corporation while GH¢250.432 million went into budget spending, as was done with 2011 revenue, then they don't deserve our hard earned money being used to pay them, and that they should either be dissolved or be told to up their performance. Or is this what we call accountability? The tax payer deserves better an expenditure analysis than this one.

It was a good omen when in their 2011 report, the PIAC recommended that the GNPC release an interim report on what it used the 47 percent of the oil revenue it received for. But my question is; did they ensure that the GNPC did exactly as they recommended? It is one thing asking a Ghanaian to do something, and it is another thing making sure that he/she does what you asked him/her to do. And such a report if brought out shouldn't be kept with the committee, government or the perceived 'stakeholders' alone. They should find a way of making the grass roots understand what is going on. It should be ensured that the Information Service Department does a great job of making the grassroots get a fair understanding of whatever report that is released on the usage of the oil revenues. Most Ghanaians want to know what benefits the nation is deriving out of the oil find.

Taxes
When the oil find was announced to Ghanaians in 2007, almost all of us jumped into jubilation; knowing that at last we have also found a resource that will complement the ones we had already to help give a boost to our economy. On the radio stations each day people tried to explain how we will gain enormously from the find. One of the ways that the pundits were proposing was Tax. According to them, the companies who will be involved in the exploration of the oil will be paying Taxes which were expected to be huge sums of money. One could, then, just sit and calculate that ok, if ten companies are going to come, then we shall have more money from Taxes alone. It seemed to be a good market and a way to better our economy. But hearing from the PIAC that not all payments in terms of taxes expected from the oil industry were realized dealt a big blow to some of us who were of high hopes of raking in more money from this God-given resource.

According to the 2011 report of the PIAC the Ghana Revenue Authority is yet to receive any corporate tax revenue from operators yet to recoup their pre-production cost. Ghana's law permits the oil companies to recover 20 percent of what was invested, and according to the Jubilee partners they had invested a total amount of $4 billion which could be recouped over the next four to five years before they start paying corporate taxes. Left to me alone, the law should be revised to ensure that companies pay corporate tax within the shortest possible time of their establishment.

To Spend or to Invest the Oil Revenue
The International Monetary Fund (IMF) has predicted that Ghana can generate cumulative revenue of $20bi11ion from its oil and gas over a production period of 18 years (2012 to 2030). This amounts to $1.1 billion per annum. (The Ghanaian Times, March 1.6, 2009). However, total government expenditure for 2008 amounted to GHC8 billion (46.5% of GDP) up from GHC5.6 billion in 2007, i.e. GHC2.4 billion new government expenditures were made in 2008. This is more than the estimated 1.1 billion dollars per annum revenue that will accrue to the state from oil proceeds annually.

May I assume that, Ghana government can easily spend this new oil revenue without the population seeing any change in their lives? Our optimism for the near-term oil-rich Ghana may just be a mirage, if government's appetite for spending is not tamed.

Expectations
What most Ghanaians, including myself and my Cape Three Point missives, are expecting from this oil find is the improvement in our livelihoods; better social amenities, good schools for our children, an improved health delivery, access to constant supply of safe drinking water, better roads, access to electricity, and the provision of jobs, among other things. With well-managed oil revenue we can be able to provide all of these and fulfil the wish of many Ghanaians. The usage of the oil revenue by government should be open enough for almost every Ghanaian to understand. This is what the PAIC should do their best to ensure proper accountability with respect to the use of the oil revenue.

We, as a country should ensure that every Ghanaian knows what is happening to the revenues from our oil industry. It is only then that we can be able to tell where our oil money goeth!!