Fri, 26 Feb 2016 Business & Finance

Oil Sector Employs Negligible Population

By Daily Guide
A Ghanaian oil worker and his foreign counterpart at workA Ghanaian oil worker and his foreign counterpart at work

Government says close to 7,000 people have been employed in the country's upstream sector, comprising 5,590 Ghanaians and 1,350 expatriates despite the huge publicity that it made over the employment prospects in the country's oil and gas sector.

President John Mahama, who disclosed this in his last State-of-the-Nation address, said out of the 474 companies registered with the Petroleum Commission, 321 were indigenous companies while 46 were joint ventures.

Also, out of the total value of $6.3 billion contract awarded from 2010 to 2015, over $1 billion has gone to indigenous companies. Specifically, as at 3rd quarter of 2015, $201,072,000, representing 41 percent of a total of $792,623,000 million worth of investments in the year, was awarded to indigenous companies under Local Content policy.

“On the downstream, our vision is to make Ghana as a hub for petroleum distribution in the sub-region. Already BOST has begun supplying petroleum products to the landlocked countries of Burkina Faso, Niger and Mali from their Bolgatanga depot.”

He stated that the country had started witnessing increased inward investments into Ghana's oil and gas sector despite the current low price on the global market, adding that his administration intends to address the financial challenges that have affected the viability of State Owned Enterprises in the energy sector.

Noting that the sacrifices that Ghanaians made had put the economy back on track, even though living conditions were deplorable, the President said that that made the economy more resilient even in the volatile global financial environment.

“We have contained the unsustainable utility and fuel overruns and implementing the automatic price adjustments of utility prices that took effect in July and December 2015 respectively.

“The implication has been a minimal budgeted amount of about GH¢50 million from the 2015 budget and provisional outturn relatively lower than provided for considering that in the past government has had cause to spend over GH¢1 billion for overruns in subsidies.

He also said government had made human resource and payroll system upgrade and audits, with a major policy of a net freeze on employment in some public sectors excluding health and education.

“The effect has been a reduction in the waste to GDP ratio from 8.9 percent in 2012 to 7.9 percent in 2015, and as a percentage of tax revenue, a reduction of 53.3 percent in 2012 to 43.6 percent in 2015, as well as our success in migrating public sector staff onto the single spine salary structure. It is expected that with the stability achieved, negotiations for base pay for next year will commence in April this year.”

By Samuel Boadi