Ghana scores 63% on Resource Governance Index

The 2013 Resource Governance Index (RGI) has showed that Ghana received a "partial" score of 63 per cent in the extractive industry and ranked 15th out of 58 countries.

The report funded by Revenue Watch Institute revealed that the country scored well on the institutional and legal setting and safeguards and quality controls components. Ms Marie Lintzer, Government Policy Analyst, Revenue Watch Institute for Natural Resource Centre in New York disclosed this in Kampala, Uganda at the 5th Oil, Gas and Mining training programme for 30 African Journalists from Ghana, Tanzania and Uganda.

The 10 - day programme is on the theme: “Strengthening Media Oversight of the Extractive Sectors: “Reporting on Oil, Gas, and Mining.” It is designed to help journalists develop the knowledge and skills to stimulate and feed public debate on how best to ensure that the proceeds from natural resources are used to serve the interests of their countries and citizens.

Ms Lintzer said RGI measures the quality of governance in the oil, gas and mining sector of 58 countries. “From highly ranked countries like Norway, the United Kingdom and Brazil to low ranking countries like Qatar, Turkmenistan and Myanmar, the Index identifies critical achievements and challenges in natural resource governance,” she added.

She said these countries produces 85 per cent of the world’s petroleum, 90 per cent of diamonds and 80 per cent of copper, generating 2.6 trillion dollars in annual profits. Ms Lintzer said in 41 of these countries, the extractive sector contributed a third of gross domestic product and half of total exports on average and that in 2011, oil revenues for Nigeria alone were 60 per cent higher than total international aid to all of sub-Saharan Africa.

She said the Index scores and ranks the countries, relied on a detailed questionnaire completed by researchers with experts in the extractive industries. She said the index assesses the quality of four key governance components, such as institutional and legal setting, reporting practices, safeguards and quality controls and enabling environment.

Ms Lintzer said on the institutional and legal setting Ghana earned a "satisfactory" score of 79 per cent and ranked 12th, the product of substantial disclosure policies and an evolving legal framework. She said the in 2012 the Ministry of Minerals, Lands and Natural Reserves announced reforms to introduce competitive auctions for mineral licenses, adding that environmental impact assessments are required prior to licensing, but the results are confidential.

Ms Lintzer said the country scored 51 per cent and ranked 25th on reporting practices in the extractive industries and attributed it to government inability to publish comprehensive information on most key aspects of the mining industry. She said information on applications for mining concessions is available for a fee, but there is no clear explanation of licensing criteria, stating that mining contracts are not published and it is difficult to evaluate the actual fiscal terms that apply to companies.

She said Ghana received a "satisfactory" score of 73 per cent on safeguards and quality controls and ranked 13th, the product of substantive anti-corruption policies but a lack of assertive government oversight. She said Members of Parliament from the ruling party are often appointed to the boards of mining companies, giving legislators a personal stake in the industry despite laws prohibiting conflicts of interest.

Ms Lintzer said the Ghana Audit Office reviews government agencies' financial statements and reports to parliament, but audit mechanisms are weak and no reports specific to extractive revenues are published. On enabling environment, she said the country received a "partial" score of 59 per cent, which reflect less-than-satisfactory rankings on measurements of government accountability, transparency, and the rule of law.

She said mismanagement and corruption have many manifestations and could have dire consequences, stressing that some countries negotiate poor terms with extractive companies, forsaking potential long-term benefits. Ms Lintzer said many countries do not collect resource revenues effectively and even when they are collected they end up in government coffers and the moneys are not spent to the benefits of the public.

She said the Revenue Watch Institute calls on government to disclose contracts signed with extractive companies and ensure that regulatory agencies publish timely, comprehensive reports on their operations and detailed revenue and project information.

The Revenue Watch Institute is a non-profit policy institute that promotes the effective, transparent and accountable management of oil, gas and mineral resources for the public good. Through capacity building, technical assistance, research and advocacy, the Institute helps countries to realise the development benefits of their natural resource wealth.