Business News of Friday, 19 February 2016
Source: The Finder
Some energy experts and political parties have asked government to cut budgetary support
to the Ghana National Petroleum Corporation (GNPC) the Tema Oil Refinery (TOR) and the Bulk Oil Storage and Transportation Limited (BOST).
The New Patriotic Party (NPP), the Convention people’s Party (CPP) and the People’s National Convention (PNC) contended that the persistent reliance of the non-performing state owned institutions on government subvention is a needless drain on Ghana’s economy which is itself in dire straits.
This was at a public launch of political parties’ policy positions on the governance of Ghana’s oil and gas sector held in Accra last week.
The launch was organized jointly by the Natural Resource Governance Institute (NRGI) and the International Institute for Democracy and Electoral Assistance (International IDEA).
The three political parties argued in favour of policies that will ease government off the cost of maintaining GNPC, TOR and BOST.
“The situation where we put GNPC on the national budget feeding it like a baby which never grows must cease,” demanded Dr Steve Manteaw of the Civil Society Platform on Oil and Gas.
Dr Manteaw who is also the Co-Chair of the Ghana Extractive Industry Transparency Initiative (GHEITI), in an interview with Business Finder insisted that the Corporation must be taken off the national budget and made to fend for itself.
“Examples abound; the GCB used to be controlled by government but we decided to offload government’s stake on the stock exchange, it was oversubscribed and today GCB is a successful business venture,” Dr Manteaw pointed out.
The GNPC, he recommended should be put on the Ghana Stock Exchange so that individual Ghanaians can become owners of their national oil company.
The problem with GNPC, Dr Manteaw pointed out had to do with excessive governmental control.
“We lack transparency in the way public resources are managed on our behalf; we have a similar situation with the ECG as government remains highly indebted to that company,” he explained.
According to him, government hadn’t shown any roadmap to redeem its indebtedness to ECG and yet had placed the company on privatization, while “at the same time offloading the indebtedness of ECG onto ordinary Ghanaians through the energy sector levy; this is fraud being perpetrated on Ghanaians.”
The parties took issue with GNPC’s role in being a regulator and at the same time a player.
The NPP described the situation at GNPC as irregular, wondering “where in the world it could happen that a commercial entity gets yearly remittance from government and decides to apply the resources to the sponsorships of the national football team.”
“We will do something about it when we are in government,” submitted the NPP’s Kwaku Kwarteng.
GNPC, the oldest arm of state created in 1983 to oversee and exploit domestic petroleum resources owns stakes in exploration and production projects, and gets a share of after-costs oil revenue sent to government.
The Corporation is planning to tap capital markets and borrow from banks to build up its capital base for both expenditure and creditworthiness.
On TOR, parties contended that the facility had been fraught with efficiencies that have arisen as a result of TOR being treated as a dumping ground for party foot soldiers.
TOR has been reeling under massive debt over the years but has struggled to stay operational.
Dr Wiliam Ahadzie of the ruling NDC maintained that government had made significant efforts in instituting legal arrangements in the oil and gas sector some of which were the promulgation of the Petroleum Revenue Management Act (PRMA) in 2011(Act 815) and the Petroleum Commission Act 2011 (Act 821).
On management of revenues from the sector, the NDC espoused its belief that it was prudent to “spend some of the revenue on the on-going development agenda of government, save some for future generations and invest some in infrastructure needs to improve the social and economic wellbeing of the people.”