You are here: HomeNews2008 02 22Article 139660

General News of Friday, 22 February 2008

Source: GNA

Kufuor pledges transparency in disbursement of oil wealth

Accra, Feb 22, GNA - President John Agyekum Kufuor has assured Ghanaians that his government was committed to learning from international best practices in the distribution and utilization of oil wealth to ensure that the discovery of oil in Ghana did not become a curse.

In a speech read on his behalf at a reception organized by the Extractive Industries Transparency Initiative (EITI), the President stated that the discovery of substantial amount of crude oil off the shores of Ghana posed the challenge of ensuring that Ghana did not repeat the mistakes of many oil rich developing countries for whom the discovery of oil had been more of a curse than a blessing. This assurance comes ahead of a national conference on oil revenue management later this month in Ghana. A number of experts have been invited from various countries to share their experiences with Ghana and "enable us get it right, from day one."

"It is the aim of the Government of Ghana to ensure that extractive sector and for that matter oil revenues are utilized in the most efficient and effective manner with accountability and transparency being the guiding principles. It is only in this way, that we will be able to escape the spectre of our resources becoming more of a curse than a blessing to us," the President said.

President Kufuor noted that, the control of natural resources and the revenue they generated had evoked considerable rivalry among various interest groups in nations across Africa, saying that, at the heart of the conflicts were often the issues of accountability and transparency in the management and utilization of the extractive sector benefits. "We in Ghana have learnt a lot of lessons from the natural resource-related conflicts that have plagued a lot of countries on our continent and we are guided by this to ensure that the wealth of our natural resources are equitably distributed for the benefit of all, but more especially for those immediately impacted by extractive sector activities," he said.

He said emphasis needed to be placed on ensuring that revenues were properly accounted for and that they were directed towards programs that would improve the quality of and delivery of public service.

President Kufuor said he believed that one of the key ways of ensuring transparency and equitable distribution was for the extractive companies and government to disclose all revenues generated from the sector, including royalties paid by companies and received by government.

He noted that the disclosure of revenues would empower the citizenry to make informed judgement about the amount and sources of revenues accruing and thereby demand accountability from the political leaders using the appropriate processes without necessarily resorting to antagonism and bloody conflicts.

"For me a more balanced approach for equitable distribution of a nation's wealth is to subject the development of such resources to better governance norms and I think this is what EITI seeks to achieve," he said.

President Kufuor said since the launch of EITI in 2002, the EITI board, led by Professor Peter Eigen, who is also founder and Chairman of Transparency International (TI) had worked very hard to develop the appropriate governance structures to facilitate the implementation of EITI principles at the national level.

Meanwhile the 40-member EITI board drawn from the extractive industries, civil societies and governments of some of the 30 EITI-member states are meeting in Accra next week to discuss ways of improving transparency in the disbursement and utilization of revenue from the extractive sector.

This is the first time the EITI board meeting has come to Africa. All the four previous meetings were held in Europe, precisely in Paris, Berlin, London and Glasgow.

Prof. Eigen said the choice of Accra as the host for the fifth EITI board meeting was due to President Kufuor's declaration on June 11, 2007 to ensure transparency in the management and distribution of wealth generated from the extractive industry, especially wealth from the new oil find in the shores of Ghana.

"June 11 is my birthday and I was in Ghana with Mr. Kofi Annan, former UN Secretary-General on that day when President Kufuor made the declaration and I thought it was the best birthday gift ever," he said. EITI-Ghana Report on The Aggregation/Reconciliation of Mining Benefits in Ghana released in February last year indicated through the application of EITI principles, mining benefits realized for the period January to June 2004 was more than 1.228 million Ghana cedis, with mineral royalty payment/receipt alone amounting to 1.093 million cedis representing 89 per cent of the total.

The report however, said that in spite of the application of EITI principles there were still some issues of lack of transparency in the disbursement and utilization of the money.

The challenges according to the report included lack of regulations and guidelines for the utilization of mineral royalty receipts by District Assemblies and lack of detailed information on payments made by the Regional Offices of the Administrator of Stool Lands to beneficiaries.

It therefore recommended the establishment of formalised lines of communication between the relevant government agencies and interested parties to ensure transparency and fair distribution and utilization of benefits.

Join our Newsletter