Natural resource management disgraceful – ACEP

Ghana is still faced with the risks of mismanaging and corrupting its natural resource wealth, particularly minerals, oil and gas, the Africa Centre for Energy Policy (ACEP) has noted.

In a statement issued recently to commend government for its ranking on the Revenue Watch Institute’s 2013 Resource Governance Index published lately, the centre stated that there were no mandatory disclosure requirements of Petroleum and Mining Contracts, while some of the Petroleum Contracts published so far were at the discretion of the Minister of Energy following pressure mounted by civil society.

“Petroleum and Mining concessions are still granted through sole sourcing and closed door negotiations rather than an open and competitive process. Mineral revenues ceded to Local Authorities and traditional rulers are not managed transparently, and the promised Mineral Development Fund.”

Among other things, it added that the law remains a dream in the country, and Ghana has also not passed the Right to Information Law.

“We are also alarmed at the performance of African countries generally on the Index in spite of a decade of global campaigns for good resource governance in the continent’s resource rich countries, where poverty levels have risen over the years.

Ghana placed 15th on the Composite Index scoring an average of 63 marks. This demonstrates that significant efforts have been made by Ghanaians over the years to improve on the governance of natural resources.

However, analysis of the Resource Governance Index revealed startling observations about resource rich African countries.

“Of the total 58 countries and states featured; and 21 African countries, only six African countries were in the first half, but the rest of them fell in the last half.

“Of the 21 African countries, only five were graded partial performance, but the rest performed poorly – eight graded weak and eight graded failing. None of the countries was graded satisfactory.”

It said that of the 15 major failing countries on the composite index, nine were the most resource-rich countries in the world of which five countries, more than half, were from Africa.

“In the governance of Natural Resource Funds, there were six African countries featured in this category out of 23, but all except Botswana fell in the bottom 10 countries.

“These observations do not present an encouraging picture about Africa. We therefore call on African Governments to double their efforts at improving good governance in the management of the continent’s vast natural resources. African Governments must quicken the pace of governance reforms covering in particular transparency in the award of resource concessions, resource revenue management and expenditure from resource revenues.”

ACEP said African Governments should also build strong state institutions and provide them with the resources to effectively execute their mandate and eliminate political interference in the affairs of these institutions.

Also commending the Revenue Watch Institute for instituting the Resource Governance Index, ACEP noted: “We however observed that the index emphasizes the “input side” of resource management and ignores the “output side.”

It furthermore emphasised that the challenge in resource-rich countries in Africa nevertheless rested on how to translate resource wealth into tangible development outcomes.

“They are faced with challenges of wasteful investment of resource revenues, poor quality of spending, and corrupt procurement practices for public investment projects. Generally, the public financial management side of natural resource management is too weak.”