Ghana prepares for oil exploitation

Ghana has taken a bold initiative towards a systematic establishment of economic, technical and legal framework to manage its oil extraction, whilst maximizing its benefits to improve living standards. To this effect, the government has assigned a team of experts in the oil industry to develop a master plan for the petroleum sector.
The team of experts has been subdivided into six working groups and each is supposed to produce a policy document which would become part of the master plan to guide the development and management of Ghana's emerging oil industry and how it interfaces with the rest of the economy.
This was made known at a workshop dubbed "Consultative meeting on the Oil and Gas fiscal regime and fund types" in Accra, on Tuesday by the Ministry of Finance and Economic Planning (MOFEP).
The workshop is aimed at providing space for in-depth discussions on the specific issues of taxation and all the fiscal arrangements most suitable for the country if it intends to achieve the desired growth of a middle income status in the shortest possible time.
Among the six working group includes- the legal regime, fiscal regime and fund types, health, safety, environment and community issues, security, local content and capacity building and downstream, natural gas utilization and infrastructure development.
Addressing the gathering (mainly made up of stakeholders in the oil industry) at the workshop, a Chief Director at the Ministry of Finance and Economic Planning, Nana Juaben-Boaten Siriboe noted that the discovery of oil in the country puts the economy on a good stand towards realizing a middle income status and is leaving no stone unturned to learn from oil producing countries who have benefited from the smooth management of their upstream resource activities.
According to him, the experiences of some resource-rich Developing Countries in managing their oil has not been encouraging as it has in one way or the other destabilised the economies of those countries.
"The experiences of some resource-rich developing countries suggest one thing. Growth and prosperity from oil discovery are not inevitable. The irony in some cases is that the oil effect has been destabilising, leading to low growth, widespread inequalities and conflict, the so-called resource curse. According to one expert, the curse stands ready to capture new and unsuspecting economies that have weak institutions and poor standards of governance", he noted.
"The good news is that there are other countries that have grown and developed from their natural resources. Botswana with diamonds and Norway and Malaysia with oil are good examples", he added.
Nana Siriboe averred that the eventual benefits the country can receive from its oil and gas resources depend, in part, on the fiscal regime that the country has in place.
"In fact, many experts believe that the fiscal regime is what separates those economies where petroleum has made a difference to the overall living standards of citizens from where it has not", he said.
The country, since February 2008 has had the benefit of many experts on several aspects of the petroleum industry through a number of workshops. Nana Siriboe contended that the biggest challenge facing the country is how to transform the experiences gained to good use.
"Our challenge is rather how to take these lessons and experiences and use them to develop the rules and guidelines that will yield the maximum direct and indirect benefits for all Ghanaians and to make progress towards a good and prosperous society", he noted.