Accountability, transparency in petroleum sector improves — IEA report

Ghana continues to make steady progress in accountability and transparency in the petroleum sector, the 2015 Petroleum Transparency and Accountability (P-TRAC) report of the Institute of Economic Affairs (IEA) has said.

The P-TAC Index report is based on tracking performance across four components of the management of petroleum resources; namely, revenue transparency, expenditure transparency, contract transparency and transparency in the management of the Ghana Petroleum Funds (GPFs).

For the 2015 index, Ghana achieved an overall average of 83 per cent, a five per cent difference from 2014 which was 78 per cent.

The overall goals of the P-TRAC project are to promote transparency and accountability in the management of the country’s petroleum resources and to enhance the level of responsibility on the part of the policymakers and implementers.

The annual P-TRAC report also seeks to educate and inform the general public about efforts made to manage the petroleum revenues and to highlight the challenges and concerns.

Bottlenecks

At a media briefing in Accra last Wednesday, a Senior Visiting Fellow of the IEA, Professor John Asafu-Adjaye, said even though some progress had been made in the management of petroleum revenues, there was the need for a speedy passage of the Right to Information (RTI) and the Petroleum Exploration and Production Bills in the next sitting of Parliament.

He said the IEA believed that the current method of allocating funds under the annual budget funding amount (ABFA) was inefficient and it diminished the developmental impact of the petroleum revenues.

Prof. Asafu-Adjaye said the Minister of Finance had indicated in the budget statement that the percentage of revenue allocated to the ABFA had been used in the construction of 93 road projects but no further information was provided as to where those projects were located.

“We are concerned that some of the infrastructure projects are incomplete. We advocate a more inclusive approach in decisions on projects to be funded and urge the formation of a committee of stakeholders to advise the minister,” the reported suggested.

“As the situation is currently,” he said, “the minister has too much discretion and that the country runs the potential risk of the GPFs being diverted away from the core objectives of the law that established it.”

Enhancing transparency

“To enhance transparency in the award of contracts and licenses, we recommend a more open and transparent process of awarding contracts and licenses, with more public disclosure of information on the process. In particular, we advocate a points-based system for assessing licenses,” the report said.

Prof. Asafu-Adjaye said of the components of the P-TRAC Index, the component of contract transparency showed the least improvement for the reporting period.

It said the only improvement came from the establishment of the Petroleum Commission to regulate the sector and advise the government on the award of contracts and licenses.

However, the report said, full disclosure of contracts and the processes involved were lacking and the research capacity of Parliament remained weak.

“We urge the government to adequately resource Parliament and other oversight agencies to enable them to discharge their duties more effectively under the Petroleum Revenue Management Act.”