26 June 2014, Accra – The abundance of oil resources in commercial quantities in Ghana, coupled with weak institutions in the management of the resources, will ultimately destroy the country’s economy.
This is according to American governance expert, Professor Larry Diamond.
Diamond said oil exposed a country’s weak institutions and “teased and tempted” a country’s leaders to become “massively corrupt.”
Diamond, a senior fellow at Hoover Institution and Freeman Spogli Institute for International Studies, who is in the country to deliver a lecture on oil windfall, said the most effective way to ensure Ghanaians benefitted from its oil find was “radical transparency” in the sector.
He said unlike Nigeria, Ghana has better governance structure and a higher per capita income than Nigeria.
But he called for the oil sector to be “insulated” from politicians, and institution of stronger auditing and monitoring structures.
Ghana began commercial production of oil three years ago.
Government has said revenue from oil would be focused on expenditure and amortization of loans for oil and gas infrastructure, roads and infrastructure, agriculture modernization and capacity building.
To regulate the industry and ensure greater transparency, Parliament has passed the Petroleum Revenue Management Act, Petroleum Commission Act, Petroleum Exploration and Production Law, Petroleum Income Tax Law, National Petroleum Authority Act among several others.
Others in the offing include the Local Content and Local Participation Policy Framework, the Right to Information Bill, the Marine Pollution Bill and the Ghana Extractive Industries Transparency Initiative (EITI) Framework.
But despite these laws, the overall score for transparency in the industry in the country was measured at 59, 7 percent, with transparency in oil and gas funds recording even a lower average score of 44 percent, according to the Institute of Economic Affairs (IEA) Petroleum Transparency and Accountability Index.