Experts call for greater transparency in oil industry

The roundtable discussion, which was organised by the Institute of Economic Affairs (IEA) on the theme, “Making Ghana’s oil resource count”, was aimed at deepening accountability in the oil sector to ensure maximum benefit from the natural resource.

Mr Amin, who is the Executive Director of ACEP, called for the mandatory disclosure of contracts between the government and oil companies, in line with international best practice.

He also underscored the need for an open and competitive bidding system, especially in known oil discovery sites, instead of the adoption of an open-door policy in which the government negotiated with contractors.

Mr Amin expressed concern over what he considered to be “too much discretion” in the industry, pointing out that the absence of an open and competitive bidding system could give too much official discretion.

He said many oil companies operating in the country were not paying corporate tax because the law granted them that dispensation based on the fact that they had to recover cost and insofar as they did not declare profits.

He said it was the responsibility of the government to explain that legal provision to the public to clear suspicion in the minds of people.

Mr Amin said already there was suspicion that some of the oil companies were taking undue advantage of the flexibility in the law to avoid the payment of corporate tax and stressed the need for strong regulation to plug the loopholes in the law.

For his part, Mr Amewu, who is a Research Fellow at ACEP, underscored the need for effective rule of law, dialogue between the government and civil society and transparency in order to ensure accountability in the oil industry.

He said the legal provision that required the regulatory body to give licences to and monitor the operations of oil companies at the same time was inappropriate because it undermined transparency.

A Senior Economist at the IEA, Dr John Kwakye, said one of the major challenges in the oil industry was the lack of disclosure of information on contracts, production levels and revenue management.

He expressed the hope that the roundtable discussion would help ensure that Ghana avoided the pitfalls in the oil industry that some oil-producing African countries had to deal with.

Story by Kofi Yeboah

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