There is an urgent need to review and rethink the utilisation of oil revenues from consumption to investment, Dr. Steve Manteaw, Co-Chair of the Ghana Extractive Industries Transparency Initiative (GHEITI), has said.
He said it would be more prudent and sustainable if the country treats its oil and other natural resource revenues as income for investment and then live off the returns on that investment, rather than depending on the revenues for recurring expenditure.
“Nobody should actually depend on natural resource revenues for consumption. We need to treat our natural resource revenues as income for investment. We also need to live off the returns of that investment,” he said
Given that natural resources are finite, he said, the most prudent approach to maximising benefit from them is to invest a greater percentage of the revenues generated from them for present and future generations.
“Norway invests all its oil revenues and lives off a small percent of the returns. Botswana does the same – and even the uneducated Makola woman does the same.
“If that guides us, we will not be investing a chunk of our oil revenue in Free Senior High Education (SHS). The way to sustain Free SHS is to invest the bulk of our oil revenue and then use the returns or a bigger fraction of it to finance Free SHS. So, as long as that money remains invested, Free SHS will be sustainable,” he said.
Dr. Manteaw is a former chair of Public Interest and Accountability Committee (PIAC), a state watchdog over management and utilisation of oil revenues, and his comments’ come on the back of findings from a recent report by PIAC that says the country has gained 20 percent from an estimated US$31.2billion in the last ten years from commercial oil production, but with little or no results to show.
Corroborating the report’s findings, he said management and utilisation of oil revenues over the past ten years has yielded little impact because much of the US$6.5billion accrued to the state during that period has gone into consumption instead of investment.
“Today, if you ask any Ghanaian in the streets what has been the effect of 10 years of oil, what has been the effects on their lives, they will tell you ‘nothing’ because they are not feeling the impact of it. The reason is because too much of it has gone into ‘chop money’,” he lamented.
On what he makes of the decade of oil production, he said: “We have made some progress in terms of ensuring that our economy benefits from the oil extraction, and in ways that benefit the people who are owners of the resource. But we have also made terrible mistakes; and as we review 10 years of oil production, I do hope that we will take a relook at the terrible mistakes we have made, and draw lessons with the hope of avoiding a reoccurrence of those mistakes”.
He cited the US$30million investment into constructing Terminal Three at Kotoka International Airport as a good investment of oil funds: “That money has generated something around US$7million and the US$30million is in intact”.
Meanwhile, he described allowing political imperatives to direct spending of oil revenues – including allocations to entities like MUSIGA, MASLOC and others – as imprudent use of oil funds.