sharing in governance of extractive industries
We have read with horror and trepidation, government’s decision to use GHC 3.6 million to rebrand 116 Metro Mass Transit buses. According to the 2015 Annual Report on the Petroleum Funds discussed in Parliament, government spent 31,457 cedis on each bus, leading to a cumulative expenditure of GHC 3.6 million. This expenditure incurred by the Ministry of Transport was made from the Petroleum Funds.
The wanton use of natural resource revenues for such reckless expenditures should give every Ghanaian cause for concern. Natural resource revenues are not like other conventional sources of revenue available to the state. First of all, they are revenues that come from resources that are finite. Furthermore, prices of these natural resources are very volatile and unstable. These two key factors combined dictate that natural resource revenues are utilized prudently to ensure that the state derives optimum benefit from their extraction.
It is sad to note however that successive governments have ignored these key principles regarding natural resource revenue management, and gone ahead to utilize revenues on items of expenditure that add no value to the lives of residents living in frontline communities or ameliorate their development challenges occasioned by the presence of these natural resources. For instance in the past we have seen mining revenues being used on recurrent expenditure like waste management, painting of district assembly administration buildings, purchase of fuel for DCEs’ vehicles, repair of telecommunication facilities, etc. This has gone a long way to contribute to the increasing social tension in resource rich communities. Sadly, after more than 100 years of “formal” mining in Ghana, the country has very little to show for it.
Going by lessons in the mining sector, one would have thought that government, since the discovery in 2007, and commercial production of oil in December 2010 would be mindful of the need to utilize petroleum revenues prudently. Several reports, including those of the Public Interest Accountability Committee (PIAC) have implicated government in the misuse of petroleum funds.
The Centre for Social Impact Studies (CeSIS), a research and advocacy organisation roundly condemns the use of petroleum funds to rebrand Metro Mass Transit buses. Not only is the expenditure for the rebranding immorally outrageous, but the very idea that they came from petroleum funds makes it even more disappointing, to say the least. We are furthermore compelled to question the government’s own sense of priority in the utilisation of revenues.
At a time when various regulatory and oversight agencies in the natural resource sector like the Minerals Commission, Environmental Protection Agency, Petroleum Commission and Public Interest and Accountability Committee are under-resourced, it makes no sense to spend GHC 3.6 million to rebrand vehicles. For the past three years mineral royalty has also not been paid, stalling development in mineral-dependent district assemblies. Moreover, SEND Ghana, a Ghanaian civil society organisation reports that government’s own fertilizer subsidy programme has slumped from 50 percent in 2008 to 21 percent in 2015. It is little surprising that Ghana has stumbled two places back in the 2014 Human Development Index!
We wish to once again call on government to refrain from spending natural resource revenues on items of expenditure that do not inure to the benefit of residents living in frontline communities. Considering the finite nature of natural resource revenues, it is absolutely necessary for government to concentrate expenditure on sectors like education, health, agricultural productivity and infrastructural development. This is the only way that the people of Ghana can collectively benefit from the exploitation of their natural resources.
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