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25 Responses to “Oil Revenue Management, Clause 5”

  1. Hi,
    I wish we have more people of your calibre in Ghana. You see, this is the same mistake our first president did and we are now suffering. The British left 240million pounds for us as a new nation. He did not heed the advise from J.B.Danquah and his people to use part of the money to train the future leaders so that we could build our future as being done by Malasia(cocoa and palm oil) with technical training from Ghana. What can we do with cocoa and palm oil today? Koreans are building their own vehicles, Ghana cannot manufacture a bicycle.. I’m in the US, at anytime I go to the store to buy palm oil, I chose oil from Sigapore, Malasia or Mexico, because they don’t ‘clot’. If you read the recent lecture by Mr. S.K.B.Asante, Nkrumah’s own man, you will realise that getting to the end of his rule, he found the management ability in the “Dombo” people who are now the NPP. group. Things went the wrong way. He hired foreign contractors to build Tema township, Motorway, etc, which we could have done after 10 years if the young ones were trained to do so. Now, I think the clause as it is must remain for the nation to accrue enough money for our coffers whilst we train the younger generation to take over the management and technical aspect of the petroleum business. If even we wait for the next two, three or four years before we use part of the oil money as colateral, it will be good for the next generation. People have preached “EQUALITY” for years but , they have become more equal than those ahead of them.

  2. Dear Sydney,

    Read your interesting piece in today’s Daily Graphic. Now, assuming, without admitting (after all building rail lines and roads are not new to this country) we do not have the local ‘absorptive capacity to become receptive to acquiring and assimilating external knowledge’, have you given a thought to the numerous Ghanaian professionals that live and work abroad who could be enticed to relocate?
    ‘Gradually, we will become capable of doing the larger projects without external supervision’ – seems to me like we should not even venture into pumping out our oil find at all until we build the capacity so to do.
    We have heard it all before, even before independence, the ‘gradualist approach’. Wonder where we would be today if some bold measures had not been taken and the likes of your namesake had not been entrusted to head and build reputable organizations such as the VRA.
    ‘Ghanaians are not comfortable handing unfettered control of petroleum revenue to politicians’ – quite so, but if the current administration’s track record of reducing inflation, stabilizing the currency, bringing down the cost of borrowing, reducing the fiscal deficit, paying numerous debts – TOR, contractors etc, – is anything to go by, they surely have earned that modicum of trust so thoroughly jettisoned by the previous administration.

  3. CLAUSE 5 IS THE BEST GUARANTEE THAT POLITICIANS CANNOT SQUANDER THE OIL MONEY….EVEN BEFORE IT IS GENERATED.

    Ghanaians should NOT amend this Clause. If we do, parties will misappropriate the revenues from oil EVEN before they have been created.

    LET US CONTROL OUR BORROWING!

    NO COLLATERISATION OF OIL FOR LOANS AND DEBT !!

    SAY “NO” TO BORROWING!!!

    SAY “NO” TO COLLATERISATION OF OIL !!!!

  4. Nana Ansah said

    POLITICIANS SHUOLD KEEP THEIR HANDS OFF FROM THE CLAUSE 5. Any attempt to alter clause 5 would be a recipe for disaster. So clause 5 should for now remaian a NO-NO.

    For the records, I am a staunch CPP supporter and Nkrumahist and I respectfully and even strongly disagree with anyone who argues that Ghana should engineer collateralized debt obligations with her new found wealth i.e. oil. From the get go the debate has been Ghana should not go the Angola, Nigeria, Gabon way but rather be judicious and implement a prudent monetary policy.

    Borrowing can be enticing and intoxication resulting in state addiction of contagious borrowing with an albatross of debt hanging around her neck. I mean collateralization of oil to secure loans or debt can be deadly. Case in point our sister nation Nigeria.

    Nigeria did borrow heavily in the 70’s during the oil crisis when oil prices shot up sky-high only to get a rude awakening in the 80’s when oil prices fell. Nigeria did have to pay interest on huge debts and as a result fell into the vicious cycle of borrowing more which we call in Ghana – carry forward. The borrowed money fueled corruption and it became folks sport for the military to intervene at will and further squander the state treasury thus ballooning the state debt further beyond the stratosphere.

    When I come to think about our beach weather and charlatan politicians, I see no single one of them who is in politics for the sake of the matter. Most of them are not full blood politicians. Ghanaians for that matter African politicians go into politics to enrich themselves and families that is why they hate accountability and transparency in their dealings. The 20% off the top has become a national epidemic which makes AIDS look pale.

    Corruption kills. And I bet, corruption today is silently killing more people in Ghana/Africa than AIDS if you understand my metaphor here. When public figures steal money meant for schools, health centers, providing portable drinking water, road construction(death traps) mismanage firms so that they go insolvent and workers are laid off swelling the already jobless population then you are killing these people slowly whilst they are alive.

    Thus, since no one can tell when the next world economic crisis would be in sight although we now have one which we cannot wish away, it would be unwise to do like our sister nation did but rather save money for the rainy day. Those who go borrowing, go sorrowing. We should initially build a capital reserve where we have raw cash at our disposal like the BRIC (Brazil, Russia, India and China) states. Today, Brazil has more cash liquidity than the USA. America’s economic power is declining as it stands today whilst China the lifeblood of America is growing.

    Lets us not get intoxicated and loose our minds but rather plan well before we embark on any policy that could probably be recipe for disaster.

    Nigeria failed to better the lot of her people due to oil reserves which served as collateral to secure huge loans. I shudder to think what posterity would say of us. History will not be kind to us if we fail in this endeavour. The enterprise of Commonsense is in adequate want, so to speak, in this matter of clause 5.

  5. Sammy king said

    We need perpetual development not one time development so NDC should not rush to collaterise the oil.They have wasted 20 years in Ghana’s development and if by that time they were able to find oil the collaterization period have expired for us to see development.

  6. The development of the country should be within its means. Yes the oil revenue will help gradual development and that can be sustained for many years to come. With colaterization it is true there could be quick developement but no money to maintain the infrastructure because the entire revenue will be tied to loans and interests repayment just like what happened to Nigeria. They took in much loans and accelerated development such as the building of a whole new capital city from scratch, now those loan repayments are due with interests so the money needed to maintain or repair those infrastructures are going into the loans. Above all, the children are going to be saddled with those loans. Please lets learn to live within our means.

  7. Danso said

    Let us follow what the Bible teaches, live within your means.You never progress if you are in debt all the time. It will be a collosal mistake if we colaterize the oil revenue for development.When you owe, you alwasys become a slave to the lender. We should all apply this principle to our daily living.

  8. Clause five must be respected as the say of we the masses. it is the surest way of making sure that the politicians will not have their way. why the rush Mr Politician? u wanted our inputs to show to the whole world that the process has truely been participatory. so why do u want to use only Parliament to bustardise our inputs? Politicians, please respect us!!!!!!!!

  9. When will the NPP and it’s NDC politicians stop insulting us. so now Ghana is for the politician? we placed u there to safeguard our collective interest and clause 5 happens to be one. please!!!!! abide by it and don’t insult us.

  10. Honestman said

    Aspects of this article seeks to insult Ghanaians!That we don’t have the capacity to manage. When then will we develop that capacity? Only when NPP is in power? What a joke? Food stuff is getting rotten in the field due to lack of road, children are studying under tree, ghanaians are squatting at Sodom, Cholera everywhere because of lack of potable water for the people and you greedy bastards think that we should tightly lock up the oil money till npp comes to power to steal it for their personal use? Tell me, did npp not collateralize the oil money long before drilling started when they were still in power? Why did idiots like this writers not talk against it? U all are indeed fools like the VEEP said!

  11. Jan said

    honestman i think yu are missing a point here. The point being made is that though politicians and parties tend to change their minds and policies after they have experienced the reality on the ground and that they may have a valid reason for wanting to change or amend clause 5 to match the reality on the ground.

    He is also pointing out how uncomfortable most Ghanaians feel (if not you) about huge amounts of money involved in view of our past history of developmental project; never completing for lack of effective management, accountability and transparency. In the end projects have been left half completed because of corruption and you know what i am writing about.

    So the approach to this new found oil wealth should be that of caution interlaced with gradually managed improving or updating the capacity of Ghanaian expertise to engage and move these projects forward.

    He is not politicising the realities we face today unlike what you are trying to do with your insults. Can’t you make your points in this current debate without resorting to insults? This is what mature political discourse is about. Calling people bastards in a political/economic debate is really unbecoming of an honest gentleman and a broker in politics PLEASE!!!!

  12. Honestman or who ever you are, if you don`t have the knowledge and wisdom to to understand what the writer is saying ask for explanation without insults. It is due to the fact that our leaders and so called intellectuals share your mindset and behaviour, that food get rotten in the field due to lack of road, children study under tree, ghanaians squatt at Sodom and Cholera everywhere because of lack of potable water. Even the selfless and knowlegeable Nkrumah who knew what he was about made one serious mistake ie to think that people with academic degrees without expierence could maintain and develope the projects, he initiated for the benefit of Ghana and Africa. This is why the socio-economic development projects of Nkrumah couldn`t move Ghana forward. People like you who are not prepared to learn from our past mistakes when allowed will sell our future out to satisfy their greedy interest. No country on earth has developed by using its resource as collaterals for loans for the provision of infrastructure by the lender. Ghana can only move forward if and only if the infrastructural development projects are implemented by companies based in Ghana. This apart from creating employment and promoting state revenue in terms of incometax enhances maintainance and technological development of the country. Honestman do you know that without using our resources as collateral the lender has to be convinced that borrower is capable of paying back the loan before giving out the loans something that will force our government to do at least some cost benefit, loan servicing and payment analysis before going in for a loan. Remember Ghana is not the property of NDC or NPP and will have to move forward either with them or without them. Can you tells how are going to maintain the Indian built Jubilee House, the Chineese built Stadiums,the chineese built roads etc in at least 30 year time.

  13. Kojovi said

    Mr/Ms Honestman my question is why in a rush to borrow against our oil? Who told you only when NPP in power that oil money will be allowed to be used for development? What NDC is trying to do is they are not sure to retain power in 2012 election therefore they are using “bugabuga” tactics to bollow for unsustainable development, (1) to please electorate (2)in case they lose they have their share in the form of corrupt. The onus transpire on the party in power who will face the wrath of Ghanaians for not keeping up developement depite oil production. NDC will hide behind and blame that goverment for not performing despite draining our oil in advance. NDC may use propaganda and win power back as mojority of the masses don’t understand NDC manipulation of cause “5”. No rush please.

  14. Ghana Boy said

    NDC can borrow all the money in the World Bank that’s not my problem but how to use the money wisely is the question.Just this year, President John Atta MILLS got good $16 billion dollars loan from China and Japan,what have they done with it?Let us see the outcome before we go for another one. Nobody borrows money for nothing,the government should come out with specific feasible projects and the cost before they ask for funding, you just don’t go round borrowing.When NPP used some portion of cocoa for collateral they studied the BUI DAM project and needed $600 million dollars to fund it,that’s a clear investment for energy supply.When they did it again to pay for oil supply it was also specific.
    Now I want the NDC to tell us what they have done with the $16 billion dollars loan. Then what kind of infrastructure are they talking about? A vague project or ghost project? No wonder, Kwame PREPRAH and Tsastu and others NDC 1 guys went to NSAWAM PRISON for mismanagement.Many more will be thrown into jail very soon,when are you going to learn ?

  15. Jan said

    I agree, there is no real information to show Ghanaians what the cash flow situation is with regards to money borrowed and used on projects.

    I suggest we have a DEDICATED WEBSITE to show Ghanains the developmental and financial state of all these projects under the Ghana Agenda policy so we can all see for ourselves.

    No more bamboozling us with ‘we have done this, we have done that’ whatever you have done or are doing let us see the details on the government website and I propose a name for this; GHANA AGENDA WEBSITE or anything appropriate. NO MORE LIES, MORE ACCOUNTABILITY, MORE TRANSPARENCY, MORE OPENNESS, MORE HONESTY AND NO MORE BULL

  16. WE ELECTED THESE POLITICIAN BECAUSE THEY ARE ALSO GHANAIANS AND WE TRUST THEY CAN DO THE WORK FOR US, SO WHY DONT WE ALLOW THEM TO EXERCISE WHAT THEY HAVE FOR US. LET’S CRITICIZE CONSTRUCTIVELY

    • Jim said

      The idea is to keep every government on their toes. Are you saying we should keep quite and watch both good and bad policies go through?

  17. Koo said

    This NDC government is behaving as if without oil nothing can be done to improve the living condition of Ghanaians.Embarking on such a borrowing spree may sound good but where is our ability to pay all these loans back.I am already seeing a scenario when our oil will is ceased and handed over to others.This is a clear case of irresponsible borrowing.In their quest to do something about the uncountable promises they made to Ghanaians, they have taken to the road going to everybody in search of loans.Those they are going to can simply see that these loans can never be paid.

  18. Kl said

    Borrowing is backed by ability to pay back. If oil prices fall so badly and are unable to raise enough revenue to pay back within reasonable time we lose our rights to those oilfields until we pay back and if not within 20 yrs when the oil is supposed to run out then we have had it.

  19. RTK said

    This is an attempt by the government to dole out the oil revenue for its activities, other than the development activities the revenue is meant for.When we are talking about financial leverage,our ability to use debts to borrow money, we consider debts, assets and equity in case of companies, the assets we have as a country are already a collateral for our borrowing strength.Specifying a particle assets for that matter as a collateral is a recipe for disaster.It can create a system of gradual take over. Any default on the terms can be a big blow for the country.Price hedging can emerge from this plan.I can tell you that today some countries are still selling a barrel of oil between $45.00 and $50.00 whilst the world market price is between $83.00 and $85.00.Ghanaians should look at this issue critically and avoid unwarranted danger.We should not do this with greed, but with an open mind for the welfare of the country.

  20. INFRACSTRUCTURE, YES. BUT WE NEED TO BE SPECIFIC AND SELECTIVE. IMPROVING INTRA AND INTER CITY TRANSPORTATION AND CLEANING UP THE CITIES AND TOWNS HAVE NUMEROUS BENEFITS INCLUDING IMPROVEMENT IN THE INVESTMENT CLIMATE. SOMETIMES FEAR IS THE PROBLEM. ONCE WE DEVISE A SOUND SYSTEM OF SUPERVISION AND ACCOUNTABILITY, WE SHOULD BE EMBOLDENED TO TAKE OFF.

  21. I am also in agreement with Clause 5 as it stands. I do not trust our politicians not to misuse oil revenues for their personal means and siphon millions of dollars into foreign accounts. Such mismanagements led to the collapse of our Black Star Line and Ghana Airways and now Ghana International!!!

  22. I read that Kosmos Energy was intending to sell its “baby” to ExxonMobil, and this without prior permission from the gov’t as stipulated in one of the numerous clauses. Even though this is very wrong and actually takes Ghanaians for granted, I doubt the ability of a 100% Ghanaian government acqusition of Kosmos’ “baby” to be in the best interest of the average Ghanaian for the simple reason that sooner or later it is going to suffer the same fate as the Black Star Line, Ghana Airways and Ghana International Airlines!!! It seems there’s no limit to the greed of our politicians and their croonies!!! I have been living outside Ghana for more than 30 years now and my heart breaks at the inability of those who we elect into power to effectively manage our vast resources in order to build our country. They surely can but greed prevents them from doing so!!!

  23. Qwuasi said

    It’s time we go home,form companies.associations,research groups from grassroot through university to tackle problems of corruption,illegality,mismanagement,etc.

    It’s sad,when you sit by the TV or read an article on Ghana ,the depressing state,ignorant leaders,selfish heads,etc.they take actions without knowledge and foresight.

    Oh when shall we?

  24. if they mess the oil money up we will kill them

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