The Ghana Institute of Governance and Security (GIGS) has advocated that Ghana adopted the production sharing agreement formula instead of the hybrid system in sharing its oil proceeds with investors in the oil sector.
The hybrid system is where the country is compensated through the payment of royalties, while the production sharing system refers to compensation paid on agreed percentage of the oil revenue.
Ghana, the GIGS argued, was currently using the hybrid system, resulting in the loss of huge sums money to investors in the oil sector.
According to the institute, the production sharing formula is the world’s standard norm in sharing oil proceeds and that the current formula in distributing the country’s oil wealth was unsatisfactory.
In a petition addressed to the Chairman of the Council of State, Nana Otuo Siriboe II, dated March 9, 2017, the GIGS accused Ghana’s elite technocrats at the Ghana National Petroleum Corporation (GNPC), the Ministry of Energy and the Petroleum Commission of disadvantaging citizens in their share of the proceeds from oil.
The statement was jointly signed by Mr. Solomon Kwawukume, the Senior Research Officer at the GIGS and Fair Trade Oil Share advocates Imam Adam Abubakar and Rev. Charles Eric Gyeban-Mensah, Tema Metropolitan Chief Imam and Industrial Chaplain respectively.
“They have messed up the whole country big time and the upstream oil industry to the advantage of foreigners on the wrong notion of attracting investment into the sector.
“If the world standard norm, the production sharing agreement fiscal regime which laws were on our statute books before commercial discovery was adopted, Ghana would not be in this dire economic quagmire and hardships the masses are suffering,” the statement said.
To the signatories of the statement, the technocrats have ill advised the previous governments and other state institutions to believe that by adopting the hybrid system the country was doing the right thing.
“They must be stopped from their deliberate public deceits, falsehood and misinformation. We cannot sit down and see the few elite technocrats and politicians wreck the economic destiny of our dear country for their selfish interests,” the statement stressed.
To this end, the GIGS has called on the Council to initiate a national forum whereby groups for and against the current system make a presentation to support their claim for a national consensus to be reached as to what fiscal regime was adopted in sharing the country’s oil proceeds.
The GIGS said it was crucial there was transparency in the share and management of the oil proceeds because “the absence of truth from any human society creates corruption, insecurity and instability which undermines development and that is the exact situation we are facing. Our current development is superficial.”
By Julius Yao Petetsi