What's Next for Ghana’s Natural Resource Governance as Mahama Is Elected

Country: Ghana
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As I drove home earlier this week past spontaneous celebration parties attended by men and women in still crisp, white T-shirts printed with the face of newly-elected president John Mahama, I wondered what the next four years would mean for Ghana’s governance of natural resources.

Mahama’s election confirms his position as president, following his ascent from the vice-presidency after the death of President John Atta Mills. Mahama succeeded a president known as a leader and champion of good governance for oil, gas and mineral wealth. Ghana discovered massive oil reserves just offshore in 2007 and has since experienced increased economic growth; GDP growth increased from 7.7 percent in 2010 to 13.6 percent in 2011. The country is also the continent’s second-largest producer of gold, which it has mined for centuries.

The Mills-Mahama government came into power in 2008, after the previous government had begun the process, but had not yet put in place regulations for how to manage petroleum revenues. It had also put in place the mechanisms for Extractive Industry Transparency Initiative (EITI) implementation and had Ghana declared a candidate country. The National Democratic Congress government under President Mills carried forward the EITI process, and EITI designated Ghana as fully EITI compliant in 2010. Findings of EITI reports have led to a review of the mining sector taxation regime and the development of guidelines for the expenditure of mining revenues by local district assemblies.

Under Mills' leadership, the NDC government also pioneered Ghana’s petroleum revenue management law (PRMA) which provided for the creation of the Public Interest and Accountability Committee (PIAC). This oversight committee operates as an independent citizen body that monitors and enforces government compliance with oil regulations and reports its findings to the presidency, parliament and the public.

PIAC began its work in 2011 and published its first report in May 2012. There are however still many loose threads which Mahama should work to tie up where commitments have been made, starting with the finalization of regulations to guide the implementation of the PRMA and giving the PIAC the resources it needs to fulfill its mandate.

Other obligations include publishing the 2011/2012 EITI reports, which will cover Ghana's oil sector for the first time; presenting a draft EITI bill before parliament that includes provisions for contract transparency; developing a mineral revenue law; revising the Petroleum Exploration and Production Law and increasing local content. In an interview with Reuters, Mahama pledged to increase taxes on oil, gas and mining companies, and work on reviewing contracts with mining companies is ongoing.

As I drove home, the police cars which also crossed my path were headed for demonstrations held by the opposition who were contesting the results announced by the electoral commission. They reminded me that this was one of the most-hard fought elections in Ghana precisely because of the revenues which are expected to come when peak oil production is reached in the next four years, giving the state new resources to spend. RWI’s regional coordinator Emmanuel Kuyole summed up the biggest challenge for the next four years: “It is to ensure the petroleum revenues are spent wisely and in line with the Petroleum Revenue Management Act, which requires they be spent in a concerted manner on key areas in line with a long-term national development plan.”

Emma Tarrant Tayou is RWI Africa Regional Associate.

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