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Ghana loses $4.9 billion in extractive industry

  • SOURCE: | qwesa2big
  • Mining 2Ghana lost a whopping $4.9 billion through illicit financial flows from 1970 to 2008 in the extractive sector.
    According to the Global Financial Integrity Report, this included loss of revenue from resource taxes.

    The 2012 budget statement also indicated that the nation lost $36 million annually from the mining sector through abusive transfer of pricing.

    The Executive Director of the Africa Centre for Energy Policy, Mr Amin Adam, made this known at the opening of an international conference on International Transparency Initiative in Accra last Wednesday.

    The conference aims at providing a platform for exploring accountability opportunities offered by international initiatives like the Extractive Industries Transparency Initiative (EITI),  the Dodd Frank Reforms Act of the USA and the European Law on Payment disclosures.

    “This raises issues of corporate transparency and corporate tax responsibility, two important issues that have engaged global attention on mechanisms to expose the enemies of resource- rich countries, including their collaborators in the host countries,” Mr Amin said.

    He was of the strong opinion that Ghana still faced serious risk with oil and mineral resources management due to the country’s inability to extend transparency to the whole extractive industries value chain.

    He said, for instance, that Ghana had no open tendering or bidding process for acquiring prospecting or exploration rights in both the oil and mining industries, adding that there is also no mandatory contract disclosure.

    Mr Amin noted that the absence of transparency in the licensing regime strengthened a perception of  “too lucrative legal benefits for firms, and that makes for mining deals to remain confidential, thus, providing opportunities for hidden benefits to companies as well as avenues for tax evasion”.

    He, however, expressed confidence in the ability of the government to change the situation and said there was an encouraging development three days ago, when President John Mahama directed the Ministers of Energy and Petroleum and Land and Natural Resources, to map out potential areas of resource accumulation.

    With this directive, he noted that the country would adopt a public auction process for licensing concessions, adding that “these directives are welcome, much more progressive and will enhance transparency and accountability in Ghana’s licensing regime”.

    He called for a framework for the implementation of these directives and also encouraged the Ministry of Energy and Petroleum to lay the new Petroleum Exploration and Production Bill before Parliament as a matter of urgency.

    The Chairman of the Parliamentary Select-Committee on Finance, Mr James Avedzi, called for the amendment of the laws on sharing of oil revenues, contending that the initial laws that allowed Ghana to take less than 15 per cent were made because the country wanted to attract companies to explore oil.

    He said once there was ample evidence that Ghana was endowed with oil and gas, new contracts must be tailored to ensure that the country raked in more revenue.

    Source: Daily Graphic

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