Lauren Pfeifer, ONE’s Transparency and Accountability Research Assistant, shares Ngozi Okonjo-Iweala’s call for transparency and accountability mechanisms in the oil industry of Ghana.
Renowned Nigerian economist and member of ONE’s Board of Directors Ngozi Okonjo-Iweala advised Ghana on the importance of building transparency and accountability mechanisms into the DNA of its fledgling oil industry. Speaking at the John A.Kufuor Global Development Series in Accra last Friday, Okonjo-Iweala said, “My sisterly advice is that you should be uncompromising on issues of transparency and accountability in the sector.” By building transparency and accountability mechanisms into the sector, Okonjo-Iweala hopes Ghana can avoid the pitfalls of a sudden influx of revenues from natural resources.
Ngozi Okonjo-Iweala at the John A.Kufuor Global Development Series in Accra. Photo credit: www.guardian.co.uk
Currently serving her second term as Finance Minister of Nigeria, Okonjo-Iweala cautioned Ghanaians Friday to the subtle shifts that she witnessed after Nigeria began exporting oil. After the discovery of oil in Nigeria, its well-diversified economy shifted, non-oil sectors contracted, and an entrepreneurial spirit was sapped as energies were shifted to “chasing government contracts, rather than productive investment,” she said.
Ghana’s Petroleum Revenue Management Act has been widely praised because the legislation specifies how petroleum revenue should be collected and allocated. Okonjo-Iweala implored policymakers and leaders to strengthen it further by institutionalizing transparency in contract negotiations. She encouraged the Ghanaian government to prepare thoroughly before entering into negotiations with foreign oil companies and to invest the profits in public infrastructure.
Okonjo-Iweala also stressed the importance of regional cooperation, especially with regard to infrastructure and trade. She noted that several key building blocks for development – good economic policies, good governance, and investment in infrastructure and skills – are falling into place, making the time ripe for regional development. “With these building blocks in place,” she said, “we can create a platform for the private sector to grow.”
The discovery of Ghana’s oil reserves in 2007 – now known as the Jubilee Field – is estimated at between 800 million to 1.8 billion barrels, and is expected to generate over $1 billion yearly in export revenue over the next 20 years. The new oil wealth has the potential to provide Ghana with the revenue needed to drive development and reduce poverty.