Cabinet has approved the extension of the Extractive Industries Transparency Initiative (ETTI) to cover the Oil and Gas sector, Mr Seth Tekper, a Deputy Minister of Finance and Economic
Planning has said.
He announced this in an address read for him at a two-day sensitization workshop on ETTI organized by the Ministry of Finance for Metropolitan, Municipal and District Chief Executives and representatives of the District
Assemblies at Takoradi on Saturday.
Mr Tekper said the ETTI is a governance tool aimed at improving transparency and accountability around the payments that companies in the extractive sector make to governments and the revenues that governments receive from companies.
He said ETTI seeks to improve issues on transparency and accountability in countries dependent on revenues from oil, gas and mining and to reduce the potential negative impact of mismanaged revenues by ensuring that these
revenues become an important source of long-term wealth creation that would contribute to sustainable development and poverty reduction.
Mr Tekper said, "Extending ETTI now would serve as an additional check in ensuring that the scarce resources of the country are managed in a
prudent manner".
He said poor management, weak institutional capacities and lack of transparency have accounted for the poverty, conflict and misuse of
resources associated with the oil and gas sector.
Mr Tekper said the absence of strong governance benchmarks of the continent's extractive industry was the main cause of bad resource management and the end result of this was rent-seeking rather development and growth.
He said government was not only going to enforce revenue transparency, but would also ensure that transparency existed in the entire value chain from the negotiation of contracts to issues of revenue utilization.
Mr Tekper said there was the challenge of creating a viable, integrated and diversified oil and gas industry as well as sustaining the wealth it generated without compromising environmental, social and cultural considerations and ensuring a regulatory framework that encouraged wealth
creation in a balanced manner.
He said government also is faced the challenge of deciding on the management of the oil revenues; how much should be saved and how much should be invested and how to ensure that revenue from oil and gas is distributed equally and in a way that balances and manages conflicts and concerns at the local and national levels.
Mr Tekpter said government must also decide on the form of allocation that would best promote sustainable development by focusing on poverty
alleviation.
This, he said, raised the challenge of ensuring that extractive and exploitative natural resource-based activities were integrated in community development planning in order to maximize their contribution to sustainable
livelihoods in areas where these resources were extracted.
He said: "Ensuring sound governance and stable macroeconomic environment would be essential and we must ensure that the discovery of oil does not lead to the neglect and abandonment of our traditional production and export base such as timber, cocoa, rice, maize, cassava and the like".