"Ghana's Natural Resource Funds Well-Governed" - RWI
The natural resource fund that the Ghanaian government used to manage oil revenues are relatively well-governed, a non-governmental organization has stated.
The Revenue Watch Institute, a New York-based NGO with an office in Accra, has released research indicating that the Ghana Petroleum Funds met 13 out of 16 good governance fundamentals.
A Statement from the Revenue Watch Institute signed by Lee Bailey, Director of Communications and copied to the GNA on Thursday said researchers concluded that the funds feature clear deposit, withdrawal and investment rules, effective oversight, and other essential attributes of good governance.
“Together, the Ghana Stabilization Fund and the Ghana Heritage Fund manage more than US$450 million,” said Emmanuel Kuyole, Africa regional coordinator for Revenue Watch. “Thanks to strong legal provisions, citizens have information on how much is deposited, invested and earned. This transparency is a significant gain. Too much sunshine does not spoil anything.”
The statement, however, said researchers found that there was room for improvement. The case study of Ghana indicated that as of early 2013, when the period of study concluded, there were still problems in terms of public disclosure of external audits and the detailed responsibilities of fund managers and staff.
In response to the report, representatives of the country’s Ministry of Finance announced that the government had already engaged international accountancy firm Ernst & Young to conduct an external audit of the funds.
Revenue Watch's economic analyst Andrew Bauer also suggested that the government used un-saved revenues for investment rather than consumption. This comes at a time when Ghana faces volatility in its non-oil revenues and increasing deficit and national debt levels, Bauer has explained in the statement.
“Ghana’s good management of its saved funds demonstrates compliance with the provisions of the Petroleum Revenue Management Act,” said Bauer. “This must also extend to the act’s requirement that revenues be spent in line with a national development plan, to ensure maximum efficiency.”
“It is one thing to have a strong law, but another to execute it,” said Amoako-Tuffuor of ACET Africa. “Ghana must avoid selective implementation which undermines credibility. Full implementation requires political commitment, diligence of public officials, and a public desire to see the law fully implemented.”
The Revenue Watch study noted that natural resource funds are an increasingly popular subset of sovereign wealth funds, and in principle they serve a variety of purposes: expenditure smoothing, savings of resource revenues, earmarking money for development, “sterilizing” of revenues to avoid adverse macroeconomic impacts, and protection from corruption.
The Revenue Watch study detailed six key steps that countries can take to ensure accountability and transparency, including the establishment of fiscal rules, the elaboration of investment rules, and strategies for the creation of strong oversight bodies. – GNA