The Ministry of Finance and the Multi-Stakeholder Group (MSG) of the Ghana Extractive Industries Transparency Initiative (GHEITI) on Wednesday launched the country’s 2017/18 Mining and Oil/Gas EITI reports.
The mining report brings to 14, the total number published since Ghana acceded to the initiative in 2003. For oil and gas, the 2017/18 report is the 7th since the initiative was expanded to cover the sector.
The reports which were published in conformity with the 2016 EITI Standard, go beyond the mere reconciliation of payments and receipts, to include contextual information such as the summary description of the legal framework and fiscal regime, the sector’s contribution to the economy, production and export data, state participation in the extractive industries, revenue allocations, sustainability of revenues, licence registers and licence allocations.
Launching the report, the Deputy Minister for Finance, Hon. Kwaku Kwarteng said, given the strategic prominence of the minerals, oil, and gas sectors to the economy of Ghana, there is the need for a more transparent and judicious management of revenues from these strategic sectors.
According to the Deputy Minister, government is working assiduously to ensure that the revenues from the extractive resources are prudently managed and utilized for the benefit of Ghanaians.
He assured that government will continue to support and strengthen the work of governance mechanisms including Ghana EITI to provide regular information on all material revenues received by government from the extractive industry.
Commenting on the 2017/18 reports ahead of the launch, the Chief Director of the Ministry of Finance, Patrick Nomo, who also doubles as the Chair of GHEITI said “The reports this time around provide better context, with up-to-date information on developments within the two sectors, which in my view will help address Ghana’s two outstanding validation corrective actions, and lead to a more informed debate on what contributions the extractive sector is making to our nation’s development.”
He added that “the reports highlight issues regarding what policy reforms are necessary to address challenges faced by both government and industry so that the extractive enterprise becomes a win-win venture for both resource owner and investors”.
Highlighting the reports, the Co-Chair of Ghana’s EITI, Dr Steve Manteaw, stated that “While disclosures on the management and use of extractive resources are vital in fostering an informed citizens’ engagement on natural resource governance, the country’s long term objective of enhancing the development outcomes of the extractive sector will not be served if citizens do not seize upon the reports to demand accountability and the needed policy and practice change from duty bearers.”
He encouraged Ghanaians to use the findings and recommendation of the report a in their policy engagements.
The Oil and Gas companies that participated in the 2017/18 reconciliation exercise were: Ghana National Petroleum Corporation (GNPC), Tullow Ghana Ltd, Kosmos Energy Ghana, Petro SA Ghana Ltd, Eni Ghana (E&P) Ltd, Hess Ghana Ltd.
Companies such as Anadarko, Eco Atlantic, Vitol Upstream, and AGM though met the materiality threshold for inclusion in the report, failed to submit their templates, and therefore did not participate in the exercise.
A few companies were excluded from the reconciliation exercise because they did not meet the materiality threshold of $370,000 and $350,000 for 2017 and 2018 financial years respectively, during the scoping phase of the exercise.
On the government side, reporting entities whose data were reconciled with those of the companies were: Ghana Revenue Authority (GRA), GNPC, Ministry of Finance / Bank of Ghana, Petroleum Commission and Ministry of Energy.
For the mining reconciliation report, 16 companies – made up of 14 gold mining, 1 bauxite and 1 manganese were covered by in the report while the cut-off point for the mining sector reporting companies for the 2017/18 reports was GH¢2 million.
State agencies which provided data and information for the mining audit were GRA, Office of the Administrator of Stool Land (OASL), Minerals Commission, Municipal and District Assemblies within areas of operation of the mines, Ministry of Lands and Natural Resources, and Ministry of Finance.
The mining, oil and gas sectors make significant contributions to the economy of the country. Data from the Bank of Ghana on export proceeds on the mining sector declined by 3.7% from US$6.004 billion in 2017 to US$5.779 billion in 2018. The mining sector’s contribution to Ghana’s total revenues recorded a marginal increase until 2018 when it dropped from GHs2.1 billion in 2017 to GHs1.44 billion in 2018.
Gold export earnings in 2018 amounted to US$5.46 billion compared to US$5.79 billion in 2017. The decline was largely driven by a shortfall in volumes. The volume of gold exported decreased by 7.6% to 4.23 million fine ounces, while the average realised price increased by 2.1% to US$1,280.61 per fine ounce during the period.
On the other hand, total crude oil production from the three producing fields (Jubilee, TEN and Sankofa-Gye Nyame) in 2018 was 62.8 million barrels, representing an average daily oil production of 170,233 barrels, compared to 58.7 million barrels representing an average daily oil production of 160,711 barrels for the same period in 2017. This represents an increase of 6.55% and it is attributable to increased production from TEN and Sankofa-Gye Nyame fields.
Source: Kofi Ahovi//Businessweekghana.com
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