On 2 March, Ghana's Parliament unanimously approved the long-awaited Petroleum Revenue Management Bill. After the bill receives presidential approval, it will regulate management of money earned in Ghana's new oil production sector, significantly contributing to responsible economic stewardship of resource revenues.
The bill also has strong provisions for governance and accountability, including rigorous rules for reporting on oil fund assets and investments, and the creation of an independent regulatory body, the multistakeholder Public Interest and Accountability Committee, to monitor how oil revenues are handled.
"The passage of the Revenue Management Bill represents an extremely powerful step in Ghana's efforts to use its oil sector as an engine for development, and to avoid some of the most serious pitfalls of volatility that have plagued many oil-rich nations," said Patrick Heller, Revenue Watch legal advisor.
Revenue Watch commends Ghana's parliament for passing this bill, which will commit the nation to saving a minimum of 30 percent of its oil revenues in "Heritage and Stabilization" funds that will both protect the economy against oil price volatility and put aside earnings from this finite resource for future generations.
Under the bill, the remainder of oil revenues will not be relegated to overseas accounts, but will be invested in productive sectors of the Ghanaian economy. This could be very valuable in Ghana, which has major development needs in its infrastructure, health and education systems. In order for this money to translate into long-term domestic benefits, it must be spent prudently, in the service of coherent medium- and long-term fiscal and development plans.
RWI provided comments on earlier versions of the bill to the President's Economic Advisory Council, and organized a workshop on the bill with Ghanaian parliamentarians as they prepared to debate it.
Ghana's oil sector began production this December, and the country expects its first oil payment later this month.
LEARN MORE
- Ghana Passes Oil Bill, First Payments Due Soon (Reuters Africa)
- Revenue Watch Brief Explores Ghanaian Oil Revenue Bill
- Comments on Ghana's Petroleum Revenue Management Bill Joseph C. Bell, Patrick R.P. Heller and Antoine Heuty, August 2010 (pdf)
- Ghana Discloses Draft Proposal for Petroleum Revenue Management Bill
- Factsheet: Helping Ghana Manage Its Oil Wealth Wisely (pdf)
