The Centre for Policy Analysis (CEPA) has critcised suggestions by a section of policy makers and political groups that revenue from the emerging oil find be saved for future use and further described it as a confession of the nation's intellectual inability to manage the oil revenue.
"We would like to provoke debate by saying that banking our oil revenue is a clear confession of our intellectual inability to manage the oil revenue", the Executive Director of the CEPA Dr Joe L. S. Abbey noted.
Dr Abbey further asked "what is good for us as a nation; is it the good-fat bank balance or the prosperous future of our children"?
He made the remarks during the presentation of the center's latest publication on the nation's oil titled "Ghana: Managing the emerging oil economy" here in Accra.
He said expectations from government and the public as to how the revenue can be used to satisfy the investment needs of the country had heightened . "The public are now yearning for a growth rate of 6-7 per cent and with this emerging oil, we, the intellectuals must respond to it" he said.
To him the nation will account for the oil revenue not only in dollars or cedis but "as in using it to get this economy on a solid rock that will push the nation to a high growth path".
As a result, Dr Abbey suggested that the government should use the oil revenue to provide proper infrastructure that would support the economy and "not just to provide infrastructure that seeks to satisfy political demands".
He noted that the volatility and uncertainty of oil prices in the international market creates macro-economic instability which adversely affects growth.
"Volatility in oil prices subsequently leads to unstable public expenditure due to its direct effect on the revenue", the Executive Director said and further urged government to creat an atmosphere that will shield the public and the economy from these volatilities.
To over come these challenges Dr Abbey said "prices above the estimated long run trend should be saved in a stabilisation fund so that below price-shocks will be rebased through this fund"
On managing the oil revenue, the Executive Director was of the view that revenue from the oil sector should be used to support the non-oil sector, a move he said will help "foster broad-base, diversified and reboast the economy".
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| Dr Joe L S Abbey, Executive Director of the CEPA |
He also cautioned the government against too much concentration on the oil sector to the neglect of the non-oil areas. Such trends, he said have the tendencies to creat distress in the non-oil sector and further lead to social and economy instability in the country.
Dr Abbey further called for a balance regional development agenda with the oil revenue to prevent inhabitants in the non-oil regions from trooping to the region with the oil.
According to him demands by the Western regional chiefs for a ten per cent (10%) share of the oil revenue shows that the nation's “inclusive developmental agenda is truly not inclusive".
On mortgaging the oil for loans, Dr Abbey said "the danger of borrowing against the fund is like eating your dinner at breakfast time" adding that the nation must identify what it wants do withthe oil revenue and use it that purpose..
He said Ghana as a country has a poor record of managing revenue from natural resources and thus called for measures that will prevent it's extension to the oil sector.
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