Africa is on the verge of oil boom in 10-15-years with 12 countries in Africa joining Nigeria, Angola and Gabon to become major oil exporters. These nations would generate $60 to $100 billion dollars to the continent. However to curb some difficulties associated with oil boom, there is the need for radical new transparency measures to allow citizens to follow incomes and expenditure of oil wealth.
This came out in a public lecture in Accra delivered by Prof. Larry Diamond a senior fellow at the Hoover Institution, a policy think tank based in the United State of America on ‘managing windfall wealth’: How Oil Resources Can Generate Development rather Than Decay’. The lecture was organized by CDD-Ghana in collaboration with Africa Center for Energy Policy (ACEP).
Professor Diamond was of the opinion that, extractive industries should publish all payments they make to governments and government officials while governments also disclose all their sources of income to the people. To reinforce transparency measures, Assets declaration of public officials should be made publicly available on the internet, he said.
‘Nigeria seems to be walking on such lines but the problem is that assets of state officials are not made known to the public. And if you do a lot of digging, you will discover that they are being kept under somebody’s desk,’ he said
He said that Instead of becoming a blessing ‘oil wealth has become a curse for almost all developing countries. Oil wealth in lower income countries is hampering economic growth and human development, increases economic volatility, degrades the quality of governance, undermines democracy and political freedom, increasing the risk and severity of civil and political violence’
The professor indicated that one way oil wealth subverts democracy is when it is made to replace original sources of income of the nation such as agriculture and taxation adding that nations like Nigeria neglected agriculture and taxation in favor of oil wealth. Without taxation of the citizens the bond between them and governments rupture giving government officials’ room to loot public resources, he said
He said that data from Mo Ibrahim index has shown that the major oil producers have the worst governance and human development performance. By contrast he said though the 15 sustained democracies in Africa none are not major oil producers they have the best governance scores on the continent.
He said oil curse is deadly for roughly 347,000 additional children of below 5 years who die in Nigeria adding that Nigeria’s less than 5 mortality rate of 12.4% is so much higher than Ghana’s 7.2%. The reason for this is that Nigeria is worse regarding corruption and governance.
He said that In order to stay clear from misusing our oil wealth the emerging major oil producing nations have a duty to manage oil wealth before the next wave of oil boom descends on Africa
Prof. said that One way of involving the people in the distribution chain of oil wealth is to adopt the oil to cash principle in which cash is distributed to citizens as done in Alaska, he suggested.
However this was disputed by some participants who suggested that cash from oil should not be distributed but should be invested in infrastructure and the building industries to create wealth and employment.
Dr Mohammed Amin Adam executive director of Africa center for energy policy, who was a discussant at the function agreed with professor diamond largely on the need to introduce measures to curb corruption and siphoning of incomes from oil wealth on the continent. However he disagreed with the Alaskan model of distributing oil wealth through cash payment to the people. He gave examples of many models of dealing with state wealth from oil but settled on investing wisely in productive ventures to benefit the people.
Professor Audrey Gadgekpo of the School of Communication Studies Legon who chaired the function said the lecture was timely. It is meant to throw light on happenings in the oil industries in Ghana and Africa. She said our hopes were high when the Kufuor administration announced our oil find in the year 2007. However unfolding events with regards to cash disbarments from oil and happening in the sub region regarding oil shows that we need to have workable fiscal system for the industry.
The function was attended by a cross section of people including members of parliament, university lecturers’ government officials and civil society actors. Dr Frank Oduro Programs Director of CDD-Ghana gave the welcome address while Professor Gyima Boadi executive director of CDD Ghana graced the occasion.
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