"Ghana government and oil buyers make progress on transparency, but more needed for accountability"

" \n A\u00a0 new report\u00a0reveals the importance of Ghana\u2019s two long-term oil sales agreements and the impact of the coronavirus pandemic on this important source of government revenue. \u00a0 GNPC has a long-term agreement, signed in 2017, to sell four cargos per year of oil from the country\u2019s TEN field to Russian trader Litasco. \n \n\n \n A second agreement, signed in 2012, obliges the state oil company to sell five cargos per year to Chinese state-owned Unipec Asia, tied to the Ghanaian government\u2019s USD 3 billion dollar loan from China Development Bank. \u00a0 In 2019, revenue from these two sales contracts equaled six percent of government revenue. These two deals alone generated 59 percent of the government\u2019s total oil revenue for 2019. \u00a0 Ghana is one of the most transparent countries in reporting on its commodity trading activities, the report concludes. \n \n\n \n Ghana National Petroleum Corporation (GNPC), the Ministry of Finance, the Bank of Ghana, the Public Interest and Accountability Committee and Ghana Extractive Industries Transparency Initiative all disclose information on the state\u2019s oil sales activities. \n \n\n \n As of the end of April 2020, GNPC had sold 73 cargos of oil, made up of 71.1 million barrels with a total value of $5.2 billion. \u00a0 In its new analysis, the Natural Resource Governance Institute (NRGI) uses these publicly available data to show the importance of GNPC\u2019s oil sales, and the need for greater accountability, as the country faces the challenge of responding to coronavirus and debt sustainability issues exacerbated by the pandemic.\u00a0 \u00a0 The coronavirus pandemic and oil price crash have hit this important source of government revenue hard, with the funds received for similarly-sized cargoes sold by GNPC dropping from $126 million in 2012 to just $12 million in April 2020. \u00a0 \u201cThe impact of the coronavirus pandemic and oil price crash on Ghana\u2019s economy means that ensuring GNPC maximizes its oil sales revenues is more important than ever,\u201d says Nafi Chinery, West Africa manager for NRGI. \n \n\n \n \u201cOil sales transparency on the part of GNPC and the government has been an important step toward enabling citizens groups to demand effective and accountable management of revenue flows. Information on Ghana\u2019s long-term sales contracts tied to resource-backed borrowing is especially important in the context of broader debt relief and renegotiation discussions,\" he added. \u00a0 The report,\u00a0 Ghana\u2019s Oil Sales: Using Commodity Trading Data for Accountability , demonstrates how these data can be used by civil society organizations (CSOs), government officials, journalists and other oversight actors to hold the government, GNPC and trading companies accountable. \n \n\n \n It also includes recommendations for the government, GNPC and commodity trading companies aimed at improving governance of the country\u2019s oil sales activities. \u00a0 The authors urge traders purchasing oil from GNPC to disclose their payments on a cargo-by-cargo basis. Two international oil traders operating in Ghana, Trafigura and Glencore, have disclosed their payments to the state. \n \n\n \n However, no company has provided payment data disaggregated by cargo, which NRGI maintains is necessary if citizens are to use this data for accountability purposes. \u00a0 \u201cCommodity traders purchasing the state\u2019s oil in Ghana should follow the example of the government and GNPC and disclose information on their purchases on a cargo-level basis,\u201d says Alexander Malden, co-author of the report. \n \n\n \n \u201cWe call on traders to disclose cargo-specific payments to GNPC using the new Extractive Industries Transparency Initiative (EITI)\u00a0 Guidance for buying companies \u00a0and relevant template in order to build citizen trust in and understanding of this often opaque activity.\u201d \u00a0 NRGI also urges the government to disclose its long-term sales contracts agreements. \n \n\n \n \u201cOur research demonstrates the importance of the government\u2019s long-term sales contracts as a source of government revenues,\u201d says Denis Gyeyir, report co-author. \n \n\n \n \u201cThe precise terms within long-term sales contracts agreements, such as those signed with Unipec Asia and Litasco, are very important in determining whether they represent a good deal for the country. We commend the government for its release of information on the terms of the agreement with Unipec Asia, but officials should disclose the long-term sales contracts with both Unipec Asia and Litasco in their entirety, and commit to disclosing any future similar agreements.\u201d \n "

"Ghana government and oil buyers make progress on transparency, but more needed for accountability"

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