Make proper use of oil wealth, Okonjo-Iweala tells Ghana

Posted by News Express | 23 February 2013 | 3,733 times

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From her vantage position as Coordinating Minister of the Economy and Finance Minister of oil-rich Nigeria, Dr. Ngozi Okonjo-Iweala yesterday cautioned Ghana to illustrate greater transparency and accountability in managing its fledgling oil industry so as to avoid the challenges associated with the harnessing of the natural resource.

“My sisterly advice is that you should be uncompromising on issues of transparency and accountability in the sector,” Okonjo-Iweala said while delivering a lecture on ‘What Africa should do to claim the 21’st Century,’ at the 2nd John A. Kufuor Global Development Series 2013 in Accra, the Ghanaian capital.

Reporting on the lecture, the Ghana News Agency (GNA) said Okonjo-Iweala advised Ghana to learn from the experience of Nigeria which prior to the discovery of oil had a well-diversified economy, with agriculture contributing about 64 per cent to Gross Domestic Product (GDP), whilst the manufacturing sector was netting five per cent.

However, “once oil came on stream, the non-oil sectors contracted, the psychology and mentality of the people changed, and a lot of entrepreneurial energy was now directed at rent-seeking activities liking chasing after government contracts rather than productive investments,” GNA quoted the internationally renowned financial expert as saying. She observed that by 2010, agriculture had shrunk to about 40 per cent of Nigeria’s GDP, and manufacturing slipped to about four per cent of GDP.

According to GNA: ‘Dr Okonjo-Iweala said Ghana’s Petroleum Revenue Management Act was praised widely since the legislation specified how petroleum revenue should be collected and allocated.

‘She however warned that temptations could set in at some level and therefore recommended policymakers and leaders to be more transparent in the negotiations of contracts.

‘They should also do their homework thoroughly before beginning contract negotiations with foreign oil firms as well as investing the oil income in public infrastructure.

‘Dr Okonjo-Iweala, who is also a former Managing Director of the World Bank Group, called on African leaders to pay close attention job creation, addressing widening inequality, building resilience against climate shocks, financing development and deepening regional integration.

‘She noted that Africans could do better if they work harder at regional and sub-regional integration stressing:

“Nigeria and Ghana can be a collective powerhouse of Africa and West Africa if we can look closely at economic ties we need to build to bind us…together.

‘ “Infrastructure is certainly key, like making the West Africa Gas Pipeline, work better. But trade is also important and we need to facilitate commerce in our sub-region, making it easier for the private sector to manufacture and sell goods in our countries.”

‘Dr Okonjo-Iweala observed that the necessary building blocks for development are finally falling in place, good economic policies, good governance, and investments in infrastructure and skills.

‘ “With these building blocks in place, we can create a platform for the private sector to grow,” she said.’

Photo: Dr. Okonjo-Iweala.

Source: News Express

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