Need To Establish A Fund For Oil Revenue

Dr. Peter Quartey, a Senior Research Fellow at the Institute of Statistics, Social and Economic Research (ISSER), yesterday called on the government to establish a special fund for revenue from the oil sector.

He explained that such a fund will ensure transparency in government's expenditure in the sector.

Dr. Quartey made the call at a lecture on the topic: "Oil and Ghana's Development: Monetary and Exchange Rate, Management with Capital Flows," jointly organised by ISSER and the Friedrich Ebert Foundation in Accra.

He said the fund can prevent the economy from inflation and other economic challenges.

Ghana discovered oil in June 2007, and the Ghana National Petroleum Company (GNPC) is anticipating that the country can produce about 120,000 barrels a day and between 800 million to three billion barrels annually.

Ghana's current oil consumption is between 40,000 to 60,000 barrels a day.

Analysing the oil production level, Dr. Quartey said if prices are pegged at 60 dollars a barrel, Ghana can earn about 1.872 billion dollars annually, stressing the need for such a fund to regulate expenditure.

"Spending cannot be avoided but revenue in the fund should be utilised in a prudent manner on agriculture and manufacturing to improve the economy."

Dr. Quartey called for domestic savings and provision of exchange rate to regulate the inflow of foreign currencies to guard against a "Dutch Disease" a situation where the inflow of foreign exchange put pressure on the exchange rate to undermine international competitiveness.

Mr. Danaa Nantogmah, Programmes Co-ordinator of Friedrich Ebert Foundation, called for a national development strategy on the Ghanaian economy to facilitate the efficient and effective management of the oil and gas revenue.

He called on the government to pay special attention to the need of a home grown national development strategy as a prerequisite for sustainable development.

Source: GNA