Ghana to adopt the Norwegian model to manage its petroleum revenue
August 06, 2010
Kofodidua (E/R), Aug. 6, GNA - Ghana is to adopt the Norwegian model which divides petroleum revenue into three pools - budget, heritage and stabilization funds.
This is contained in the Petroleum Revenue Management Bill, which is before Parliament.
Whereas the Heritage Fund will ensure intergenerational equity because of the finite nature of resource revenue which compels some governments to save windfall revenues for future generation, the Stabilization Fund would be used to mitigate volatile situations that might arise in future.
At a two day workshop organised for Members of Parliament by the Parliamentary Centre at Koforidua in the Eastern Region, Mr Atoine Heuty a representative of Revenue Watch Institute stated that money to the overall national budget would be limited.
According to him, majority of the petroleum revenue should be channeled into the Heritage and Stabilization funds because government could earn returns on them if the funds were invested in stable securities.
The workshop was to enable Members of Parliament to discuss the Petroleum Revenue Management Bill in the context of international practice and the challenges facing the Ghanaian economy.
It was also to develop a response to Ghana's Bill and make recommendations to refine the bill-making process and also to adopt the methodology of sharing international experiences that discuss trade-offs and policy options.
Mr Heuty noted that since oil and mineral revenues were not perpetual, if a country did not employ them efficiently they might never help in achieving a better development.
He said if public organs and citizens grew accustomed to large inefficient public expenditure, the decline in the petroleum production could cause a severe shock and degenerate into the "Dutch Disease".
Mr Heuty said the Dutch Disease phenomenon negatively affect an economy which could lead to a sharp inflow of oil foreign currency to the detriment of other sectors of the economy.
He said the inflows normally would lead to currency appreciation making the country's other products less price competitive on the export market.
Dr David Nguyen-Thanh of German Technical Cooperation (GTZ) noted that experience elsewhere suggested that proper and responsible management of petroleum revenue was essential for the future development of the country.
"The Bill provides the framework that will guide the collection, allocation and management of petroleum revenue for the benefit of the current and future generations," he said.
He added that the Bill addresses three specific challenges - how much of the revenue will be spent now? How much of it to be saved and the means of de-coupling government spending from the volatility of petroleum prices? How to safeguard the rest of the economy from undue exchange rate approach?
Dr Nguyen-Thanh said the idea was to make sure that management of petroleum revenue was based on sound sustainable fiscal policies because resources were finite.
He said the Bill conforms to international good practice such as assigning clear roles and responsibilities to relevant stakeholders involved, and setting out clear quantitative rules to guide the inflow of petroleum receipts.
Dr Nguyen-Thanh said the Bill clearly defines conditions under which savings of the revenue could be withdrawn and be used for annual spending through the budget.
In addition, he said, the Bill has incorporated checks and balances and provisions to ensure transparency, effective oversight and accountability.
He said the aspect of the Bill that received much discussion was the issue of how much revenue receipts to be allocated for annual budget, adding that some have supported voting a high share of the revenue now, because of the huge investment the country needs.
Dr Nguyen-Thanh said others have also argued that it was wise to spread spending over time to avoid adverse macro-economic effects today because of limited absorptive capacity and to ensure inter-generational balance use of the fund.
Referring to a research document on Ghana's oil revenue, he said: "if Ghana would wants to strike a meaningful balance between today and future generation's interest, one would have to settle with a rate of 60 percent or less of the oil revenue that will be allocated straight for the Consolidated Fund."
Mr Albert Kan-Dapaah Chairman of Parliamentary Select Committee on Public Account said oil and gas revenues must be watched and managed properly for the benefit of all Ghanaians.
GNA
Labels: GHANA, NORWAY, OIL, PETROLEUM REVENUE MANAGEMENT BILL (GHANA), TAXATION, WINDFALL TAX
Read more...
Keep govt accountable, urges Norwegian minister
By Ernest Chanda
Thu 25 Feb. 2010, 04:02 CAT
VISITING Norwegian state secretary for development cooperation Ingrid Fiskaa has called on Zambians to keep the government accountable over the use of public funds. And Auditor General Anna Chifungula has said her office will not be discouraged if no action is taken to probe culprits mentioned in the annual reports.
In an interview after visiting the Auditor General's office in Lusaka on Tuesday, Fiskaa said corruption was a general problem where no one should give up.
Fiskaa, who was on a two-day tour of some Norway-funded projects in the country, said corruption was one sad way in which the rich enrich themselves more and become more powerful.
“First of all, I would like to say that I'm very much encouraged to see or to hear about all the good work being done in the Auditor General's office.
And I think this is a good example of cooperation between two countries, where we have cooperation between the Norwegian Auditor General's office and the Zambian Auditor General's office,” Fiskaa said.
“And in my view, these are the results. One example is public attention to those cases of possible corruption. And I think it's very important also that people of Zambia really keep the government and public authorities responsible and accountable for the use of public funds.
And we know that the fight against corruption is in every society, in every country; it's an international phenomenon and it's also in my country, Norway.
So, this is a general problem we cannot give up until we have reached our goal of no corruption because also we know that corruption is the way that the people who are already powerful, already rich enrich themselves even more and become even more powerful.
This has an international perspective as well. We know that we have damaging international economic structures that facilitate corruption in countries like Zambia, but in all other countries as well.
We would like to fight corruption also on an international level, I'm thinking of the fight against tax evasion and bank secrecy internationally.”
When asked for her opinion on the Zambian public’s demand that the office of the Auditor General be empowered to prosecute cases of abuse of public resources when they are discovered, Fiskaa supported the idea and said people should debate it.
“That's a proposal that Zambian authorities should take seriously and to consider that proposal. But of course this is not something that I can decide on, so it's a matter of the Zambian authorities to decide on this,” she said. “But I'm sure that organisations and people and civil society organisations will push for this proposal.”
And after inspecting farming projects under Conservation Farming Unit in Kafue's Shimabala area on Monday, Fiskaa observed that there was still less food produced than needed worldwide.
“It is encouraging to see that women are in the lead here. This is a good example of what can be done in the sense of empowering women. Food is unequally shared in the world, there is less food produced than needed worldwide,” said Fiskaa.
And Chifungula has vowed to keep on pushing with the fight against abuse of public resources.
In an interview when Fiskaa visited her office yesterday, Chifungula said the current investigations into the purchase of police motor vehicles were encouraging.
“If I got frustrated then I would actually give up, isn't it? But I don't get frustrated. I keep on pushing and pushing. I'm sure you are beginning to see the results, some of them you are seeing them.
There's action being taken. For instance in our 2007 report, we reported about the importation of those motor vehicles by the Ministry of Home Affairs through Zambia Police. You have been reading about it, action is being taken,” Chifungula said.
“There are people that maybe I can't cite right now, but there's quite a lot of action being taken. One thing that our audits, especially now that we have gone into other areas as well, other parts of Zambia, is that people now because they know that you are there there's that element of fear for public funds. So I can confidently say that there has been a reduction in the number of cases of abuses that we have reported.”
Chifungula said whatever dissatisfactions were there in operations, her office would not be discouraged in any way.
“Remember we have also extended our audit coverage. It is now quite expensive, last time we would audit maybe five, six government ministries and then report. But now we are reporting on almost all of them.
So the coverage is much larger, which means there's a great improvement because if it was as bad as last time, you would have seen actually our reports even being extremely bulky. But there's such a reduction and we are proud of that, but not entirely satisfied,” said Chifungula.
Labels: ANNA CHIFUNGULA, AUDITOR GENERAL, INGRID FISKAA, NORWAY, TRANSPARANCY
Read more...
‘It’s wrong to label anyone who speaks about people’s welfare a ‘politician’’
By Agness Changala
Mon 01 Feb. 2010, 04:00 CAT
NORWEIGIAN Church Aid (NCA) programmes manager Margaret Machila has said it is wrong to label anyone who speaks about people's welfare a 'politician'. In an interview, Machila said many things were political and people should be left to comment on what they felt should be commented on.
“The road to my house is political, many things are political. What isn't political? Why should they say Margaret should comment about this and not that?” she asked. “I should comment on anything. It's my right and I don't want to be put in a corner.”
Machila said people should also be allowed to be angry because it's their right to do so.
“It's your right but it should not overshadow the core business of the agenda,” she said.
And Machila has advised those in government to stop making laws that will work against them when they leave office. She said those in office today should not forget that they would be out tomorrow and even join the Civil Society Organisations (CSOs).
She said governors should not make laws that they themselves would not want to be subjected to.
“Those in the government now must be careful because the same laws they are making now to frustrate others will work against them,” she said.
Machila said instead of coming up with laws like the Non-Governmental Organisations (NGO) Act to frustrate NGOs, the government should provide an enabling environment for them to go where it did not reach to deliver social services.
Machila advised the government not to see NGOs as enemies with intentions of taking over the government but as partners to developing the nation.
She also charged that the NGO Act was meant to shrink the political space for NGO activities.
Machila said the government brought about the NGO Act because it did not want to be checked on and subsequently get away with certain things they did wrong.
“The government knows that this eve of elections, CSOs' actions are going to every corner through citizen education but we want it government to be facilitative and not inhibitive,” Machila said. “Here, all they want to do is they want NGOs to be getting permission, become limited in their actions.”
Machila has since called for more constructive engagement with the state.
“And the control in my view is between now and when they put that Act in place. After campaigns and elections are over, you hear nobody will talk about the NGO Act,” said Machila.
Labels: MARGARET MACHILA, NORWAY
Read more...
Norway demands removal of ZAWA director
Written by Chibaula Silwamba and Margaret Habbuno
Friday, June 12, 2009 8:39:11
NORWAY has demanded that the Zambian government removes ZAWA director general Dr Lewis Saiwana from his position following audit revelations that he allowed Tomorrow Investments to undertake road construction projects failure to which they will maintain their suspension of aid to the institution. And Norwegian Ambassador to Zambia Tore Gjos could neither confirm nor deny the matter.
Meanwhile, Ambassador Gjos expressed concern at the mismanagement of funds in ZAWA but indicated that the embassy would continue discussing with the Zambian government on possible continued support to the wildlife sector.
Well-placed government sources revealed that the Norwegian government had given conditions, which the Zambian government should fulfill, in order for that government to resume its financial aid to the Zambia Wildlife Authority (ZAWA).
The sources said one of the conditions was that the Zambian government must remove Dr Saiwana from his position because he allowed Tomorrow Investments to be awarded the Chisengu-Mfuwe and Mfuwe-Chilongozi roads construction project in Mfuwe, Eastern Province when in fact it was clear before the contract was awarded that the firm could not complete the projects due to lack of the required manpower, equipment and know-how.
"It's clear Mr Saiwana is going. The Norwegians have put their foot down saying he must go because he caused NORAD to lose a lot of money through that irregular contract which was given to Tomorrow Investments. From the look of things, it seems the Zambian government has no option on this one because if it does not remove him then NORAD will completely pull out and it seems the government is not ready to lose that support from the Norwegians," the source said.
"As the minister [of tourism Catherine Namugala] put it - the Norwegians are indeed very upset. They are not happy with this [Tomorrow Investments] deal and they have suspended their financial support to ZAWA. As you know NORAD [Norwegian Agency for Development Co-operation] and Germany-Frankfort Zoological Society are some of the key financiers to ZAWA. So, if NORAD pulls out then a lot is at stake because the government considers tourism as one of the priority sectors to drive the economy forward and the roads in question lead to South Luangwa National Park, so you can imagine why the government is also upset about Mr Saiwana's conduct."
The sources said the Zambian government had acknowledged that Dr Saiwana erred when he overruled the negotiating committee's misgivings on Tomorrow Investments' capacity and went ahead to sign a contract with the firm, ignoring all the irregularities that were pointed out.
When contacted for comment, Ambassador Gjos said his dialogue with the Zambian government was in closed-door.
"I will not give any comment on an issue like that. I will not discuss my dialogue with the [Zambian] government in the newspapers. I hope that you appreciate that," Ambassador Gjos said.
Further asked on reports that his government had demanded that the Zambian government should remove Dr Saiwana over his conduct in the Tomorrow Investments saga, if the Norwegian government was to resume its support to ZAWA, Ambassador Gjos could neither confirm nor deny the reports.
"What I said is that I will not give any comment on that issue in the newspaper. As I have said, I will not have dialogue with the government in the newspaper whether it's Post or anyone else," Ambassador Gjos said.
During the signing ceremony of the second phase of Norwegian support valued at US $8 million [about K40.4 billion] for a five-year-period to Community Markets for Conservation (COMACO) Ambassador Gjos expressed concern at the mismanagement of funds in ZAWA.
"There has been an issue of mismanagement of funds within ZAWA but we have been assured by the government that action will be taken to correct past mistakes. Hence we will continue to discuss the possible continued support to the Zambian wildlife sector with the government. This is an important sector for Zambia and we all agree that it has clearly not reached its full potential," said Ambassador Gjos.
"For the Norwegian Embassy, 2009 marks the end of nearly 25 years of support to South Luangwa National Park, a long standing partnership that will be celebrated later this year."
The Norwegian government commissioned a forensic audit on NORAD-funded Chisengu-Mfuwe and Mfuwe-Chilongozi roads, which revealed several irregularities in ZAWA's awarding of the contract to Tomorrow Investments.
The Norwegian Embassy submitted the report to the Zambian Ministry of Finance and National Planning, which subsequently reported Dr Saiwana, his management and former head of procurement Bwalya Selemani to the Anti Corruption Commission (ACC) for investigations.
According to the forensic audit report dated March 18, 2009, Dr Saiwana had ignored several recommendations by the negotiating committee, which had observed that Tomorrow Investments had no capacity to work on the two roads.
"Contract was executed by the director general ZAWA [Dr Saiwana] with all the irregularities mentioned in the interim report," the report revealed.
"The DG [Dr Saiwana] has to take responsibility with possible action of breach of fiduciary duty. ZAWA has to investigate the employment contract of the DG and charge him for gross negligence for the loss incurred by the statutory body due to his negligent acts. Internal disciplinary procedures should be provided for that."
The audit report recommended that the Norwegian embassy investigates Dr Saiwana and Selemani for breaching the ZAWA-NORAD agreement when they awarded a road contract to Tomorrow Investments without the consent of NORAD.
The report recommended criminal prosecution of Tomorrow Investments for obtaining pecuniary advantage by false pretense and that the ACC investigates the company managing director Augustine Katotobwe.
"List of plant and equipment provided by Tomorrow Investments incorrect, falsely stated that the contractor owns them. The only equipment owned by the contractor is a 10-tonne tipper truck. Evidence: letter from [Road Development Agency] RDA dated 19th January, 2007," the report revealed.
"Based on the facts and observations, ZAWA did not use the funds provided by the [Norwegian] Embassy for the intended purpose and according there is no assets. We, therefore, are of the view that ZAWA should refund the funds disbursed by the Embassy in connection with this contract. The refund should comprise both funds disbursed to the contractor and undisbursed in the bank account."
Tourism minister Catherine Namugala on Tuesday revealed that the Norwegian government was upset over ZAWA's payment of K1.4 billion to Tomorrow Investments, which had no capacity to construct roads in Mfuwe in Eastern Province.
On January 5, 2008 then president Levy Mwanawasa issued a decree using his presidential powers to blacklist Tomorrow Investments over its failure to complete the construction of the Chisengu-Mfuwe road and many other projects around the country.
Labels: CORRUPTION, DONORS, LEWIS SAIWANA, NORWAY, TOMORROW INVESTMENTS, TORE GJOS, ZAWA
Read more...
Norway suspends aid to ZAWA
Written by Chibaula Silwamba
Thursday, June 11, 2009 12:36:18 PM
TOURISM minister Catherine Namugala has revealed that the Norwegian government is extremely upset over
ZAWA’s payment of K1.4 billion to Tomorrow Investments, which has
no capacity to construct roads in Mfuwe in Eastern Province.
And well-placed sources have revealed that the Norwegian government has since suspended its financial aid to Zambia Wildlife Authority (ZAWA) because of the road construction scandal.
Commenting on revelations that the Ministry of Finance and National Planning had reported ZAWA director general Dr Lewis Saiwana, his management and former head of procurement Bwalya Selemani to the Anti Corruption Commission (ACC) for investigations over the alleged irregular awarding of a road construction contract in Mfuwe to Tomorrow Investments, Namugala vowed to ensure that all the officers that would be found wanting in the scandal were prosecuted.
"Yes, the Norwegians have written and they have indicated that they are unhappy about it and they have reason to be unhappy about it because yes our officials mishandled the contract with Tomorrow Investments. They have written to us and we have in turn asked ZAWA to explain and they have given us explanation," said Namugala in an interview.
"But as things stand, yes the Norwegians have the right to be upset because it's their money and they are assisting us so that we can assist our people to reduce the poverty levels."
Asked about reports that the Norwegian government had withheld funding to ZAWA because of this scandal, Namugala responded:
"We are still talking to the Norwegians, they have basically said, 'look, the K1.4 billion we are not happy that ZAWA gave the money to Tomorrow Investments and Tomorrow Investments have not shown capacity and therefore we are unhappy'. Yes, they are unhappy. They have indicated that and we need to talk more. We have communicated with them, we are still talking."
She said Norway had not withdrawn funding but had expressed discomfort over the Tomorrow Investments saga and discussions were ongoing to persuade them to continue financing ZAWA.
"I have told the Norwegian saying, 'look this is something we can resolve between yourselves and us'," Namugala said. "Yes it's true that there was a problem with Tomorrow Investments and that president [Levy] Mwanawasa had instructed the Zambia Wildlife Authority to terminate the contract with Tomorrow Investments. But by the time the president was giving that instruction the contract had actually already been terminated."
She observed that money was paid to Tomorrow Investments without the company showing capacity to do the job.
"Although it happened before I came to this ministry I want to see to it that this kind of thing does not happen while I am here or even after. I strongly feel that the country needs to have money properly spent," she said. "I am quite concerned myself as minister about the level of negligence on the part of officials whether in government and even in statutory institutions when it comes to public resources. I want to ensure that as much as possible, there is accountability on the part of civil servants and those working in statutory institutions."
Namugala said she had meetings with ZAWA management and assured the donors that this mistake would not recur.
"The Norwegians are some of our faithful partners especially for South Luangwa National Park; they have done a lot in the management of the park and South Luangwa National Park is one of the best parks in Zambia and therefore, for us, we value partnership between the Norwegian government and ourselves and we will not allow this situation to sour our relationship. If the officers did anything criminal, we will ensure that the law takes its course," said Namugala.
"ZAWA has also said three officers were arrested before in connection with Tomorrow Investments' contract, they were even charged but for some reasons they have not been taken to court so I have told ZAWA to follow up and give me a reason why the police have not taken the officials to court."
Labels: CATHERINE NAMUGALA, CORRUPTION, DONORS, NORWAY, ZAWA
Read more...
Gjos urges Zambians to use resources effectively
By Pride Bwalya in Monze
Thursday April 24, 2008 [04:00]
THE Zambian government and its people must ensure effective management of resources for the country's economic development, Norwegian Ambassador Tore Gjos has advised. Ambassador Gjos, during a courtesy call on Monze district commissioner Joyce Nondo, said Zambia had enough resources that could be used for various projects especially in the development of education and health sectors in rural areas. He commended the government over the new tax regime for the mines, which took effect on April 1, 2008, saying the revenue raised could benefit and improve the lives of Zambians.
Ambassador Gjos said the government should be encouraged to ensure that local resources were put to good use for the country's economic development. He further urged the government to get rid of bad governance and corruption in order to achieve a meaningful flow of development countrywide.
He said poor governance and corruption should be fought at all levels to ensure sustainable development.
Ambassador Gjos, who toured Kasaka, St. Patrick, Chidamba and Munjele schools that were constructed and rehabilitated by Matantala Rural Integrated Enterprise Project in Monze and Mazabuka with funding from the Norwegian government, said he was impressed with the difference the little funds donated by the Norwegian government had made.
He noted that a good number of schools had been rehabilitated and new ones constructed.
Ambassador Gjos said the government must consider using the Matantala Rural Integrated Project as a best case pilot project and replicate it to other parts of the country to ensure significant development.
And Nondo said the Matantala project had contributed effectively to sensitisation and capacity building in terms of community mobilisation of resources and involvement in development.
Nondo said since inception in Monze, the project had brought about positive impact on community members by improving their livelihood through hard work.
She said community members were able to assess themselves and determine their areas of need in terms of development.
Nondo thanked the Norwegian government for funding the project because it played a crucial role in the development of education and health sectors.
Labels: NATURAL RESOURCES, NORWAY, TORE GJOS
Read more...
