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Ghana’s tight oil tax regime not attractive for Investors

Oil drilling platform Shengli No.4 is in the midst of shipment at the outer anchorage of a port in Yantai, east China’s Shandong province, Feb. 8, 2018. The Shengli No. 4 and the New Shengli No.1 will be sent to Nigeria for oil exploration services. (Photo by Chu Yang from CFP)

Ghana’s expectation of increased investor presence in its upstream oil and gas industry to propel exploration and development cannot be maintained in conjunction with a tight petroleum tax regime which has the potential to squeeze the profits made by multinational oil corporations operating in the sector.

Investors are mulling whether to continue operations in expensive jurisdictions, while others are seeking to avoid jurisdictions that will drain their revenues altogether as the sector remains riskier amid the ongoing energy transition. More to the point, Ghana’s oil resources are in deep-sea zones which require huge investments to engage in exploration and development.

Upstream operators such as Tullow Oil are now aggressively using their existing resources to increase their portfolio of assets instead of resorting to the international capital market to raise funds. In the recent announcement of exercising its pre-emptive rights in Kosmos Energy’s purchase of Oxy’s stakes in the Deep Water Tano Block, the company considered a purchase of stakes of $150 million from its own resources, likely due to dwindling investor sentiments over fossil fuels.

Oil Revenue Projected to Reach Over $1 billion

According to the 2022 Budget Statement, Ghana is expected to rake in total petroleum revenue of US$1.006 billion in 2022. Out of the total, participating interest from crude oil will accrue $537.61million, corporate income tax will accrue $261.13 million, royalties from crude will be $238.1 million and surface rentals $0.9 million.

Even, in 2019, when calls for disinvesting in global fossil fuel production were very minimal, crude oil revenue generated was US$947.67 million. Thus, this projection of a billion dollars is very ambitious, given the ongoing energy transition and the fact that, the country has not made any significant changes to its fiscal regime to increase the attractiveness of its upstream oil and gas sector.

This projection is compared with that projected in the 2021 budget Statement, during which the government of Ghana projected approximately US$886 million as petroleum revenue expected to be realized. This included royalties of US$201.0 million, carried and participating interest of US$524.9 million, corporate income tax of US$158.5 million and Surface Rentals of US$1.30 million.

Ms Phoebe Afful of the Petroleum Commission is cited to have said that:

“Ghana’s upstream petroleum sector presents one of the best opportunities in the sub-region to investors. Reserve replacement and investment attraction continued to remain a priority for government as part of the drive towards sustainability.

“Sustained investor attraction must focus on promotion of Ghana’s sedimentary basin, planned further licensing rounds and direct negotiations for open acreage.  We also need new policies and guidelines on local content and participation.”

Meanwhile, the ongoing energy transition from fossil fuels, continues to shrink the possibilities of sustaining a vibrant oil and gas industry, the earlier the realities are clearly seen, the better.

In fact, the fall out of the COP26 presented a grim outlook for Ghana and Africa’s hydrocarbon resources. The region’s call for its fossil fuel resources to be spared from the transition fell on deaf ears.

The region’s three point address: soliciting compensation from the West for being complicit in causing climate change; calling on the West to be the first movers in abandoning their hydrocarbon resources; and being excused from abandoning its fossil fuels were all ignored. What was clear after the COP26 was the fact that the intense pressure mounted on African economies to quickly jump on the energy transition train has not receded.

Making Upstream Oil&Gas Sector Attractive

Quite recently, Julian Popov, a Fellow of the European Climate Foundation, Chairman of the Building Performance Institute Europe, former Minister of Environment and Water of Bulgaria, in a publication indicated that the talk about gas as a transition fuel is an irony; “Gas as a transitional fuel is the primary justification for allowing countries to build gas power plants under the so-called DNSH (Do no significant harm) principle.”

Therefore, even the debate on natural gas is gradually changing. As he indicated that the role of gas in the energy transition is not that of a transitional fuel but could be better described as a fuel of last resort.

Such insinuations present major problems to countries in the African region that have vehemently underscored the use of natural gas as a fuel that will drive the future growth of their economies.

Besides, with Omicron variant spread gaining momentum across the globe, the price of oil is likely to continue on a downward curve, as countries gradually impose restrictions, thus impacting demand which has been favourable throughout the year.

The radical phenomenon of halting investments in hydrocarbons has not spared oil giants in the region. The West Africa region’s oil producer, Nigeria, experienced a decline in rig counts in November 2021 by about 38 per cent to 80 compared with 129 rig counts in the same period in 2020, even when Covid-19 affected the country’s oil production. For Nigeria, its new Petroleum Industry Act is expected to re-ignite the attractiveness of the country’s oil and gas industry.

Likewise, Senegal’s government is set to revise its petroleum fiscal regime to increase the attractiveness of its nascent oil and gas industry. Its Sangomar oil field and Greater Tortue Ahyemi (GTA) oil fields are the country’s newest discoveries in 2014 and 2015 respectively. The country intends to relax the rules of its fiscal regime to avoid a resource curse that has plagued many oil producing countries in the region.

Currently, Ghana’s average daily production of Jubilee, as of November 2021, is 74,000 barrels per day (bbld). In the same month, the Jubilee field had 642 recoverable million barrels per day (mmbbl). Since the beginning of production to November 2021, it had produced 337mmbbl of crude and 528 billion of standard cubic feet (bscf) of gas with  173 bscf of  gas exported.

The country’s fields continue to be these three: TEN, Jubilee and Sankofa fields, thus indicating that the upstream oil and gas requires new discoveries to replace the already drilled fields which are fast depleting.

However, to fast-track exploration and ensure investments are growing in the country’s upstream oil and gas industry, the country should follow the footprint of countries that are positioning themselves to attract potential investors and ramp up investment in the sector.

Source: thevaultzmag.com

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Afena-Gyan: A fitting replacement for Asamoah Gyan?

Felix Afena-Gyan

AS Roma striker, Felix Afena-Gyan, is one budding talent who is waiting to explode on the international stage following his sterling performance in his Black Stars debut in the World Cup play-off against Nigeria in March.

Based on that display, one can confidently say that he has earned a permanent spot in Coach Otto Addo’s squad heading to the Mundial in Qatar in November-December.
The 19-year-old burst onto the limelight after coming off the bench to score a brace for AS Roma against Serie A side, Genoa, to become the first player born in 2003 to score in a Serie A game.

Black Stars’ former Serbian coach, Milovan Rajevac, who was then monitoring the Sunyani-born youngster, immediately handed him an invitation to join his squad for the 2021 Africa Cup of Nations (AFCON) in Cameroun, despite previously rejecting an invitation for the World Cup qualifiers against Zimbabwe and South Africa.

Rejection of invitation

Even though he turned down the invitation to help him focus on his development under Coach Jose Mourinho, he could not resist the invitation for the World Cup playoff under stop-gap coach, Otto Addo.

The German-born gaffer gave Afena-Gyan his international debut in Kumasi in the first leg of the play-off where he effectively complemented the effort of Jordan Ayew in attack to impress the Stars coach, though he was unable to find the target.

“Felix [Afena-Gyan] did very well, created a lot of chances, made good runs, gave his all in defensive situations. He did exactly what I wanted him to do. He is just 19, wow, what a talent he is,” Addo said after the player’s debut.

It is for this reason that AS Roma manager, Jose Mourinho, places so much value on him and has rated him so high, having emerged from the juvenile league into such a phenomenal figure. But he believes he needs more time to learn to become the star for the future.

Mourinho’s impression

”Until a few months ago, he was playing on the Primavera pitch. He’s a humble boy, a boy who wants to learn. From a tactical point of view he needs simple and objective things to do that.

”He did what he had to do, he created problems for Cuadrado and also did a good job defensively.
”Unfortunately, he doesn’t have enough fuel for 90 minutes and when he came off we missed things that were too simple. He has talent, he just needs concentration,” Mourinho told DAZN in an interview.

With his imposing frame and firm control on the ball, Afena-Gyan is now likened to the Black Stars former skipper and namesake, Asamoah Gyan, who currently holds the record as the most clinical finisher in Ghana with 51 goals in 109 appearances. He is also Africa’s top scorer at the FIFA World Cup with six goals.

The same confidence was reposed in the budding goal poacher during the return leg of the playoff in Abuja and, once again, he could not register his debut goal for the country but his contribution could never be swept under the carpet, having tormented the Super Eagles rear in the entire 90 minutes he played.

Nation’s hope

In the absence of Asamoah Gyan, the onus will now rest on AS Roma forward to keep the nation’s hope alive at the FIFA World Cup as he is likely to lead the Stars’ attack.

Indeed, his rapid rise to fame seems to baffle many, having emerged straight from an amateur club in Berekum straight to the European top flight just within a year.

A student of Berekum Senior High School, Afena-Gyan was first spotted by scouts while playing in the regional inter-school sports competition where he excelled as a midfielder.

He was quickly shipped to Italy from EurAfrica FC where he went on trials with a number of teams until Roma’s junior side eventually picked him and converted him into a striker.

After impressing in a few matches in the Italian youth league, Primavera, the attacker caught the eyes of first team coach, Jose Mourinho, who invited him to start training with the senior team.

He made his senior team debut on October 27, 2021 against Cagliari, and on November 21, he came off the bench to score twice against Genoa in the Serie A which compelled Mourinho to honour his promise of buying him an €800 shoes.

Source: Graphic Online

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Human Trafficking: A Canker Deriding, Painting The Culture Of The Lively People Black

File Photo

The Ghanaian people are widely known and recognized as peaceful, loving and amazingly hospitable people, with great and pleasing family values.

But what is their taste, fight and eagerness towards the eradication of human trafficking especially child trafficking towards the poor and vulnerable children?

Ghanaians thought that after the elimination of slavery, the country would be free from forced labour and exploitation.

This seems to be an illusion since a new form of slavery has emerged in the form of child trafficking.

Human Trafficking, also known as trafficking in persons is the recruitment, transportation, transferring, harbouring, trading or receipt of persons for the purpose of exploitation within and across national borders.

The perpetrators use threat, force or other forms of coercion, abduction, fraud, deception, the abuse of power or exploitation of vulnerability consent giving or receiving payments and benefits to achieve consent.

The definition of child was listed in 1989 U.N. Convention on the Rights of the Child which states, “a child means every human being below the age of 18 years, unless, under the law applicable to the child, majority is attained earlier.”

The distinction outlined in this definition is important; because some countries have chosen to set the “age of majority” lower than 18, thus influencing exactly what legally constitutes child trafficking.

Though statistics regarding the magnitude of child trafficking are difficult to obtain, the International Labour Organization (ILO) estimated that 1.2 million children are trafficked each year.

In 2012 the United Nations Office on Drugs and Crime (UNODC) reported that the percentage of child trafficking victims had risen in a three year span, thus, from 20 percent to 27 percent.

Human trafficking is a global challenge affecting people of all ages including children It is estimated that about 1,000,000 people are trafficked each year globally and that between 20,000 and 50,000 are trafficked into the United States.

Every year 30,000 children are taken around the world and sold by human traffickers as slaves.

Over 17,000 of those children were sent to the United States, representing 46 children per day.

In 2014, research conducted by the Anti-human Trafficking Organization Thorn reported that, internet sites like Craigslist were often used as crucial tools for conducting businesses within the industry and that 70 percent of child sex trafficking survivors surveyed, some were at a point sold online.

The trafficking of children has been internationally recognized as a serious crime  which has human rights implications.

Yet, it is only within the past decade that the prevalence and ramifications of the practice have risen to international prominence, due to  increase in research and public action. A variety of potential solutions have accordingly been suggested and implemented, which could be categorized as four types of action: broad protection, prevention, law enforcement, and victim assistance.

The main international documents currently dealing with the trafficking of children are the 1989 U.N. Convention on the Rights of the Child, the 1999 I.L.O. Worst Forms of Child Labour Convention and the 2000 U.N. Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children.

Ghana is one of the fastest developing countries in the Sub-Saharan Africa who cannot  only boast of a vast wealth in terms of natural resources but also good infrastructure both physically and technologically.

In spite of these developments, Ghana still lack behind when it comes to dealing with issues of Child Trafficking especially on the Volta Lake.

According to the statistics of Child Trafficking in Ghana, out of 187 territories and countries, Ghana was ranked at tier 2 in the watch list countries. The 2017 report named “Enhancing Criminal Accountability and Addressing Challengers in Prosecution Efforts,” was a report that sought to come up with solutions that will be effective in ending human slavery in the world.

In June 2009, the United States of America (USA) Department of Trafficking in Persons Report released a full document which states that at least 30,000 children were working as porters, fishermen and others primarily being use for sexual tourism.

The Volta Lake which was created in 1960, was currently the number one source of employment and aquatic food within its surrounded regions and beyond. With the increasing reduction of fish catch in the regions, most parents who live below poverty levels in the region always see the reason to have multiple jobs and due to that they substitute their children into fishing business.

Children are involved in almost every aspect of fishing on Lake Volta. Children produce and maintain equipment and gear including boats, traps and nets. They set and collect traps, and go out onto the lake in boats, rowing, bailing water, and reeling and casting nets. They are often made to dive to the bottom of the lake to free trapped nets, which is the most dangerous task, with a high risk of drowning. 

In the 2016 report of “Our partners the International Justice Mission (IJM),” it found out that, more than half of the children working on southern Lake Volta’s waters were likely trafficked into forced labour and that the majority of them were ten years or younger.

However, the same study found out that these children often had contractual agreements for their exploitation, which were frequently between the trafficker and the child’s parents or guardian; demonstrating the real complexity of the child labour. 

The study also revealed that traffickers then typically control children through intimidation, violence and limiting access to food; and sometimes kept older boys in their employment through sexual rewards and marriage. These control tactics rendered girls in the fishing industry vulnerable to multiple forms of victimisation and violence. These young victims are routinely malnourished and suffering from untreated illness – on top of the constant risk of drowning. 

Due to cheap labour, children were trafficked at tender age into fishing on the lake for their tinny bodies as they could reach places older fishermen could not.

Another crucial cause of Child Trafficking in Ghana is how lot of families would be freely and willingly given their children to join hard labour to learn manual jobs through apprenticeship. This has contributed to the rise in Child Trafficking cases in the country.

The Article 28 of the 1992 Constitution of Ghana, stipulates that special provision should be made by Parliament to ensure that every child has the same measure of special care, assistance and maintenance as its necessary for its development, a child shall not be subjected to torture or other cruel, inhuman or degrading treatment or punishment. No child shall be deprived by any other person of medical treatment, education or any other social or economic benefit.

The Children’s Act 1998 (ACT 560) also makes provisions for the human and legal rights of Children.

The issue boils down to public education, for most people living at rural areas and deprived communities were not aware of how dreadful and cruel the act is. The act has become a norm to them, because they are living with that for a long time, for that matter they do not see the criminal and inhuman aspect of it.

To effectively solve the problem of Child Trafficking in Ghana, all concerned stakeholders needed to be made aware of the causes of the act.

Also, areas noted for such practices should be subjected to scrutiny at this time and thereafter. Interim measures should be put in place to regulate and check activities which were leading factors to the menace.

For instance, fishing with children on the Volta Lake must be prohibited and catching fingerlings should be discouraged at all cost as it will see children involved in this activities significantly reduced.

The Children’s Act 1998(ACT560) also made provisions for the legal and human rights of Children. Section 16 ; A District Assembly shall protect the welfare and promote the rights of children within its area of authority.

Again, there was the need to educate society on the hazards of Child Trafficking and child labour. Parents and guardians should be advised to educate their children instead of involving them in Child Trafficking and child labour. Constant awareness and education will help awaken them about the dangers and effects of the act.

Section 6 provides that, no parent shall deprive a child his or her welfare whether the parents of the child are married or not at the time of the child’s birth; or the parent of the child continue to live or not every child has the right to dignity, respect, leisure, liberty, health, education and shelter from his parents.

Section 12 , provides that no person shall subject a child to exploitative labour as provided under section 87 of this Act.

Moreover, one of the urgent steps that needed to be taken by the government is formulating and implementation of effective Child Trafficking task force. With such institution in place with well financed equipments, proper checks and regulations could be done in other to help deal with the issue.

When effective policies are rollout to ensure that there are strict enforcement of the law with an enforcement agency set independently, it will help combat the menace and bring those involved to book.

Child Trafficking in Ghana can be curbed if the right measures and goodwill from all the concerned stakeholders come to play.

As a Nation there is the need to stamp out feet on critical issues of such caliber and take firm decisions without fear or favour to help combat the act of inhuman towards poor children.

By Philip Teye Agbove

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Nana Ayew Afriye writes: Political Speaker not above Parliamentary practice

Nana Ayew Afriye

Mr. Speaker, it is shameful for you to attack the president & judiciary based on emotions and without recourse to extensive research on parliamentary practices elsewhere. Ghana is a member of the CPA( Commonwealth Parliamentary Association). However, all over the commonwealth of which Ghana is a member, I came across a very interesting trend. In this write up I chose a few examples base on continental/ regional location. In;

1.Australia, the speaker is an MP and has a casting vote section 44 Australian constitution saves it,

  1. Also, South africa has a speaker who is an MP with a casting vote SA constitution 41( 8)
  2. Nigeria has speaker MP and with a casting vote.Nigeria constitution 75 a (i)
  3. UK speaker Addington explained why speaker’s should have a vote especially where there is a tie in 1796.

John Bercow used casting vote to block brexit…After the tie vote of 310 each to the left and 310 to the right. In UK the speaker is an MP and has a casting vote.

  1. India also has an MP Speaker with a casting vote. India constitution Article 189
  2. Additionally in Canada, the speaker is an MP and has casting vote( ie when there is a tie). Section 49 of the constitution Act( BNA Act), 1867.

Erskine May

According to Erskine May, the foremost authority on parliamentary procedures and practices in the world, Casting vote by a speaker allows for debate to continue otherwise, a motion is stalled and parliament makes no headway.

Ghana

In Ghana at the time of voting on the e-levy bill during a division tabled by the NDC, there was obviously going to be a tie 137:137 of which the deputy speaker would have had to exercise his casting vote. However, the minority prevented the deputy speaker from doing so by shouting, it was unconstitutional. Hence, the current dispute. I am not a lawyer but the question is, who presides over disputes in a civilised society? Is it not the courts if I may ask?

As a matter of fact, the supreme Court in the wisdom of the very learned judges decided to rectify the ambiguity in the constitution by ruling for deputy speakers who are MPs(unlike the speaker) to vote. The speaker of Ghana’s Parliament says its absurd, reckless and that the president is myopic for speaking on it.

Mr Speaker, please don’t insult and let’s apply ourselves to the wisdom of common practice and precedence. If we you were guided by Erskine May, then, probably you wouldn’t have occasioned this needless write up.

I share in the pain of the deputy speakers who are MPs just as me. Unlike other jurisdictions in the commonwealth where speakers are also members of parliament and have a casting vote, Ghana’s speaker is not an MP and hence have no casting vote per Ghana’s constitution.Thus by extension, I see the ruling as Ghana applying itself to the logic of global or commonwealth parliamentary practice.

May be it’s about time we amend the constitution to vote for MP speakers who will have casting vote too. This will save the tax payers some more money as the hefty provision of emoluments for non MP speaker’s as backed by article 95(5), treat non MP speaker’s in a special category of article 71 office holders. The speaker’s benefits is way above that of an MP. This is NOT same for deputy speakers. Deputy speakers are only limited to their salaries as MPs as provided for in article 98(1) of the constitution for members of parliament.

According to the principle of equal work, and equal pay, the deputy speakers salaries and end of service benefit atleast should have been in the same category (though not at the same level) as the speaker. But this is not so. As it is by the law, deputy speakers preside ONLY over proceedings in the house and have no administrative authority unless delegated by the speaker to do so.

The power of a deputy speaker is just same as that of any MP in the chamber. The constitution envisaged MPs as representatives with a vote to define the position of their constituents on issues contrary to that of the speaker who has no representation and has neither an original or casting vote.

During the tenure of Prof Oquaye, 1st deputy speaker(s) performed some delegated administrative responsibilities when he was absent. Under the current speaker this is not so. why is this so? are the speaker’s words and deeds are gradually polarising parliament and the nation?

On Thursday 10th March (as the speaker is currently not in the Country), a certain NDC’s Kofi Attor invited me (as chairman of health committee), the ranking member on health as well as the leaders of the house to a meeting to be hosted on the speaker’s behalf by him. I registered my strong displeasure to the speaker’s office. Indeed I made it clear I wasn’t attending as I didn’t know the locus of that gentleman in the scheme of parliamentary practice. This was rectified , apologise extended, and I joined the meeting chaired by the minority leader last thursday.

The question I ask is, where were the deputy speakers? and why couldn’t any of them have represented the speaker. And so therefore, if among others, they are also denied of their only power in Parliament(ie to exercise their representative right to vote) then to me , what is really their use as deputy speakers to their constituents???

May be the council of state will have to find a way of engaging all living former speakers of Ghana’s parliament in a meeting for them to share their thoughts on this point of law in the presence of the speaker.

Finally, in the write up of the speaker on parliament official Facebook page, I came across the greeting…” Good morning comrades…”, Which people were the speaker reaching out to, his NDC comrades or the good people of Ghana. Something is very wrong. The speaker must separate his political self from the parliamentary administrative process. All previous speakers had their political inclination yet did a good job without politicising the parliamentary administrative process.

The parliamentary service is clearly under attack and soon we will not distinguish the service from the political interest of the speaker. Whatever it turns out to be, the speaker is to be blamed.”

Written by Dr. Nana Ayew Afriye, Member of Parliament for the Effiduase-Asokore Constituency.

Source: Dr. Nana Ayew Afriye

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