The Dean of the Business School, University of Cape Coast (UCC), Prof. John Gatsi, has disclosed plans by the incoming National Democratic Congress (NDC) administration to promulgate the Natural Resource Revenue Management Act.
The creation of the Act, he however, noted, will be done in consultation with the IMF given the country’s ongoing $3bn ECF programme with the Fund.
The Act according to Prof. Gatsi, will enable the incoming government to efficiently track tax revenues generated from the exploration of the country’s natural resources.
Making the assertion during the NorvanReports X Space Discussion on the topic, “Fiscal Sustainability Amid Tax Cuts and Manifesto Promises,” Prof Gatsi further noted that the Act will ensure that revenues generated are efficiently distributed to address identified issues across the country.
“I am aware that we are going to see for the very first time the natural resource revenue management act, like the way we see particular revenue management acts in other sectors like the oil sector. This is so that we can track the natural resource revenue including the taxes and have a more efficient framework developed to ensure that these revenues are distributed quite efficiently to address some of the identified issues of the country,” he averred.
“And of course, some of these things cannot be undertaken without further discussion with the IMF,” he added.
Natural resource governance experts such as Dr Steve Manteaw have long called for the creation of laws to manage revenues generated from the country’s natural resources, particularly for the mining sector.
The call for the creation of such laws is on the back of the creation of the Public Financial Management Act, 2016 (Act 921) which monitors and accounts for the flow and use of revenues generated from the country’s oil and gas industry.
The creation of the Natural Resource Revenue Management Act by the incoming government is apt, particularly in the context of the green transition and the recent discovery of green minerals such as lithium.
Meanwhile, Ghana’s management of revenues received from the oil and gas sector has been scored 85 points out of 100 by the Natural Resource Governance Institute (NRGI) in its 2021 Resource Governance Index (RGI).
The score attained by Ghana in the NRGI’s 2021 RGI compares favorably to the 51 points scored in the NRGI’s 2017 RGI, representing a 34-point score increase in oil revenue management.
The substantial improvement in the country’s index according to the NRGI stems from the adoption of the 2018 Fiscal Responsibility Act which introduced concrete numerical fiscal rules governing public expenditure, preventing unrestrained spending in times of high resource revenues.
