Fuel for Ghana’s development

BUSINESS ENVIRONMENT: In Africa, Ghana has one of the relatively easier business environments to operate in. In the oil and gas industry, the Petroleum Commission is the regulatory body for all upstream activities. When the commission was first formed in 2011, its leadership had very clear objectives with a strong focus on local content and its accompanying framework.
With the passage of time, there has been an expanded focus on areas such licensing, company formation and immigration-related matters, which required clarity, training and increased stakeholder engagement for all parties to be aligned.

ROLE OF OIL AND GAS: Although the services sector is the mainstay of Ghana’s economy, contributing approximately 45% to the government’s purse, the oil and gas industry is not far behind and has experienced rapid growth in the last couple of years.
The industry does, however, contribute significant amounts to tax revenue with large up-front payments being a key feature of the petroleum tax and licensing regime. This enhances government cashflow and enables key projects in other parts of the economy (agriculture and infrastructure) to be kick-started.
With regards to job creation, the industry provides an opportunity for collaboration with Ghana’s educational ministry to strengthen science, technology, engineering and math education and build a strong pipeline of talent for the near, medium and long term.

BUSINESS OPERATIONS IN OIL AND GAS: With local content matters taking centre stage, indigenous Ghanaian companies require support to build sector-specific expertise as well as financial strength. Greater access to credit, including reduced interest costs and improved speed of loan approvals, will go a long way towards creating a truly inclusive oil and gas industry.
Challenges are normal in every economy, and the oil and gas sector is no exception. Low oil prices in 2015 and 2016, and the resultant fall in investor confidence, caused significant staff redundancies and company closures.
Fortunately, oil prices have since recovered and new entrants are coming into the market, which will translate to new contracts and more job opportunities for people.

WAY FORWARD: The country needs clarity on laws and practices within the oil and gas industry, continued stakeholder engagement to ensure open communication and introduction of various technology-based tools to enhance business practices.

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