Kumasi — Ghana has identified oil in commercial quantities. Commercial drilling is yet to start. The economy is yet to take off with greater momentum. Perhaps, it is now the greatest time to be alive if you are Ghanaian.

We stand on the threshold of becoming one of the fastest emerging economies in the sub-Saharan Africa. However, this will not role on the wheels of inevitability. The oil is like the knife that can either serve us or sever us depending where one holds it. If we hold the oil by the handle we can use it. If we hold the knife by the metal part it would injure us as it has done to some countries like Nigeria, Angola, Iraq and Sudan.

The economic record of mineral-exporting countries has generally been disappointing. Oil exporters, in particular, have done far less well than resource-poor countries over the past few decades, especially when one considers the big revenue gains to the oil-exporting countries since 1973, when oil prices soared. Why is this the case? Perhaps it is because of the way oil economies are run. Managing oil revenues well is much the same as managing any budget well, but some issues are more important for oil exporters. These include how much to save for future generations, how to achieve economic stability in the face of uncertain and widely fluctuating oil revenues and avoid "boom-bust" cycles, and how to ensure that spending is of high quality, whether in the form of large investment projects, public consumption, or subsidies.

The prescriptions for tackling these challenges are straightforward enough in theory. But they often confront the reality of opaque, highly politicized fiscal systems that lack the checks and balances needed to ensure that resources are well employed and to provide the fiscal flexibility needed to adjust spending in line with changes in resources. In extreme cases, when a government remains in power only because of oil money, no fiscal adjustment will be possible unless forced by a crisis.

Ghana has taken the bitter lessons from failed oil states and has vowed not to be used as subject of history when it comes to resources curse nations. Last week Ghana hosted the Ghana Oil and Gas Conference. It sought to take preventive measures to avoid been severed by the oil resources.

FUTURE GENERATION FUND

Last week the participants at the Oil and Gas Conference talked about the creation of the Future Generation Fund whereby a percentage of Ghana's direct oil revenues (dividends and royalties) are placed in trust for future generations. This is brilliant idea. There should be a legislation to protect the fund from governmental abuse.

NATIONAL STABILIZATION FUND

Oil prices are like the sinusoidal curve-at one cycle it is up and at other cycle it is down. This means that government cannot trust that revenue can be 'going concern'. To achieve this stabilization fund is set up to save part of the revenue as stabilization fund. When the price is high it means that the stabilization portion is high. The converse is true. So in times of short falls of oil revenue the stabilization is injected into the economy to keep it buoyant.

PRIORITY SECTORS DEVELOPMENT

Oil revenue is not for the payment of salaries for government workers. Government should be able to run its budget as if there is nothing like the revenue oil. The revenue should be used to develop the priority sectors of the economy namely education, health and social services, rural development, infrastructure and environmental and water resource management and finally poverty reduction.

SCIENCE AND TECHNOLOGY FUND

In the past the strength of a nation depended on the number of its natural resources and the strength of its military force. Today this has changed. Now the strength of a nation lies in the human resources of its people. This tells us why European nations, Japan and America with no or little resources have done far better in every aspect of economic indicators than that of African nations with all the legions of resource, yet we are still poor. What is missing from our dinner table as Africans is science and technology. Without this we would be sitting on gold but always be begging for silver. We can be endowed with all the oil deposits in the world but without putting the revenue into the right equation we will never get solution to our problems.

I want to propose that 20 percent of the oil revenue be used as SCIENCE AND TECHNOLOGY ENDOWMENT FUND. Funds accumulated by this account would be given to universities, research institutions to do research. Everything that we are enjoying now has come out through the painstaking research done by someone. In this world you cannot be great if you are seen as end users of every product.

Through science and technology we can make use of the by-products of the crude oil and turn everything to productive use. Take for instant our cocoa, there are more than thousand and one uses of cocoa by-product. However, due to our inability to carry research into them we through the cocoa everything away.

RENEWABLE ENERGY RESEARCH FUND

Whether we like it or not it will come to a time when all our oil resources will be depleted. In this case what will be consequences for the economy? Of course, the economy will overheat. In the past there used to be a gold mines at Konongo in the Asante Akyim District. Now the gold deposits have been depleted.

Nowadays with global warming taking prominent stage in every discussion it means that a time would come when an environmentally friendly substitute for oil will become a reality. In this case what will happen to our crude oil? So what prevents us from researching and developing biofuels options in the country?

I propose that part of the oil revenue be used for this venture.

TRANSPARENCY AND INTEGRITY FUND

Someone has said that where there is oil there is corruption. This is true for developing countries that have been lifting oil. Nigeria, Equatorial Guinea are examples.

Part of the oil revenue should be set as TRANSPARENCY AND INTEGRITY FUND. Independent state institutions like the CHRAJ, Serious Fraud Office (SFO) etc should be empowered by been financially resourced to carry on their work and be given the power to prosecute.