The Civil Society Platform on Oil and Gas is raising the concern that Ghana has already started showing signs of the Dutch Disease, few months into the production of oil and gas in the country.

The Platform's Coordinator, Mohammed Amin Adam, addressing the opening of the Summer School of the Africa Regional Extractive Industries Hub at the Ghana Institute of Management and Public Administration (GIMPA), noted though it is early days, analyses of the first quarter of the economy shows that the country is on the path of developing the unpopular phenomenon often associated with oil producing countries.

He said during the period the country's currency grew stronger but agriculture growth saw a decline by 35 percent over the same period in 2010. Also, there was a strong performance by industry at a growth rate of 21 percent, largely on the back of oil production.

The summer school which is one of the Hub's core activities is being attended by senior level civil society activists who have been engaged in the Extractive sector, Members of Parliament serving in Extractive Industry (EI) related parliamentary sub-committees and senior level journalists/editors from Ghana, Tanzania, Uganda, Sierra Leone, Liberia and Cameroon. It was organised jointly by GIMPA, the German Development Co-operation and the Revenue Watch Institute.

The two-week residential course comprehensively covers fundamental and intermediate governance issues in the EI value chain. It also seeks to deepen knowledge and equip participants with skills for them to undertake independent analysis of fiscal and revenue management policies, EITI reports analysis, contracts analysis and finally understanding of key legislation in their own countries. Based on sound independent analysis of these frameworks; accountability actors can develop informed strategies to engage in the management of the sector.

'The Dutch Disease' also called the 'resource curse' or the 'curse of oil' is the damaging effect on an economy as a result of exploitation and export of natural resources. It is claimed that an increase in revenues from natural resources (or inflows of foreign aid) will make a given nation's currency stronger compared to that of other nations (manifest in an exchange rate), resulting in the nation's other exports becoming more expensive for other countries to buy, making the manufacturing sector less competitive.

According to Mr. Adam, most countries have faced the 'Dutch Disease' effect due to low absorptive capacities in their economies, following the commencement of the production of a natural resource.

He said for example, Angola's coffee and cotton industries, which represented 28 and 2 percent, respectively of that country's GDP collapsed by 2003, after production of oil and gas started.

Also, in Nigeria another oil producing country had a viable agriculture sector in the 1960s and exported surpluses but declined substantially in the last decade.

The major problem the Platform Coordinator noted facing resource abundant countries and which have hampered their abilities to efficiently manage their resource wealth for improved living conditions of their people are problems of investment and distribution of resource wealth, poor governance and weak institutions.

He observed that resources are non-renewable and their prices are volatile and instead of investing resource revenues in productive areas and thus diversify the economy to withstand post-resource revenues in productive areas and thus diversify the economy to withstand post-resource economic difficulties, most resource abundant countries prefer to spend on consumption.

"Other countries embarked on excessive and uncontrolled spending and sometimes resorted to debt accumulation against their finite resources in what is commonly referred to as 'collateralization'. The depletion stage of natural resources further results in declining revenues which account for the postponement of vital projects, high debt servicing and its concomitant interest accumulation; and almost always creating unplanned fiscal deficits and increased indebtedness to finance the deficits, and weakening the international reserve position in the process," he added.

"Transparency, accountability and strong institutions are what we need to complement the economic prescriptions of sustainable management."

He said as most of the problems of resource curse are political in character, they must be addressed at the political level to pre-empt political leaders from weakening the regulatory institutions.

Mr Amin underscored the need for independent institutions to be built. These institutions should be adequately resourced and insulated from political interference. Also they must have clear and specific mandates and must seek to protect national interest and promote the welfare of citizens.

"Strong and independent institutions for development planning, regulations, public procurement and public spending, are much more transparent, accountable and efficient than those that fall to executive capture.

"But above all citizens must build strong coalitions of civil society organizations, seek knowledge, able to appreciate the dynamics of wealth management and to constantly remain vigilant to protect public interest," he said.

The Deputy Minister for Energy, Alhaji Inusah Fuseini, in a speech read on his behalf by the Chief Director of the Ministry, Professor Thomas Akabza, said government was aware of the past mistakes in the mining sector and therefore would ensure that they are not repeated in the oil and gas sector.

He said government has therefore taken several measures in this direction and accordingly passed the Petroleum Revenue Management Act as well as the Petroleum Commission Act. It has also drafted legislation for local content policy and set up the Ghana National Gas Company.