29 April 2013

Ghana: Why Privatise Ghana Oil?


A concerned Ghanaian economic consultant, Dr. Derrick Owusu-Ampofo, last Wednesday appealed to the government to withhold approval for all proposed plans to privatise the Ghana Oil Company (GOIL) to unnamed strategic investors.

Describing the plan as "dangerous", Dr Owusu-Ampofo tagged GOIL as a forerunner among state enterprises in the country, and the downstream petroleum industry generally, and which has been contributing its quota to national development.

Addressing a press conference in Accra to launch a campaign against the plan, Dr. Owusu-Ampofo thought it unthinkable that the government would think of divesting an oil company that was making profits and posting one the highest dividends in the industry.

Dr. Owusu-Ampofo buttressed his argument with facts: "GOIL's record indicates the company is doing tremendously well, posting profit after tax of GH¢7.888 million, representing 25 per cent improvement over the profits of 2010, whilst tax contributions to government - taxes and dividends - increased by 32 per cent over the contributions of 2010, to stand at GH¢65.083 million.

"Within the oil industry (foreign) multi-nationals control the upstream sector, it would, therefore, be dangerous to handover the downstream. Ghanaians must take hold of the economy through active control of strategic investments. ... The retail sector must be protected for the indigenous people ... we must all join the crusade to protect GOIL from divestiture."

Dr. Owusu-Ampofo pointed out that the fact that the GOIL share price kept its value over the year, and increased to GH¢0.32 from GH¢0.30 was a remarkable vote of confidence from the Ghana Stock Exchange (GSE), where stocks were generally on the decline.

The Chronicle is happy to lend its support to Dr. Owusu-Ampofo's appeal to President John Dramani Mahama to nip in the bud all attempts to divest GOIL to any strategic investor.

Why are we constantly harping on the need for high local content in the oil industry, and at the same time, thinking of selling the only national asset, already doing local content in the sector and capable of sourcing the high volumes of cash necessary for effective local contenting in the oil sector?

Is it that we don't know what local content means, or what?

What is the government's problem? Is it that it needs money urgently to fill a hole somewhere, and so it wants to copy the bad example of one of its predecessor governments, which sold Ghana Telecom, then a national heirloom, to pay workers' salaries? Are we cursed?

Whatever the government needs the money for, it does not need to sell GOIL to raise the money, if it must come from that company.

The "Good Energy" is already being traded on the GSE, and doing well there. All that the government needs do is order the issuance of new GOIL shares to the tune of, or slightly, higher than the amount it needs. Then Eureka! Cash na hand.

The only caveat The Chronicle would impose is that these new shares should be sold to Ghanaians only - individuals, groups, corporate bodies, etc.

If God has blessed us with one cash cow, we must keep all of it at home, and not allow any outside intrusion!

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