Ghana's Oil Revenue and the Importance of Transparency and Accountability

Ghana's oil resources provide a great opportunity for the country's development. Yet despite the opportunities presented by the estimated $1bn per annum in revenues that will accrue to the country, the management of this new wealth  presents significant challenges. Observers need not look far beyond Ghana's borders to see examples of where the growth potential offered by the wealth of natural resources have been squandered, with the country instead finding itself plagued by a series of social, economic and environmental ills.

Whilst much can and needs to be done to avoid the curse, it is now widely accepted that an in emphasis on accountability and transparency in the management of natural resources is one of the most effective deterrents. It is therefore promising that Ghana's Petroleum Revenue Management Act (PRMA)  enshrines transparency as a fundamental principle in the  Government's management of petroleum revenues. It is important, however, that a statement of principle is supported by action.

What is the IEA Doing to Promote Transparency and Accountability?

The Institute of Economic Affairs (IEA) Ghana is developing the Petroleum Transparency and Accountability (PTRAC) Index. The purpose of the Index is to monitor different aspects of the Government's management of the petroleum revenues and to act as an indicator of the extent to which the Government's commitment to transparency and accountability is applied in practice. It is expected that the index will be used to inform the public of gaps/developments in Government practice, to assist the Government itself to identify areas requiring attention and to assist those with a formal oversight role in the management of revenues to undertake their role,notably the Public Interest Accountability Committee.

How Does the Index Work?

The index includes a series of questions, each relating to one of four components of the Government's management of the country's oil & gas revenues. The Index is constructed as a simple average of the questions for each component. The score for each question is based on whether a document, regular publication or online database provides the information demanded in the questionnaire.

What Does the Index Measure?

The four components to the Index are:

(i) Revenue Transparency: relating to the manner in which the Government manages the receipts from the oil & gas extraction.

(ii) Expenditure Transparency: relating to the manner in which oil and gas revenues are being spent

(iii) Contract Transparency: relating to the manner in which contracts with companies are entered into and recorded.

(iv) Oil & Gas Funds: is concerned with management of Ghana's Heritage and Stabilization funds set up under the PRMA

How will the Information be reported? How often?

The IEA will publish results from the Index at least on an annual basis (and more frequently depending on the extent of change in the Index score). The IEA hopes that the PTRAC Index can be an ongoing feature of the petroleum governance framework in Ghana.

Further information on the PTRAC Index can be obtained from the IEA's website, www.ieagh.org.  Alternatively, you can email the project team on This e-mail address is being protected from spambots. You need JavaScript enabled to view it. .