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NOVEMBER 28, 2016


Government’s consistent lowering of the cap on the Ghana Stabilisation Fund (GSF) could ultimately defeat the purpose for which the Fund was set up, with monies in the Fund expected to reach an all-time low this year.

Cap on the fund was initially reduced from US$250 million to US$150 million and then reduced to US$100 million, according to the Finance Minister earlier this year in his 2015 supplementary budget estimates.

The continued depletion of the Stabilization Fund, whose closing book value at the end of 2015 was just US$177.4 million, some analysts say, weakens its capacity to help sustain critical public expenditure especially in times of lower than expected oil prices.

The Stabilisation Fund, which was established under the Petroleum Revenue Management Act (Act 815), was to provide budgetary support in times of shortfalls in expected petroleum revenues, but the Act was later amended to allow excess monies in the fund, ie beyond US$150 million, to be moved into a sinking fund for debts repayment purposes.

The Fund had a balance of US$379.19 million in 2014 when the Finance Ministry announced a cap of US$250 million, which allowed the excess amount to be channeled into a contingency fund to allow for debt servicing.

A year later even as petroleum revenues fell, the Finance Minister lowered the cap on the fund to US$150 million, and transferred the excess to the Sinking Fund to be used for debt servicing.

For the third year running, the Finance Ministry, in the 2016 mid-year budget review, announced a reduction of the cap to US$100 million which would mean that the excess would be transferred to the sinking fund for debt servicing again.

Government will thus move an amount in excess of US$74 million into the sinking fund, as its bid to raise another Eurobond this year has been met with demands by investors for excessive yields.

Oil revenue since inception

Since Ghana began the commercial production of oil in 2011, a total of US$3.3billion dollars has been realised. The Petroleum Revenue Management Act (Act 815) stipulates how the oil revenue should be distributed. Based on the Act, transfers were made to the Ghana National Petroleum Corporation (GNPC), to the Annual Budget Funding Amount (ABFA) and the Ghana Petroleum Funds.

Over the last five years, GNPC has had a total of US$959 million, representing 30 percent of all revenue received from oil. The ABFA, which is the share of the oil revenue used to support the budget, it has received a total of US$1.4 billion, representing 43 percent of all oil revenues.

The Ghana Petroleum Funds, which comprise of the Stabilisation Fund and the Heritage Fund, together received US$874 million, representing 27 percent of all oil revenue since inception.

By :Richard Annerquaye Abbey

NOVEMBER 28, 2016

fishing 2

Growth in the agriculture sector has failed to mirror annual allocations of oil revenues to the sector, raising concerns over the ability of oil proceeds to lift the farming business from its dwindling fortunes.

A Graphic Business trend analysis between 2011 and 2015 showed that while allocations from the Annual Budget Funding Amount (ABFA) to the sector rose by 354.2 per cent, growth in the sector averaged 3.2 per cent within the five-year period.

Between 2011 and 2012, when ABFA allocations to the sector rose from GH¢13.1 million to GH¢72.5 million, growth in agriculture also rose from 0.8 per cent to 2.3 per cent.
Annual growth, however, took a nosedive from 2013, dropping from 5.7 per cent to 4.6 per cent in 2014 before easing further to 2.5 per cent last year. The declining growth was in spite of increased disbursements of ABFA to the sector.

Within the period, a total of GH¢329.4 million was disbursed to the sector. In 2011, the sector received GH¢13.1 million, 2012 allocation increased to GH¢72.5 million, and decreased to GH¢13.6 million in 2013. Allocations shot up to GH¢170.6 million in 2014 and then decreased to GH¢59.5 million in 2015.

Percentage share of GDP

In terms of contribution to total output measured by Gross Domestic Product (GDP), the agric sector has lost its leading position to the services sector.

The sector’s contribution was 25.3 per cent in 2011 but slumped to 22.9 per cent in 2012. It further dropped to 22.4 per cent before inching to 22 per cent in 2015.

Usage of sector allocations

Allocations to the agriculture sector were spent on a number of projects between 2011 and 2015. Of the amount, GH¢64.8 million was used to fund the government’s fertiliser subsidy programme, with GH¢16.3 million going into the construction dams for irrigation purposes.

Some GH¢18.1 million was also used to rehabilitate aged dams. Another GH¢1.6 million was used to support the development of various fisheries infrastructure throughout the country.
Beyond that, an extra GH¢1.8 million of the sector’s share of oil proceeds was used as counterpart funding for various agriculture-related projects. Another GH¢199.4 million was also used to finance government projects, goods and services and investments captured under the agricultural sub-sector under the ABFA.

Some of the unclassified projects that appeared sparsely in the spending pattern were categorised as support for national programmes or projects, agriculture goods and services, agriculture investments, agriculture modernisation, among others.

Fisheries get big

Out of the GH¢329.4 million that went into the agricultural sector, about 40 per cent of it was used to support various interventions in the fisheries sub-sector within the five-year period.

So far, GH¢120.1 million out of the total allocation of GH¢329.4 million has been spent on rehabilitation of irrigation infrastructure, part payments for sea defence projects in fishing communities, payment for the rehabilitation of a laboratory at Tema and the construction of a Fisheries College.

Growth in this sub-sector has been volatile, recording positive and negative growth through the five-year period. It recorded a -8.7 growth in 2011, bounced back to a positive growth of 9.1 in 2012. Growth dipped further to 5.7 per cent in 2013 then to -5.6 per cent in 2014. The growth rate in the sub-sector is currently 1.3 per cent.

Impact not automatic 

An Economist and Senior Lecturer at the University of Cape Coast (UCC), Dr John Gatsi, said in an interview that investments that were done in the sector would impact positively on growth.

Citing the fisheries infrastructure as an example, he said the Fisheries College that was being built from oil revenues would train people who will then apply the knowledge acquired to help boost fishing in the country.

“The focus of the ABFA in the agriculture sector is to develop the infrastructure. Those items have a period within which they will be completed and it will then begin to have development impacts,” he said.

Dr Gatsi also explained that it was important for people to manage their expectations on how the ABFA could transform the sector, given that investments in agriculture did not necessarily promote growth.

This, he said, is due to the fact that growth in agriculture, as is the case with the other sectors, occurs as a result of numerous factors, one of which is investments.

By: Jessica Acheampong








I am honoured and privileged to be given the opportunity to address this august gathering on the occasion of our inaugural ceremony. This is an extremely special moment for me.

Distinguished Ladies and Gentlemen, without doubt this inauguration is of great importance to the Association of Oil marketing Companies, (AOMC) as it focuses on our tenure as a board which is critical in the operationalization and development of our association.    

I am at the beginning of my term as the chairman of the Association of Oil Marketing Companies Ghana, and have the opportunity to tell you about the goals I have set for my chairmanship.

I have closely followed the work of my predecessors. They have all become my role models whose work is a joy and honour to continue from where they left off.  At the same time, their achievements pose high expectations and goals for our tenure of which I am the chairman now.

OMCs play a critical role in the downstream sector of the Oil industry. We interface directly with consumers. I have said time and again that without OMCs the consumers cannot be satisfied.

The AOMC, as an advocacy institution would continue to direct downstream policy, legislation and regulation and pursue research towards the development of the downstream sector.

One of the key issues today is the growing concern over the influx and close proximity of fuel stations in the country. We will work closely with the regulator and support initiatives aimed at pushing for tighter entry criteria for new entrants into the industry. This is to help control the influx of OMCs into the downstream petroleum sector, which is currently estimated to be over 100 companies and the subsequent siting of fuel stations all over the country.

Let me highlight some of the goals of this board for the next 2 years.

Empowerment of Technical committees

My predecessor reactivated the technical committees to improve the efficiency of the association. I wish to state that under my chairmanship we will continue to empower the committees to work.

The new board will empower the technical committees to deliberate on key issues affecting the industry and report back to the Board for action. 

Changes in Operation & Relevance

Distinguished Ladies and Gentlemen, the association will change its operational strategy. We need to be seen as an important body in the petroleum downstream industry. The association needs to ensure we provide solid guidance to industry members to enable them to stay safe. The association will ensure improvements in standards in the operation of its members.

The spirit of change will be seen, as we vigorously embark on a drive of communication among members. We will direct, help and advice members accordingly of best practices.

Open door policy

It is important for the board to reflect the views and thoughts of the wider membership and hence the participation of all members is important. The board would operate an open door policy to ensure that members contribute to issues and bring out solutions to address the problems that confront our activities. Members shouldn’t hesitate to contact the secretariat or me.

Design of Filling Stations/Safety issues

The siting of our filling stations has become a topical issue in recent times. We need to have structures with accommodations for station staff since they work 24 hours. We would introduce a policy to ensure that designs of filling stations come with accommodation to serve the station staff.

Again, members would be equipped to improve safety standards in their outlets. Our dealers and consumers are very dear to the hearts of the industry. We cannot exist without them.

Media Collaboration

The media plays a key role in the petroleum downstream sector. We shall work closely with the media to ensure that consumer’s interests are protected. We shall organize seminars and workshops for the media personnel in order to appreciate issues within the petroleum downstream sector.

Finally, as Chair, I look forward to working with key stakeholders in the sector including the National Petroleum Authority (Our regulators), the Environmental Protection Agency among others for the smooth working environment.  

I also look forward to working alongside with my fellow Board members collectively as they bring an incredible cross section of knowledge and expertise.

I know that I speak on their behalf when I commit to our collective dedication to gain the momentum needed to advance the goals of AOMC.

I am grateful for the opportunity offered me to work for the betterment of the association and to lead the association for the next two years. I would strive for excellence in every way to be worthy of your confidence and promise not to let down this association as the chairman for the board.

I promise to work assiduously together with my team to move the association to the next level. I gladly accept to be the chairman for this great association.

Thank you.

Johnny Blagogee

NOVEMBER 28, 2016


The global fall in prices of crude has slowed down operations of businesses in the oil and gas sector in Sekondi-Takoradi Metropolis. The economic situation in the Western Regional capital improved largely due to the discovery of oil and gas in 2007 as businesses and multinationals flocked to the city.

But the sharp downturn in the prices of the petroleum product has led some players in the supply and servicing of offshore facilities in the sector to cut down their costs of operation. Mr Wilfred Johnson Bentum, the General Manager of Zeal Environmental Technologies Limited (ZETL), an international environmental management services in oil and gas, said business has reduced over the period.

Briefing journalists touring the company’s plant site, he said that the company’s operations had gone down drastically since prices of crude oil fell from 104 dollars per barrel in 2004 to 50 dollars per barrel in 2016. Notwithstanding, Mr Bentum said the fortunes of his outfit, a trans-boundary waste management firm, which also provides both offshore and onshore oil fields and industrial waste management services looked brighter in the ensuing years as experts in the sector predict sharp increases in the prices of crude in early 2017.

He said the company created menial jobs to the local people, especially during its point of entry and construction phase. He said as a Ghanaian company employing 150 people and it would have no other option than to lay-off some of the workers if the situation continues.

The situation was, however, not different at the SeaWeld Engineering Limited, another wholly Ghanaian owned wielding and fabrication firm which provides general engineering solutions to onshore and offshore clients in the sector. Mr Daniel Adade, the Project Engineer, told the eight journalists undertaking a 14-day media training course on oil, gas and mining during a visit to the facility that “the operations of the company has become stagnant” due to the fall in crude prices. He said it provided services to Tullow, MODEC, EMAS, YINSON, ENI and TECHNIP – offshore clients in the oil sector but business had slowed down for some time now. Mr Adade said the company has created direct employment for 45 fabricators and 25 wielders in the oil and gas sector and offered skills training for the industry to engage local employees.

Mr Kwaku Boateng, the Director of Services of the Petroleum Commission, the main regulator in the extraction of oil and gas, said there is the need to maximize the patronage of Ghanaian goods and services by increasing in-country spending on the commodities. He said the mining sector was dominated by foreign companies and had weak linkages with other sectors because little there was very limited interest in local participation.

Mr Boateng said local content participation was virtually absent during the development of the one billion dollar Ghana Gas project. All these trends, he said, necessitated the need to promote local content participation in the oil and gas sector by ensuring that major players in industry strictly adhered to the local content regulations.

Local Content Act 2013 (Act 2204) describes local content as quantum or percentage of locally produced materials, financing, goods and services rendered to the oil industry and which can be measured in monetary gains. Mr Boateng said much success had been chalked under the Local Content Act adding that out of the 776 companies registered with the Commission to provide direct or indirect services in the sector, 480 of them are fully indigenous. He said in 2016 out of the 1.4 billion dollar contract awarded by Tullow from January to October, 67 percent of the contract amounting to 884 million dollars, were awarded to indigenous companies.

Mr Boateng said lack of quality standards, limited capacities of local companies to deliver services, insufficient financing opportunities for local companies as well as inadequate certifications and labour unrest as some of the challenges in the sector.

Source GNA

Distinguished Ladies and Gentlemen, invited tuests, friends from the press, Good afternoon.
Once again I welcome you to this ceremony.
Let me acknowledge the presence of Mr.Yaw Agyeman-Duah, our former chairman, Mr. lsaac Banor
our former Industry Coordinator .Together they transform what used to be a one-man
office/coordinator into a fully-fleCged Association with a secretariat. I also want to acknowledge the
presence of Mr. AntwiAdjei our past Industry Coordinator. lt is good to see you again.
Four and half years ago I assumed the chairmanship of the Governing Board of this Association.
It was a time when the secretariat did not have any vehicle to do their work and had to depend on
the personal vehicle of the Chief Executive for all official rounds for the Association. There was not
enough money in the coffers of the association as a result of low number of members and the low
amounts of subscriptions and the irregular nature of payment by members'
The new Board got to work immediately and our first task was to identify ways of raising money for
the Association.
The Board directed the secretariat to open discussions with Government to reimburse monies owed
to OMCs since 2011, as a result of subsidies on some petroleum products which had become an
uphill task for individual OMCs to negotiate with Governrnent. The negotiations headed by the Chief
Executive and under the guidance of the Board yielded result that raked in about GHC 6.5million in
The Board approved a levy of between 5%-7% of the amount due each OMC.
This initiative restored the financial health of the Association and enabled the Association to acquire
two vehicles for the price of one for the Secretariat.
The Board further identified other ways of raising money. The Board again directed the Secretariat
to engage the Ministry of Petroleum to collect on their behall for a fee/commission, monies
members are supposed to pay back to the Ministry for lifting particular petroleum products, which
the Ministry was finding difficult to collect'.
This also yielded positive result and has become a regular source of income for the Association till
today. (DCM)
The Board over time also reviewed subscription fees for the various categories of members so as to
keep pace with the increasing tasks of the secretariat and its attendant rising cost of running the
We did not succeed as a Board in all of our attempts to put the Association on a sound financial
path. I recalled the Board approved the Daily Rate Subscription System. DRSS. (Pay as you load)
where an OMC/LpGMC will pay its subscription to our agent, electronically while that OMC was to
load its truck at all Depots.
I must admit that there were challenges in its implementation and the
Board had to suspend it' The out -going Board still believes that, that system when implemented
properly, will address our financial problems, and ultirnately enhance the advocacy position of the
Association. Nonetheless we have strengthened the present subscniption payment system and put an officer in
It has been the desire of the Board for the Association to have a permanent secretariat. So in 2013,
theBoardauthorisedtheacquisitionoftwoplotsoflandtoputupitsfutureoffices. MeanwhileMr.
Gyekye has offered to lead a team to negotiate with Government to find out if they could allocate
any plot to us in a convenient and easily accessible location in Accra.
While thinking of the long term, we had to solve the immediate problem arising out of the
inadequate spaces that were available at our Labone Office for the membership. The Board then
directed the chief Executive to look for a new office space to accommodate the growing numbers of
members which now stand at 116 from 60 when I became Chairman. The Chief Executive did a good
job by locating an office space at GIMPA. A more spacious place at a cheaper cost than what we
were paying at Labone. We also directed the Coordinator to engage extra staflf to enable the secretariat to meet the
increasing work load and be able achieve our avowed objectives as an association.
The Board also reactivated the technical committees of the Board.
1. OperationsCommittee
2. Strategic Oversight Committee
3. HHSE Committee
4. TechnicalCommittee
5. Legaland Ethics Committee
These committees met regular for long hours to deliberate on issues that have been brought to
their attention and to find solutions to them and report back to the Board for action. These
committees proved to be the brain of the Board. They did very usefulwork for the Association. The
Board would like to express its appreciation to all the rnembers of these committees. We
acknowledge your contributions and sacrifices. Let me seize this opportunity to also thank Mr.
Gershon Klutse and his colleagues from Star Oil, Goil, Total, Dukes and Shell, who developed
Marketer/Dealer Margin Model for us for our negotiations for margin review in the regulated
regime. The cooperation the association received from Mr. lsaac Tagoe, Mr. Dan Amoah, the late
Mr. Apedo and Mr.commodore Mensah and their group cannot be discounted.
The Board was involved on many occasions in negotiatiing with major stakeholders such as the, NpA
or EPA, GSA, FIRE SERVICE, GHA etc. when it came to lir:ense fees, rates, penalties and sanctions.
Where the whole Board could not go to negotiate with these agencies a sub-committee of the Board
was empowered to negotiate or in most cases the Chief Executive was directed to undertake the
negotiation and report back to the Board.
I am happy to announce that the Association has successfuily their negotiated with EpA to bring down processing and permit fees to a quarter (25%) of what EpA proposed. rt is arso understood and agreed upon that subsequent adiustments of the rates will be neg tiated with the AoMcs and be guided by the rate of inflation in the country.
sometime last the Association went to court to seek an interpretation of a clause in the NpA Act. The industry fert the ricensing of retair sites was dupricity. we were right.
rhe court directed the NPA to charge administrative fees for the retail sites and not license fees. And this must be negotiated with the AOMCs
Members of the Association face chailenges on dairy basis. A few of these are:
1' Demand from District Assemblies, MMAs for advertising fees lD signs. some charging as much as GHC100OO_14000 per tD sign.
2' GHA for fees designated for road maintenance. Meanwhile members already use their resources to collect road fund levy for this same government agency for this same roads.
3' PPMS' This is to check the quality of products being sold to the consumer. That is fine. Does it cover the value chain' BDCs, Transporters. oMCs and the Dealer. The Association is asking for kits to be supplied to them to enable members to test the products on receipt at the retail sites' As it is now the players do not know whether the person doping the products has done his work correctty or not only for another group from the ppMS department to come to tell us" the product has failed". Members are feeling that they are being short-changed.
4' The demand from NPA for oMCS to submit all documentation from prospective commercial customers before any suppry courd be made is restrictive to our business.
5. Derays in the acquisition of ricenses, per.mits from government agencies
6' Zonalisation' sometimes our members find it clifficult to get products to the Northern half of the country and sometimes to the western Region because their respective DBCs do not have products in Depots In Kumasi and Takoradi. This shourd be rooked at again.
7 ' Payment of petroleum taxes to GEPS is a big issue now. oMCs/LpGMCs literally have to borrow to pay these taxes because the oMCS/LPGMCS would not have disposed of the stocks when the taxes are due. I am happy to announce that the Association has sent a proposal to the Ministry of Finance to extend the payment cycle to between 30-45 days and also to all the other agencies connected with the above listed challenges,
The demand from NPA foroMCs to submit all documentation from prospective commercial customers before any suppry courd be made is inimicarto our business.
The Board oversaw the successful transition from regulated price regime to a deregulated price
regime in July, 2015. The Association played active rolls in the seminars and conferences that were
organised in preparation for the price deregulation.
Deregulation ensures improved supply of products (all kinds), efficiency, innovations and
competition and removal of subsidy.
We all admit that it is the best policy that ever happened in the industry, but it has not come without
its own challenges. lt is up to the regulator and the other stake holders in the industry to deal with
those challenges. After almost 18 months since its inception we will advocate for a roundtable
meetinB among all stakeholders to deliberate on the process so far and to chart a path that
incorporates all learning derived so that it is representative of the collective interests of all
It is good to acknowledge the contributions of past governors who are no more with us.
Mr. Omar Benson, Shell, Mr. Jonathan Molapo, Total, Mr. Gilluame Laroque,Total, and the late Mr.
Fred Osoro, Vivo. These were gentle who shared their cross country experiences and best practice
with us on the Board. We are gratefulto them all.
On behalf of the outgoing Board, we wish to thank the Chief Executive of the association and his
staff for the tremendous cooperation and support they gave us during our work. On my own behalf I
wish to express my profound gratitude to my cqlleague governors and Kwaku for their support and coperation. To the en ers-of the Assqciation I thank you for your support.

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