Extractive sector needs beneficial ownership disclosure for transparency

By Kodjo Adams, GNA

Accra, June 20, GNA - Ms Linda Ahunu, Policy Analyst at Africa Centre for Energy Policy, has said beneficial ownership information disclosure is needed in the extractive sector to tackle issues of tax evasion, money laundering and other forms of corruption.

She called for the development of beneficial ownership implementation framework in collaboration with agencies to save the country from losing huge sums of money and other investment costs to the state.

Ms Ahunu said this in Accra at a stakeholders’ forum on the need for beneficial ownership in the extractive industry, petroleum contract, and petroleum revenue management law manuals.

She said the concept of beneficial ownership identified persons who have significant control over a company and were foremost recipients of company profits.

She said the extractive industry was fraught with issues of tax evasion, stressing that the opaque ownership structures made it difficult to detect companies that evaded tax or have inappropriate relations with government officials.

Ms Ahunu said it was estimated that developing countries lose $1trillion each year due to corrupt or illegal cross-border deals, many of which involved companies with unclear ownership.

She said in Ghana, it was estimated that nearly $2.1billion was lost to tax evasion annually between 1970 and 2008, adding that the country lost an estimated GH¢850million in revenue in 2016 due to tax evasion as a result of illegal trade in petroleum products in the downstream sector.

According to her, to successfully implement beneficial ownership disclosure, the Registrar General’s Department must be supported by stakeholders to explore ways to obtain financial support for its implementation, especially in making the central register publicly available at no cost.

Ms Pauline Anaman, Head of Policy Unit, ACEP, touching on petroleum contracting, said contract transparency was one of the good governance practices that had gained global momentum in ensuring accountability in the sector.

She said the disclosure of a contract document was not enough but a broader concept of open contracting where information about formulation, award, execution, performance and completion of upstream contracts were publicly disclosed.

She said government should enact the Right To Information law that can bridge communication gap between citizens and the government.

Mrs Jo Ann Sackey, Senior Policy Analyst, ACEP, stated that transparency and accountability in the oil sector operations was necessary to improve governance in oil-producing countries to chart a better course for development and economic growth.

She urged government to focus spending on a few projects at a time to ensure timely completion and high value for money.

Participants were of the view that the petroleum revenue management law was key in ensuring efficient and equitable distribution and use of petroleum revenues to guarantee holistic socio-economic development.

GNA

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