From Boardroom To Bedroom

Offices, homes, hotels and virtually all places people spend their time require some form of furniture. Chairs, tables, desks, beds, wardrobe have gradually become a part of life.

Currently, the furniture industry is recording higher sales and observers think it is being driven by the craze for imported items and sheer ostentation.

Visit to workshops and showrooms in some parts of Accra revealed that though locally made furniture is much cheaper than imports of the same standard, most buyers both Ghanaian indigenes and foreigners resident in the country prefer the latter.

Local furniture dealers in the country, in recent times, are facing a major competition from importers despite the latter’s high prices.

Ghana has experienced the mushrooming of furniture marts, showrooms, centres and workshops in the recent past with most fittings imported from foreign countries.

Whereas furniture importers sell a sofa set for between GH¢700 and GH¢3000, the local version goes for as low as GH¢400 and GH¢1000. The main difference---quality and design.

A recent survey by the Association of Ghana Industries (AGI) has revealed that 78 percent of furniture on the Ghanaian market are imported, leaving only 32 percent to the local manufacturer.

The AGI study reports on how three sectors could be made efficient and productive. It noted that there were many problems facing the industry such as high domestic resource cost, high cost of doing business in Ghana as well as the period of registration and starting a business among others.

At the showroom of one importer in Accra, who did not want to be named, BUSINESS GUIDE learnt that local furniture makers were losing out “because they are not creative enough in designs”.

This foreign importer added that the locals were not emphasising quality and the finishing that was typical of the superior sheen of quality evident in imported furniture.

“We are conscious of environmental matters, the reason why our products are made from synthetic materials which are not only more durable than wood but also easier to work on,” he explained.

This dealer echoed the opinion of many players in the industry, saying that “the difference in quality is just too glaring with goods that pass certification, failing the test of time miserably.”

This, he says, has made many consumers insist on the best, in spite of the higher price tag on the imported units.

And there is another factor to explain this trend toward imported goods. Ghana, unlike the Asian exporters of furniture, lacks a well entrenched policy on environmental protection and the best the Government has done is to clamp down on logging, forcing practitioners in the timber sector to import the vital raw materials from countries like China, Dubai, India, South Korea, US, Togo and Malaysia among others.

The number of investors in the business has seen an upward trend but the more established players are calling for more stringent quality control with widespread concern that unscrupulous people pass low quality pieces as high-end furniture, eroding consumer-confidence in the process.

Prince Kwasi Diabo, General Manager of Agorwu Furnitures, is worried about the lax policy that is making the regulation of the sector difficult.

“There are mushroom workshops and furniture centres springing up on daily basis. It is like everyone is operating on his own, God for us all,” he says.

In an interview at the Dodowa Branch of the company that has become popular for its use of well seasoned tropical wood in making all kinds of furniture from the board room to the bedroom, Mr. Diabo pointed to some of the products on display and said “Look at the furnishing; quality is our benchmark but the importation of foreign furniture is affecting our share of the market and perception is swaying people as they think everything from a foreign market is of high quality.

“The common practice is where a dealer is also operating a workshop which is nowhere near the vicinity of the showroom and then pushes off products from his workshop alongside the imported ones, labelling all ‘imported’ ”.

This is the worst spectre haunting dealers with most advising that a customer should insist on quality and do their shopping diligently, observing keenly the kind of material in use and the finishing quality of the product.

However, Mr Paul Nyavor of Kpogas Standard Furniture Company Limited, where 40 percent of products on display in the showrooms are locally made while the rest are imported, says that products have to be labelled properly and the customer properly advised as there are customers for both the locally assembled and imported products.

Imported furniture has been in the market since the beginning of the country’s history with the advent of the Vono beds among other furniture equipment.

The dealers are however quick to add that contrary to popular belief, they do not target the jet set of the community but they serve a cross section of the market, including the low end group of society.

“We import some furniture and assemble some ourselves with different customer targets in mind,” said Mr. Nyavor, who agrees that the prices of imported products are more expensive than local ones.

The peculiar problems that his company faces are competition, power outage, and high cost of producing local furniture because of high cost of inputs (wood and abrasives).

With optimism, Mr. Nyavor foresees the future of the furniture manufacturing industry in Ghana to be more lucrative and “will continue to attract more competitors” as the domestic market is not yet saturated. “More houses, offices are being built and people change their furniture and will continue to change their furniture.

On the other hand, the influx of foreign furniture is not the only problem that the local manufacturers have to contend with; shortage of skilled labour, lack of raw material, obsolete machinery, financial constraint and the lenient government policy among others also form part of the headache of operators.

“The market itself is facing serious problems,” said Executive Director of the Association of Ghana Industries (AGI), Prof. Cletus Dordonu, Chief Executive Officer of Cledot Consult, said when he spoke on a TV magazine programme, “The Business Advocate” on Ghana Television to discuss the findings of a survey on the furniture industry.

Prof. Dordonu emphasizes that the patronage of locally manufactured furniture would come with a lot of benefits such as the creation of employment that will lead to the reduction of crime.

He admits that China, Dubai and India where importers now tend to look at, were not Ghana’s traditional trading partners “but with the development and expansion of their industry, Ghanaian traders look in that direction now”.

Mr. Nyavor thinks as the forests deplete, “companies will have to resort to bamboo and plastic material. Kpogas has a vast plantation to fall on in future as a strategic plan.”

For Agorwu Furnitures, by combining wood and metal, “we are not only reducing the use of wood but also giving our clients a variety to choose from”, said the Company’s General Manager.

Lack of education on why people should consume locally manufactured products is also a problem that needs to be looked at as quickly as possible. There is the need to create more awareness so that Ghanaians can consume what they produce.

Government is being blamed as in other countries subsidies are given to manufacturers who later export but in Ghana the opposite pertains and the local industry has to borrow from the banks at a high interest rate.

Government is therefore being called upon to reduce lending rate; but will the banks be able to do this in these times of global economic crisis?

Local raw material is expensive, which makes cost of production high and the supply of raw material is not regular and this makes manufacturers unable to meat customers demand.

“Sometimes, you have an order but you are not able to meet it because your suppliers have failed to deliver but foreign supply is very reliable,” said one player who combines local and imported furniture.

As the government is being called upon to come to the aid of the manufacturers of local furniture, the operators in the sector should also note that consumers intend to buy their products without compromising on the quality of service.

The Cry Of Mining Communities

Operators in the extractive industry, particularly mining companies, have always been criticised for contributing to the destruction of the environment and neglecting those affected by their operations.

Although products of mining form the foundation of human life as areas such as Agriculture, science and technology, manufacturing, construction, aviation, medicine, arts, communications, transportation and consumer goods depend on minerals and metals, the industry that produces the raw material for these is listed among the most destructive.

For the indigenes and farming communities mining affects, the activities of the extractive industry endanger their well-being.

Lucy Adutwumwaa, a resident of Asutifi district of Brong Ahafo, points to cracks in her building which she attributes to the activities such as blasting undertaken by the mining company in her community.

She claims she cannot drink from the river which is the only source of drinking water any more.

“I now have to buy expensive “pure water” (sachet water) and this, among other things, has made life difficult for me and my family.”

Many communities facing these challenges have organized against the companies by forming local, national, and international activist groups where they share information and work together to stop the harm that extractive industries cause.

In many cases, they have succeeded in stopping the mining or reducing its impact, though it takes time to achieve any results.

“The perception is that these extractive companies which are mostly transnational companies are in business to milk their host countries dry” Dr. Joyce Aryee, Chief Executive of the Ghana Chamber of Mines says, hinting that most people believe such companies are only interested in extracting the non-renewable resources, repatriating the huge profits and leaving the host country poor.

The minerals, metals, fuel, and timber that extractive industries seek are very profitable.

Ghana is endowed with minerals such as gold, diamond, manganese, bauxite as well as other industrial ones like salt, limestone and kaolin that are exploited on small-scale.

Gold accounts for the majority of mineral exports from Ghana yet residents of mining communities on countless occasions have petitioned the Ministry of Environment and Science, and the Ministry of Natural Resources to intervene “but to no avail,” observes Richard Adjei-Poku, Executive Director of Livelihood and Environment Ghana, an advocacy group.
For Nana Philip Prempeh of Kenyasi, “the mining companies are simply cheats.”

But is it true that mining companies only destroy the environment? PriceWaterhouseCoopers says mining companies are contributing “extensively” to national development.

However, the audit firm claims these contributions are not usually recognized.

To ascertain the value of the contributions of mining companies in Ghana, PriceWaterhouseCoopers conducted a survey: “Total Tax Contribution- A study of the economic contribution mining companies make to public finances.”

It recognized mining companies as important elements in the creation of wealth and development of countries in which they operate.

George Kwatia, Tax Partner at the PriceWaterhouseCoopers, affirms that the contribution of the mining sector is usually not recognized.

The companies that were covered under the survey reported a total turnover of $62.9 billion of which $10.1 billion went to various governments while $6 billion went to employees as wages and salaries.

Corporate income tax formed 40 per cent of all taxes and contributions in addition to other non-income taxes comprising royalties, VAT and infrastructure funding.

An amount equivalent to 15.3 per cent out of the total turnover of mining companies went to governments.

“Mining companies have over the years consistently maintained the position as the highest gross foreign exchange earner as well as providing jobs in the country,” says Dr. Aryee.

“It is good to have such surveys which indicate that we are not being ripped off,” she tells the surveyors.

Mineral royalties increased from GH¢1.9 million in 1990 to about GH¢90 million in 2009 and mineral royalties accounted for about 94 per cent of state royalties during the same period.

The mining industry in 2009 also paid an amount of GH¢125 million as corporate tax while GH¢1.7 billion was collected by the Internal Revenue Service (IRS) from mining companies.

To Dr. Aryee, fiscal imposts alone do not reflect the total value to the mining sector of the country as there are other indirect contributions such as foreign direct investment and secondary industries that also offer employment, and pay statutory taxes that positively contribute to national development.

Since the introduction of the Minerals and Mining Law, PNDC Law 153 of 1986, Dr. Aryee hints the country’s mining industry has recorded phenomenal growth as it continues to attract huge investments.

Records at the Minerals Commission indicate that Foreign Direct Investment (FDI) in the mining sector increased from $6 million in 1983 to $427 million in 2007.

The Mining industry in Ghana has seen a phenomenal growth especially after the Government's Economic Recovery Programme in 1983, due to the large investment inflows into the sector.

The friendly climate and the continuing high gold price in recent times, according to experts, guarantees greater profits for operators in the industry.

Yet to the mining companies, their full profitability will be realized if key challenges facing the industry such as encroachment of ‘galamsey’ miners on mining concessions, high import taxes and high interest rates are addressed.

Players in the industry who want to remain unnamed claim they continue to strive to add value to the communities in which they operate.

They claim they are at the forefront of the corporate social responsibility agenda in their host communities: Apart from their statutory contributions, they voluntarily provide schools, libraries, hospitals, electricity, potable water, roads, housing, sanitation facilities and alternative livelihood projects.

For the Chief Executive of the Chamber of Mines, Corporate Social Responsibility “is not an option but a necessity that enables the mining company to plough back some of its earnings to raise the quality of life of the communities.”

Social licence, with which players in the industry operate, rests in the hands of the host communities, and that to ensure a continuous renewal, there is the need to honour Corporate Social Responsibility roles to residents of mining communities as well as Ghanaians in general.

The Chamber therefore sees mining as a catalyst for national development since it engenders positive multipliers whose effects ripple through the whole economy.

Dr. Aryee suggests government and the mining industry should craft deliberate policies, plans and strategies to ensure that the potential for mining to contribute to national development.

“It is our expectation that the Government will also increase the quantum of mineral royalties that goes to the mining communities.”

Through the fiscal receipts the state derives from the sector as well as the developmental imperatives which accrue to the country, anyone can say mining has contributed enormously to the growth of the Ghanaian economy, but residents of mining communities who bear the brunt of the negative implications of the activities of the companies hold a different view.

Dr. Darcy White, Tax Partner at the PriceWaterhouseCoopers has therefore recommended that mining companies should consider if there could be business benefits from being more transparent in communicating their tax affairs to their stakeholders.

News From Ghana: No Market For Illegal Timber

http://businessguideghana.com/ghanabusinessspecial-report/8008-illegal-timber-has-no-market.html

No Market For Illegal Timber

Tight rules are being instituted to curb illegal timber trade in Ghana as some countries want to stop the destruction of forest by making it a criminal offence to trade in such timber.

This would protect the forest cover of these nations and ensure that foreign exchange goes directly to government.

Illegal logging is a major cause of deforestation in Ghana, contributing to the current global climate change.

Illegal logging causes governments to lose billions of dollars in revenue, environmental damage, promotes corruption and undermines the rule of law and good governance.

It retards sustainable development in some of the poorest countries of the world. Developed countries contribute to these problems by importing timber and wood products without ensuring that they are legally sourced.

Over the years, producer and consumer countries have paid increasing attention to illegal logging. The illegal timber business is taking a toll on Ghana, as well as the forest reserves of other African countries.

Over the years, producers and consumers of tropi¬cal timber have recognized that they have a joint responsibility to eradicate illegal logging to protect the environment.

The European Union is Ghana’s most valuable mar¬ket, accounting for 43 percent of the value of total exports and 33 percent of total volume.

Timber users in developed nations have been blamed for contributing to the environmental challenges of developing countries, as illegal logging has over the years been identified as a major driver of deforestation and climate change.

Importation of illegal logged timber is banned by most countries, but there are regular reports of such prohibited products on the market.

Previous attempts including the strengthening of environmental laws, establishment of task force to go after illegal timber loggers, who are usually chain saw operators, have not really stopped the supply chain.

It is reported that as much as 20 to 40 percent of global industrial wood production is from illegal sources, but the European Union (EU) is doing its part to ensure that illegally harvested timber and timber products are removed from the EU market.

The latest move to take illegal timber off the market was collaboration with key timber consumers of the EU who realize that they have an obligation to lead the world in fighting against the illegal timber trade.

To this end, the government of Ghana and EU are working together to ensure that timber exported out of the country is legally harvested.

This would assure European consumers that timber from Ghana is from legal sources.

Ghana has therefore signed a historic agree¬ment with the EU aimed at ensuring that only legally harvested timber from the country are exported to the EU mar¬ket.

The Forest Law Enforcement Gover¬nance and Trade Voluntary Partnership Agreement was signed in the European Council in Brussels by Ghana’s Head of Mission to the European Union, Nana Bema Kumi, European Delegation Environment Commissioner, Stavros Dimas and Sweden’s Minister for Ag¬riculture, Eskil Erlandsson.

The agreement provides a legal frame¬work and monitoring system aimed at en¬suring that all timber imports from Ghana have been acquired, harvested, transported and exported in accordance with the law in Ghana.

The deal establishes a national legality assurance system for all commercial wood and wood products, which would also cover timber and timber products that are sold to non European markets as well as on the domestic market.

Ghana decided to enter into a voluntary partnership agreement to demonstrate its commitment to good forest governance as a means to maintain access to valued markets.

Ghana expects the agreement to help enhance its reforms in the forestry sector to ensure that the forest sector contributes to poverty alleviation and promotes investment in the sector to ensure the future viability of the industry.

The agreement was signed after a special committee set up by the EU proposed financial penalties for exporters who damage the environment.

These penalties, it revealed, must represent at least five times the value of the timber products obtained by committing a serious infringement, adding that they would increase in the event of repeat infringements.

With this agreement in place, all operators are required to provide basic information about the source of their products, countries as well as the forest of origin and through a traceability system.
They would be required to identify the operator who supplied the timber and the consumer.

Mr. Dimas, the European Delegation Environmental Commissioner, congratulated Ghana for being the first country to sign a voluntary partnership agreement with the EU.

He was sure that the deal would help improve forest governance in Ghana to ensure that timber imported from the country is not linked to illegal logging.

The implementation of the agreement would be provided through a multi-donor programme supported by the European Commission, France, The Netherlands, U.K and the World Bank.

Karel De Gucht, European Delegation Commission for Development and Humanitarian Aid explained that “this agreement is a major step forward for both Ghana and the EU to ensure that only legally harvested timber from Ghana enters the European market.

“This agreement is a real example of how partnership can lead to good governance practices to benefit both sides and also set an example for other countries to follow,” he said.

Under these agreements, exporting countries would develop systems to verify the legality of timber exports.

The EU would support them to improve systems, which adhere to le¬gal compliance.

A number of timber producing countries are currently negoti¬ating such agreements with the European Delegation.

The first shipment of timber products from Ghana, which are licensed un¬der the scheme, is expected at the end of 2010.

Customs officials in EU member states would ensure that only timber shipment that meets the legal requirements would be allowed into the market.

Ghana and EU view transparency and information disclosure as vital to ensure accountability, increase aware¬ness and establish credibility of systems established un¬der the agreement.

The two parties would produce annual public reports to review the effectiveness of actions under the agreement.

Successful implementation of the agreement would require political commitment and investment in a number of areas, as well as the strengthening of regulatory systems.

Cynade Spillage Shown Red Light

The activities of mining companies around the globe put the lives of residents in the communities in danger if proper measures are not instituted.

There are laws that compel mining companies to ensure that their activities do not pollute the environment and endanger the lives of their workers and occupants of the community they operate in. But in developing countries, especially, such laws are overlooked.

Apart from destroying the natural environment, such as cutting down trees, leaving dug-outs and mining waste in the open, the lives of many residents of mining communities in Ghana have also been put in danger by the spillage and leak of cyanide.

Cyanide is a potentially dangerous chemical that contains carbon and hydrogen chemical elements, as well as salts and complexes of cyanide with a variety of metals in solids and solutions.

The highly toxic chemical is used for the production of gold; recovery of the precious mineral is also aided by cyanide while it is also be used for cyanidation mill tailings and leach solutions.

Cyanide poisoning can occur through inhalation, ingestion, and skin or eye contact. One teaspoon of a two percent solution can kill a person.

Cyanide spillages by mining companies have been responsible for several ailments in mining communities around the country.

“Mining companies that cause pollution to the environment must not be left off the hook.

They must pay for the damage,” said Gifty Eugenia Kusi, Vice Chair of the Parliamentary Health Committee, with a clenched her fist.

Mrs. Kusi, who is also the Member of Parliament for Tarkwa Nsuaem, strongly advocates the Polluter Pays Principle and says “if we do not pay attention to the environment by monitoring the activities of mining companies, posterity will not forgive us.”

To enhance the protection of human health and reduce the potential for negative environmental impacts of cyanide spillage or leakage, as a result of the operation of mining companies, the International Cyanide Management Institute (ICMI), in collaboration with the Ghana Chamber of Mines (GCM), has been educating stakeholders in the gold mining industry.

So far, two workshops for building the capacity of stakeholders in the mining industry has been organised in West Africa since 2007.

They were focused mainly on how to effectively reduce risk and the impact of cyanide-related emergencies.

They ended with mining companies in Ghana voluntarily signing on to the International Cyanide Management Code.

Four mining companies in Ghana including Newmont Ahafo Mine, Anglogold Ashanti Obuasi and Iduaperiem Mines; Golden Star Wassa and Bogoso Mines as well as Gold Fields Tarkwa and Damang Mines signed on.

The code for the manufacture, transport and use of cyanide in the production of gold, is a voluntary industry programme for the gold mining industry, to promote responsible management of cyanide use in gold mining.

However, barely a week after the international conference, residents of Kwamebourkrom spotted dead fishes floating on the local stream, Yaakyi, a tributary of River Subri in the Asutifi District of the Brong Ahafo region. It was traced to cyanide spillage from Newmont Gold Ghana Limited, Ahafo Mine.

Officials of the Environmental Protection Agency (EPA) hinted that the spillage of the deadly chemical into the river was as a result of the negligence of the mining company.

Isaac Osei, Brong Ahafo Regional Director of EPA, stated that Newmont failed to effectively monitor the rate of water flow into their environmental control dams and so when one of the dams began to overflow, the company could not detect it.

Though environmental management has been pointed out as a key corporate priority, it appears mining companies in Ghana have failed to integrate the subject into their continuum operations from exploration, through design and construction to mining, processing, rehabilitation and decommissioning.

Mr. Osei, who was obviously not happy about the negligence of mining companies, said despite persistent advice to Newmont to engage people to monitor its environmental control dams, the company ignored it and relied solely on machines and “because they have been relying on machines, when the overflow started, they could not detect it on time”.

Though Newmont has since paid compensations to the affected residents, Adiki Ayitevie, Regional Manager, Communications of Newmont, confirmed that the “minor chemical overflow contained gold ore active processing solution, including sodium cyanide.”

Luckily, the extent of the spillage was restricted to the Yaakyi stream, as remedial measures were taken before the polluted stream entered the River Subri, which minimized its impact to the affected area, comprising few hamlets, and the floating fishes which were detected dead by the people.

Newmont has provided a water storage plant that would supply the inhabitants of the affected area with alternative fresh water as their main source of water which is used for drinking, washing among other things.

At a day’s workshop on Implementing and Auditing International Cyanide Management Code in Accra, Joyce Aryee, the Chief Executive Officer of the Ghana Chamber of Mines, noted that even though the cyanide code is a voluntary programme, the interest shown by mining companies demonstrates their willingness in improving the management of this potentially dangerous chemical and how they can enhance the safety of their workers, communities and the environment.

She urged companies to implement the code’s provisions and use the best management practices available to operate in a safe and environmentally responsible manner.

“A safe working environment helps to maintain and motivate the human capital in order to increase productivity.”

To her, members of the chamber “continue to co-operate assiduously with the Environmental Protection Agency (EPA) and the mines inspectorate in adhering to environmental laws of this country”.

Daniel Owusu-Koranteng, Executive Director of Wassa Association of Communities Affected by Mining (WACAM), says a research by the Non Governmental Organisation campaigning against irresponsible mining in Ghana revealed that pollutions of rivers and streams in mining areas have reached levels that pose serious threat to human and aquatic life.

Blaming the situation on weak environmental standards and regulations, Mr Owusu-Koranteng observed that many of the water bodies in Ghana’s mining areas have immense deposits of heavy metals which are residues of cyanide spillage and this is as a result of the bad environmental practices adopted by mining companies.

“There is no law so when companies spill out cyanide, they come out to say it was accidental,” he added.

Paul Bateman, President and Chairman of the International Cyanide Management Institute (ICMI), confidently points out that aside promoting the code’s adoption and implementation, the institute will evaluate its implementation, manage the certification process and make information on the safe management practices for cyanide widely available.

The code was produced in 2002 after a cyanide spillage destroyed aquatic life in Romania in 2000, which compelled the United Nations and the International Mining Group organised a workshop that came up with the set of laws which now serves as an international standard for proper management of cyanide.

According to Norm Greenwald, Vice President and Secretary of ICMI, explained that companies that signed on to the code, which focuses exclusively on the safe management of cyanide and transportation for the recovery of gold and the requirements that related to financial assurance, accident prevention, emergency response, training, public reporting, stakeholder involvement and verification procedures, must have their operations audited by an independent third party to demonstrate their compliance.

Companies that adopt the code must have their mining operations that use cyanide to recover gold audited by an independent third party to determine the status of code implementation.

Audit results of companies that have signed on to the code would be made public as part of the measures to inform stakeholders of the status of cyanide management practices at certified operations.

Mr Greenwald emphasised that the code was intended to complement a mining company’s existing regulatory requirements and not to contravene rules and laws of an applicable political jurisdiction of a country that adopted the code.

“By becoming a signatory, a company commits to follow the code’s principles and implement its standards of practice, or in the case of producers and transporters, the principles and practices identified in their respective verification protocols,” he said.

The International Cyanide Management Code, which has been adopted by mining firms in the country, is expected to demonstrate to communities and stakeholders that they are protected from potential adverse impacts of cyanide.

However, Mr Greenwald thinks “the code will not serve as a guarantee that the world will be safe, but it can guarantee that companies that comply strictly with the code will reduce risks and the negative impacts of cyanide spillage in the environment.”

It’s been close to a year since the few gold mining companies in the country initialed the code and accepted to conform to international standards and best practice of cyanide management but while Ghanaians wait for when code signatories’ operations will be audited and the findings made public, Mrs. Kusi insists mining companies must be made to restore the environment in addition to compensating residents of the affected community.

Ms. Aryee reiterated that the adoption and strict compliance with the code would enhance good corporate image and engender goodwill.

“Remember that being a responsible company has far reaching consequences. It has consequences for your reputation and your ability to source funds from donors,” she said.

Oil Exploration is Ghana Ready?

There has been much talk about Ghana’s oil find and expectations are high even with the announcement of a last quarter deadline for the drilling of the country’s first commercial oil from the Jubilee Oilfield.
Politicians, analysts, economists, movers and shakers of the economy continue to shed light on how Ghana can avert the resource curse, which has its devastating impacts.
“We do not have to look far to learn lessons. Our neighbors in Nigeria are prime examples because of bad governance of their oil resources,” said Kojo Asante, Head of Programs at Ghana Center for Democratic Development.
There is no doubt that the discovery of oil and gas in commercial quantities in Ghana has raised the expectations of many Ghanaians.
Indications are that many Ghanaians see the oil discovery as the country’s last opportunity for national prosperity, which has eluded it after several years of dependence on cocoa, gold and timber.
President John Evans Atta Mills in his recent state of the nation’s address to Parliament was sure of the transformation of the Ghanaian economy as it becomes an oil-producing country.
President Mills explained that he would use the oil revenue that would accrue from the oil and gas discovery to propel the industrial development of Ghana.
This surely is good news as the people of Ghana currently depends largely on export of raw materials and would like to be counted among the rich industrial countries of the world.
The first major discovery on Ghana’s coastline was announced in June 2007 though exploration of oil and gas in Ghana started in 1896 in the onshore Tano basin.
31 wells were drilled between 1968 and the 1980s.
The oil industry in Ghana is significant as key international oil companies, including Tullow oil, Kosmos, Anadarko, ENI, Vitol, Afren, Hess, Vanco, Exxon Mobil and CNOOC have expressed interest in the sector.
The resource potential of the fields could be 4.5 billion though only 10 percent has been discovered so far.

The first phase of the oil exploration is expected to produce 120,000 barrels and 120 million cubic feet of gas daily while the second phase is projected to start by 2012 is expected to produce 250,000 barrels of oil and 250 million cubic feet gas per day.
It is projected that fiscal benefits for Ghana from the Jubilee Field per year base on a projected daily 120,000 barrels at the current world price of $60 per barrel would be $1 billion.
The amount represents less than 5.0 per cent of the country’s Gross Domestic Product of over $18billion.
The benefit, which is in respect of royalties, income tax and interest payments, if is to be shared among 23 million Ghanaians, will result in each receiving a paltry sum of GH¢17 per day,
To the Minister of Energy, Dr. Joe Oteng-Adjei, this amount is “woefully inadequate.”
According to him, however, this is an opportunity for Ghana to effectively reduce foreign exchange requirements for the importation of oil while increasing the country’s export earnings.
But the main question most observers ask when the issue of Ghana’s commencement of oil drilling comes up is, “Is Ghana ready?”
The Energy Minister acknowledges that the main challenges to be encountered when production starts would include issues of regulation, accurate tax assessment and collection, management of oil revenue and the continued increase in the use of local goods and services in petroleum operations.
“The discovery of oil and gas in commercial quantities has thrown up the challenge of how Ghana plans to manage its hydrocarbon industry and whether the country has the necessary legal and institutional framework in place to manage the industry,” he said.
Some of the existing petroleum legislations such as the Petroleum Exploration and Production Law, (PNDC Law 84), petroleum taxation and revenue laws, are yet to be amended.
PNDCL 84 spells out the rights and objectives of parties, and the sanctions to be applied in case of breaches and also provides a framework for the management of oil, gas exploration development and production. It states clearly that all petroleum products in its natural state are the property of Ghana.
Some experts have criticized the apparent delay in passing the law to regulate the sector ahead of the planned drilling, but government reacted by saying that it would not be rushed into commencing production.
Government says it would ensure that the exploration, development and production of petroleum are done in accordance with the terms of a petroleum agreement that is regulated and executed with the Minister of Energy.
Christina Samiah Yaba Nkrumah, Member of Parliament (MP) for Jomoro, whose constituency is one of the communities along the shores where the oil was discovered, is advocating for good policies that would protect the interest of Ghanaians.
The Minister of Energy said it is currently working on legislations to address the concerns of most people, assuring that laws would be put in place to ensure the provision of an investor friendly environment for domestic and international investors and to safeguard the maximization of benefits that would accrue from oil and gas discovery.
Currently, there are no concrete laws to dictate the fiscal regime that would demarcate the right level of income tax, resource rent tax, royalty and bonus payments to ensure that the government secures a fair share of all profits.
“We need to keep an eagle eye on the contracts that we are signing with the oil companies,” said the Executive Secretary of Transparency International’s local chapter, Vitus Azim.
Another crucial step in the management of the country’s oil industry is the need to address the shortage of the human resources.
Government has announced plans to set up a Petroleum Regulatory Authority (PRA) to oversee the industry’s operation, but does it have the technically qualified personnel in place?
With Ghana National Petroleum Corporation (GNPC) already lamenting over lack of professionals, it is likely that the emerging oil industry would come with human capital challenges.
This is not to say that GNPC does not have the capabilities, as it is on record that the corporation performed upstream assignments internationally in Angola and other places.
But it is a known fact that the upstream sector, which is technical as it entails exploring for prolific fields, is different from the downstream exploration.
“At this point, we acknowledge that we lack the know-how to manage this enormous resource but we are blessed with the experience of others,” said Francis Ackah, Engineering Manager at GNPC.
One can not rule out the issue of environmental challenges, but checks at the Environmental Protection Agency, the main body responsible for protecting the environment, shows that there is only one personnel with knowledge in oil.
We should also forget that oil is noted as a high risk for fire outbreaks. A visit to the Ghana National Fire Service (GNFS) Headquarters in Accra revealed an appalling state of the tenders, backup appliances, ambulances and command vehicles.
Also, one must also ask if our Ghana Navy is fully equipped to patrol and guard the coast of Ghana as the story of pair-trawling is not far-fetched.
“Government is fully aware of these challenges and is making every effort to overcome them,” said Joe Oteng.
Consequently, he said his outfit has put together a strategy to recruit and train professionals and other technical staff for the PRA.
There are many who agree with Catherine Abelema Afeku, MP for Evelua-Gwira, who thinks that it is important to get Ghana’s oil and gas governance right.
“We must not wait to have everything in place before exploration starts.”

Perking Up Ghana’s Waste Management

Over the last decade, specific emphasis has been placed on the sustainable use of environmental resources.
Most countries, both developing and developed, recognize that waste management is an issue of national concern to safeguard human health and the environment.
To address the issue of waste and its associated challenges, various international summits, including the 1992 Rio Summit and Agenda 21, have come up with internationally recognized principles for effective waste management, which includes reduction, recycling, reuse, safe collection, transportation and disposal.
According to the European Union (EU), under the Waste Framework Directive any unwanted or undesired material or substance that the holder discards or intends to discard can be described as waste. It is also referred to as rubbish, trash, garbage or junk depending upon the type of material and the regional terminology.
However, experts say it is very difficult to define waste since “items that some people discard have value to others.”
Currently in Ghana, private organisations that are championing the ‘Keep Ghana Clean’ campaign have ventured into waste management projects with Zoomlion Ghana limited to complement the efforts of Municipal, Metropolitan and District Assemblies (MMDAs) who have embarked on various initiatives.
The Accra Metropolitan Assembly (AMA) recently announced a fee-based solid waste refuse collection system, which took effect at the beginning of February 2010.
The house-to-house collection service, which attracts a minimal fee, is expected to absorb huge refuse that is generated by households and organisations.
Environmental Service Providers Association (ESPA) has pledged its support to the Fee-Based Solid Waste Refuse Collection arrangement.
ESPA also noted that it lacked capital to start the programme.
Evans Ewudzie Arthur, spokesperson for ESPA, called on stakeholders to educate Ghanaians in order to sensitize people to ensure the sustainability of the programme.
At the national level, a National Framework for Waste Management partially exist in the country, but the 1992 Constitution has no provision on the right of citizens to clean the environment.
A drive through some parts of the country shows heaps of waste in places like markets and along ceremonial roads and other important places.
Waste causes many negative impacts on the environment and society.
For example, food waste or sewage can cause a number of problems, including the emission of green house gases.
It also contributes to the pollution of water bodies such as the Odaw River in Accra, which has many sachets from purified water.
This is a clear example of how littering and indiscriminate disposal of waste can destroy water bodies in the country. While water packaging companies make a lot of profits, the sachets end up on the streets.
This development has contributed to the increasing poverty in our country, as people have to spend a lot of money on their health while the nation looses the needed human resource.
It is obvious that the consequences of waste on the environment and human health would slow the attainment of the Millennium Development Goals.
The collection, treatment and disposal of waste would also reduce the negative impacts on the environment and society.
A study conducted by the Ministry of Local Government, Rural Development and Environment revealed that despite the presence of many waste contractors in the country, more than 50 percent of the waste generated in cities such as Tema, Accra, Kumasi, Takoradi were not collected.
Naa Demedeme, Director at the Sanitation Unit of the Ministry, in an interview, disclosed that the greatest problem facing the nation was inaccurate statistic since “it is difficult to identify the quantity of waste generated in any part of the country.”
“Based on the assumption that every individual generates about 0.5 kilograms per day, the figure can be multiplied by the total population to generate the quantity of waste in the country,” he added.
Households, industries and commercial activities in the country generate a lot of waste, but indications are that majority of these people get rid of their trash through illegal means.
Many private and public lands are being used as dumping sites. People pack black polythene bags and dump them anywhere without thinking about health implications.
Those who indulge in this kind of illegal dumping of waste claimed that domestic waste collection services provided by private companies, popularly known as “door-to door” usually charge outrageous money, causing people to wake up at dawn to dump waste in the streets.
In Ghana, waste collectors dump refuse at land fill sites and the situation has caused residents in such communities to protest on countless occasions against the dumping of waste in their vicinity.
In developed countries, waste is recycled by resorting to physical and biological reprocessing.
Five recycling companies have mushroomed in Ghana and if they are supported the problems associated with waste would be minimized.
Others are advocating the Polluter Pays Principle, which would require the polluting party to pay for the destruction of the environment.
The campaigners want waste generators to pay for appropriate disposal of waste that are generated from their activities, with special focus on the industrial community.
However, it is unfortunate that though this campaign has been ongoing for some time now, no major feat has been chalked and it is obvious that with time frustration would set in.
Under the Urban Environment Sanitation Project (UESP) of the World Bank support programme, the Ministry of Local Government, Rural Development is undertaking a pilot project with some selected schools to pick water sachets, which would be bought by recycling companies.
Indeed, economical value can be attached to waste, but the problem of sorting waste into the various components must be addressed.
Containers for disposing paper, plastic, bottles and the other types of waste must be placed at vantage points in the city and in other parts of the country for proper material separation.
Waste management companies have not been able to deliver effectively in the country, but this situation has caught the attention of Parliament, which has called for the passage of a law to control and standardize the operations service providers.
Joseph Yieleh Chireh, Minister for Local Government and Rural Development, disclosed that “the Ministry is serious about the collection and transportation of waste in the country.”
“Monitoring, collection and dumping of waste by Assemblies at land fill sites are messy and too discriminatory. We are not happy about the current state of affairs,” he said.
He also indicated that the Ministry would ask MMDAs to hold training sessions for the contractors to promote the efficient collection and transportation of waste.
Members of Parliament (MPs) called on government to support companies that were engaged in recycling and re-use of waste in the country, noting, “We appeal to manufacturing industries in the country to use recyclable materials and bio-degradable items for production.
They have therefore asked the Ministry to embark on a nationwide campaign to educate the general public on the need to prevent waste.