The Ghanaian State and Governance of the Upstream Oil and Gas Industry

Good governance of the national petroleum sector has become a topical issue in the past several years, more so as several petroleum-producing countries have failed to translate their resource wealth into broad-based developments and socio-economic outcomes. The failure is often due to the perceived weaknesses in the governance structures of these countries, institutional arrangements and the wider industry. This chapter identifies the measures and institutions put in place to ensure good governance in Ghana’s oil and gas sector. This chapter also highlights the evidence (outcomes) of the country’s oil and gas governance arrangements based on indicators such as the Resource Governance Index (RGI) and other industry metrics. The chapter reviews the governance framework and uses case studies to illustrate how political economy and political settlement variables impact oil industry governance outcomes. Specifically, this includes governance issues in (1) the award of contracts, (2) regulation and monitoring of operations, (3) collection of taxes and royalties, (4) revenue distribution and management and (5) implementing sustainable development policies and projects. The findings show that Ghana has achieved a marked improvement in its resource governance within the decade compared to international benchmarks. However, there are teething issues of enforcement, capacity building and resourcing of the governance institutions and participation of local entities in the oil and gas economy beyond revenue accruing to the State.