Ghana 2016 Validation

Ghana's Validation commenced on 01 July 2016.

On 8 March 2017, Ghana was validated against the 2016 Standard

Validation is the EITI's quality assurance mechanism and measures the progress countries have made in meeting the requirements of the EITI Standard. For more information about the country, visit the country page on eiti.org.

The Board's decision

On 8 March 2017, the EITI Board came to the following decision on Ghana’s status: 

The Board agrees that Ghana has made meaningful progress overall in implementing the 2016 EITI Standard. The Board’s determination of Ghana’s progress with the EITI’s requirements is outlined in the assessment card below.

The EITI Board agreed that Ghana has made meaningful progress in meeting requirements 2.3, 2.6, 3.2, 3.3., 4.1, 4.2, 4.5 and 6.2. The major areas of concern relate to license registers (#2.3), state participation (#2.6), production and export data (#3.2 and #3.3), comprehensiveness (#4.1), in-kind revenues (#4.2), state-owned enterprise (SOE) transactions (#4.5) and SOE quasi-fiscal expenditures (#6.2).  

Accordingly, the EITI Board agreed that Ghana will need to take corrective actions outlined below. Progress with the corrective actions will be assessed in a second Validation commencing on 8 March 2018.  Failure to achieve meaningful progress with considerable improvements across several individual requirements in the second Validation will result in suspension in accordance with the EITI Standard.  In accordance with the EITI Standard, Ghana’s EITI National Steering Committee (NSC) may request an extension of this timeframe, or request that Validation commences earlier than scheduled.

The Board’s decision followed a Validation that commenced on 1 July 2016. In accordance with the 2016 EITI Standard, an initial assessment was undertaken by the International Secretariat. The findings were reviewed by an Independent Validator, who submitted a Validation Report to the EITI Board. The NSC was invited to comment on the findings throughout the process. The NSC’s comments on the report were taken into consideration. The final decision was taken by the EITI Board.

Ghana's progress by requirement

The EITI Board agreed the following assessment card:

Corrective actions

The EITI Board agreed the following corrective actions to be undertaken by Ghana. Progress in addressing these corrective actions will be assessed in a second Validation commencing on 8 March 2018:

  1. In accordance with Requirement 2.3.b, Ghana is required to maintain a publically available register or cadastre system(s) with the following timely and comprehensive information regarding each of the licenses pertaining to companies covered in the EITI Report: (i) license holder(s), (ii) where collated, coordinates of the license area, (iii) date of application, date of award and duration of the license, (iv) in the case of production licenses, the commodity being produced. Any significant legal or practical barriers preventing such comprehensive disclosure should be documented and explained in the EITI Report, including an account of government plans for seeking to overcome such barriers and the anticipated timescale for achieving them.
     
  2. In accordance with Requirement 2.6(a), the EITI Report must include an explanation of the prevailing rules and practices regarding the financial relationship between the government and state-owned enterprises (SOEs), e.g., the rules and practices governing transfers of funds between the SOE(s) and the state, retained earnings, reinvestment and third-party financing. In accordance with Requirement 2.6(b), Ghana must provide disclosures from the government and SOE(s) of their level of ownership in mining, oil and gas companies operating within the country’s oil, gas and mining sector, including those held by SOE subsidiaries and joint ventures, and any changes in the level of ownership during the reporting period. This information should include details regarding the terms attached to their equity stake, including their level of responsibility to cover expenses at various phases of the project cycle, e.g., full-paid equity, free equity, carried interest. Where there have been changes in the level of government and SOE(s) ownership during the EITI reporting period, the government and SOE(s) are expected to disclose the terms of the transaction, including details regarding valuation and revenues. Where the government and SOE(s) have provided loans or loan guarantees to mining, oil and gas companies operating within the country, details on these transactions should be disclosed.
     
  3. In accordance with Requirement 3.2, Ghana must disclose production data for the fiscal year covered by the EITI Report, including total production volumes and the value of production by commodity, and, when relevant, by state/region. Ghana should confirm all existing production for all commodities for the year covered by the report.
     
  4. In accordance with Requirement 3.3, Ghana must disclose export data for the fiscal year covered by the EITI Report, including total export volumes and the value of exports by commodity, and, when relevant, by state/region of origin. Ghana should confirm all existing exports for all commodities for the year covered by the report.
     
  5. In accordance with Requirement 4.1.a, the multi-stakeholder group is required to agree which payments and revenues are material and therefore must be disclosed, including appropriate materiality definitions and thresholds. The multi-stakeholder group should document the options considered and the rationale for establishing the definitions and thresholds. In accordance with Requirement 4.1.c, Ghana must provide a comprehensive reconciliation of government revenues and company payments, in accordance with the agreed scope. All companies making material payments to the government are required to comprehensively disclose these payments in accordance with the agreed scope.
     
  6. In accordance with Requirement 4.2, the government, including state-owned enterprises, are required to disclose the volumes sold and revenues received. The published data must be disaggregated by individual buying company and to levels commensurate with the reporting of other payments and revenue streams (4.7).
     
  7. In accordance with Requirement 4.5, the NSC must ensure that the reporting process comprehensively addresses the role of state-owned enterprises (SOEs), including material payments to SOEs from oil, gas and mining companies, and transfers between SOEs and other government agencies.
     
  8. In accordance with Requirement 6.2, the NSC must include disclosures from SOE(s) on their quasi-fiscal expenditures. The multi-stakeholder group is required to develop a reporting process with a view to achieving a level of transparency commensurate with other payments and revenue streams, and should include SOE subsidiaries and joint ventures.

The NSC is encouraged to consider the other recommendations in the Validator’s Report and the International Secretariat’s initial assessment, and to document the MSG’s responses to these recommendations in the next annual progress report. In particular, the EITI Board requested that the NSC undertake further work to document the coverage of the Master Facility Agreement of 2011 in accordance with Requirement 4.3, and that the next Validation provides an update on Ghana’s compliance with this provision. 

Next Validation date

A second Validation will commence on 8 March 2018.

Impact of the EITI in Ghana

Section 7.4 of the Ghana's Initial data collection and stakeholder consultation (see Validation documentation)   

The Annual Progress Report 2015 was submitted to the International Secretariat on 30 June 2016 and published on the GHEITI website early July 2016. The report is a condensed summary of GHEITI NSC and national secretariat activities during 2015. The 2015 Annual Progress Report centres on the dissemination of the 2012/13 EITI Reports and the production of the 2014 Reports, but also highlights progress made with regards to subject such as illicit financial flows, beneficial ownership, and other efforts related to outreach and capacity building. The report is comprehensive with regards to describing the activities of GHEITI and highlights key achievements, although it offers limited insight into the dynamics of EITI implementation and the flavor of discussions within the GHEITI community or beyond.

The report includes an assessment of progress with meeting each of the overarching requirements from the 2013 EITI Standard (p. 14-16). The table does not mention encouraged aspects of the EITI Standard, although the report refers to efforts related to artisanal and small-scale mining and beneficial ownership.

An overview of the NSC’s response and progress made in addressing the recommendations from the 2010-2013 EITI Reports is included in Appendix 1a for mining (p. 20) and Appendix 1b for oil and gas (p. 21). Under the title “Update on Recommendations Made in 2010-13”, the recommendations are listed in the matrix showing the status of a selection of recommendations contained in the mining and oil/gas reports of 2012-2013. There is no specific reference to the recommendations of the 2014 reports published in December 2015. The majority of recommendations addressed in the Annual Activity Report show as status either “ongoing” or “outstanding”, with a few of them marked as “complied” or “completed”. The report does not describe activities related to implementing the recommendations during the year.

With regards to assessing progress against work plan objectives, the Annual Activity Report contains a matrix with most line items of the 2015 work plan (p. 11-14), although a complete match of line items and associated dimensions of costs (estimate of work plan, budget, and actual expenditure) could not be established. From this matrix (columns “implementation status” and “outcome”) and from the narrative in the text of the Annual Progress Report, one can gain a reasonable understanding of GHEITI’s activities during 2015.

The Annual Progress Report (and past Annual Activity Reports) generally contain descriptions of several outreach and working sessions, usually bringing together the NSC and other stakeholders, which has provided opportunities for feedback to GHEITI on their activities. The report provides a narrative account of EITI implementation in Ghana, although there is no description on efforts to made specifically related to strengthening implementation and stakeholder engagement, and limited discussion of the challenges and difficulties faced apart from the lack of funding.

GHEITI has, with support from GIZ, conducted an impact assessment. The consultant Scanteam submitted their final report at the end of 2015, and the assessment was published on the GHEITI website on 15 March 2016. The NSC debated the impact assessment on several occasions, considering on one occasion that the assessment was failing to “emphasize the real achievements of GHEITI.”[3] The Annual Activity Report 2015 lists a stakeholder meeting to discuss GHEITI impact assessment report as an outstanding activity yet to be implemented in 2016 (Annual Activity Report 2015, p. 11).

 

[3] NSC Meeting Minutes of 13 May 2015.