Local Content and Employment Issues in Ghana
Since the discovery of major oil reserves at the Jubilee oil field in 2007, the active involvement and participation of locals in the oil and gas industry has become a major policy issue in Ghana.1 Local content, a term referring to the percentage of locally produced materials, personnel, financing, goods and services rendered to the oil industry,2 has great potential to improve Ghana's socio-economic development, but has been constrained by capacity limitations in several areas, including financing, human resources, and technology.
The Ghana National Petroleum Corporation (GNPC) said in January 2012 that, of the $6 billion pumped into oil activities in Ghana over the past several years, less than 10% has come from local suppliers of goods and services.3
After a nation-wide consultation process, Ghana's Ministry of Energy formulated a policy framework dealing with local content issues in February 2010, which set a number of key policy objectives:
Maximise the use of local expertise, goods and services, and financing in all aspects of the oil and gas industry value chain
Develop local capability through education, skills and expertise development, transfer of technology, and active research and development
Achieve a degree of influence or control over development initiatives for domestic stakeholders
Achieve at least 90 percent local content and local participation in all petroleum activities by 2020
Increase capabilities and international competitiveness of domestic businesses and industrial sectors
Create oil and gas and related supportive industries to sustain economic development
In addition to the objectives listed above, the policy framework mandates that all regulatory authorities, contractors, sub-contractors and other entities involved in Ghana's oil and gas industry should consider Ghanaian companies and operators before foreign entities in the award of contracts. It also calls for the establishment of an "Oil and Gas Business Development and Local Content Fund" to support local capability development.
Progress on legislation
In November 2011, the Ministry of Energy summoned service providers in Ghana's petroleum industry to a stakeholders meeting to address the government's efforts to increase Ghanaian content and participation. According to the website Modern Ghana, the meeting came amid reports of Ghanaians being sidelined to the benefit of other nationals in recruitment by service providers in the sector. Emmanuel Kofi Armah-Buah, a Deputy Minister of Energy, said his ministry had received increasing complaints from stakeholders, especially the Rig Workers Association, of companies not living up to expectations in their employment of Ghanaians.
The Ministry of Energy said in December 2011 that Parliament had begun studying the national local content policy framework,4 which had already been approved by the Cabinet, with the aim of improving Ghanaian participation in the operations of oil and gas companies in the country.
According to Deputy Energy Minister Armah-Buah, international oil and gas companies such as Tullow, Kosmos, MODEC, Saipem and Oando have taken steps to improve their local content capacity, and the World Bank voted in February 2011 to give Ghana $30 million to support capacity development programes to improve Ghanaian participation in the oil and gas industry.
Overview of Mineral Sector Regulation in Ghana
Ghana is well endowed with substantial mineral resources, the major ones being gold, diamonds, manganese and bauxite. Gold is the predominant mineral produced in the country accounting for over 90 percent of all mineral revenues annually over the past two decades.5 The mining sector currently contributes approximately 41 percent of total exports earnings, 14 percent of total tax revenues, and 5.5 percent of Ghana’s gross domestic product (GDP). The 2006 Minerals and Mining Act states that these mineral resources belong to the Ghanaian people, and therefore their management is entrusted to the President in accordance with the governing provisions of the Constitution. Thus, the Parliament of Ghana may make specific laws regulating rights and interests in minerals. It is the specific mandate of the Minister of Lands and Natural Resources to govern access to minerals, on behalf of the President.6
Evolution of Mining Sector Regulation
In 1986 the Minerals and Mining Law (PNDC Law 153) was enacted to develop the sector and liberalise the mining sector, offering significant new benefits to investors in the area. The law established the Minerals Commission to regulate this development. Since the passing of the 1993 Minerals Commission Act (Act 450) the Commission hass been responsible for day-to-day administration, regulation and management of the mineral resources of Ghana. It advises the Minister of Lands and Natural Resources on matters relating to minerals policy and on the granting of mineral rights. The Commission’s mandate also includes formulation and monitoring of national policy for the exploration of mineral resources.7
The Small-Scale Gold Mining Law (PNDC Law 218), the Mercury Law (PNDC Law 217) and the Precious Minerals Marketing Corporation Law (PNDC Law 219) were passed in 1989 to formalise and integrate small-scale gold mining, control mercury usage by small-scale gold miners, and create legitimate marketing channels for the minerals produced by small-scale miners. This regulation allowed significant inflows of investment, substantially increased production of gold in the country, and allowed for some increase in manganese and bauxite production.8
Since the 1980s the government has privatised the mining sector, leaving itself performing a largely regulatory role. There exists a complex regulatory structure in relation to the mining sector. At a central level The Ministry of Lands and Natural Resources is required (by the President and Parliament) to regulate the mining sector. It coordinates this regulation through various 'subsector institutions'.9 The Mining Commission is responsible for regulating mineral resources and managing minerals policy. The Geological Survey Department is tasked with collecting geological data, and creating a bank of geo-scientific information for use by the Ministry to assist regulation and policy-making. Inspectorate Division of the Mining Commission assumes the role of monitoring and enforcing the health, safety and environmental regulations that are detailed within mining law. The Precious Minerals Marketing Co. Ltd control the marketing channels for minerals and jewels produced within Ghana. At a local level, District Assemblies and Traditional Institutions retain some say over the nature of mining sector regulation, although central organisations have no direct accountability to them.
Current Mining Sector Regulation
Government has developed a new mining law, Minerals and Mining Act 2006 (Act 703) to replace the Minerals and Mining Law, 1986. The Minister responsible for mining retains responsibility for the overall management of Ghana’s mineral resources and policy-making, including the grant of mineral rights. According to a 2009 UN report, unlike the old legislation, the process of drafting and passing the 2006 Minerals and Mining Act was marked by the involvement of key stakeholders such as mining sector officials, civil society organisations (CSOs), nongovernmental organisations (NGOs), local authorities, labour unions, commercial investors, academia and government revenue agencies.
The new Act was designed with contemporary trends in minerals and mining legislation in mind and aimed to retain mining investment interests. Notable changes to the old Act of 1986 include a definitive time period within which the Ministry of Lands and Natural Resources must act in a decision over the allocation of mineral rights. Equally, written reasons must be provided explaining all such decisions - and mechanism for the contention of decisions is now in place. Regulations now apply equally to all parties, foreign or Ghanaian. The one exception being legislation specifically aimed at regulating artisanal and small-scale mining.
As of February 2012, a draft of a new mining policy was being finalised for passage by Parliament.
Minerals Licensing in Ghana
The process of mineral licensing seeks to manage national mineral resources through the allocation of rights to companies or persons to carry out mining operations. These operations include reconnaissance, prospecting, extraction and processing. Thus licences are awarded to those best able to augment knowledge of mineral reserves or commercially extract minerals in an efficient manner.10 In return for the right to carry out such activities, mineral licenses stipulate obligations and restrictions of usage. For example, in Ghana all licence holders pay a royalty of between 3 percent and 6 percent of their gross revenues.11
2006 Minerals and Mining Act
The 1992 Constitution and Section one of the 2006 Minerals and Mining Act clearly define the mineral resources of Ghana as the property of the Ghanaian people.12 The President places the Minister of Lands and Natural Resources in control of mineral licensing, it is thus his/her role to grant, revoke, suspend and renew rights to these minerals, and to do so in the interest of the people of Ghana.
The 2006 Minerals and Mining Act in Ghana provides a range of available fixed and renewable mineral rights – suited to all different phases and type of mining activity. A specific licence is required to buy and sell minerals – this is aimed to prevent the illicit trade of minerals. Certain types of licence impose a maximum surface area limit on mining operations – depending on the type of mining activity taking place.13
Licences are awarded for different time periods, and have different renewal clauses. A reconnaissance licence is granted for 12 months and may be renewed once. Initially prospecting licences have an upper limit of three years, but can be extended for an additional three years. A mining lease may be extended once, provided that the initial term has not exceeded 30 years.14
All applicants, Ghanaian and foreign alike, can apply for the right to mine. The one exception to this is licensing for artisanal and small-scale mining operations – where the allocation of rights is limited to Ghana nationals only.
Challenges Facing the Mineral Licensing Process
The National Coalition on Mining (NCOM) has criticised the mineral licensing process, because concessions granted in the past cannot be altered at a later date.15 It states that companies are currently enjoying royalties as low as 3 percent and generous tax concessions since the original agreements signed have frozen in an investor-friendly 'stabilisation clause' for a set period of time. The coalition called for the removal of this clause from any future law, suggesting that it has caused government to lose out on revenue and damages its regulatory control of the mining sector.
A report published by the World Bank’s Public Sector Reform and Capacity Building Unit for the African Region raises concern over the lack of an open tendering or bidding process to acquire mineral rights. The process requires an application to the Minister of Mines who, following advice from the Mining Commission, may or may not grant a licence. This lack of competition results in licences being awarded on a first-come, first-served basis. Details of the negotiations and contracts are kept confidential in order to protect commercial interests. However, the report suggests that this nondisclosure approach is a significant barrier against accountability and transparency.
Health, Safety and Environmental Regulation in Ghana's Mining Sector
A draft version of the proposed national mining policy states that the Ghanaian Government’s objective is ‘to achieve a socially acceptable balance... between mining and the physical and human environment and to ensure that internationally accepted standards of health, mine safety and environmental protection are observed by all participants in the mining sector.’16
Health and Safety Regulation
There is no national body or policy for general occupational safety standards in Ghana, however the Mining Regulations of 1970 provide a regulatory framework specifically for health and safety within the mining sector.17 Following the passage of the 2006 Minerals and Mining Act , the Inspectorate Division (ID) of the Minerals Commission was established and is now responsible for enforcing the Mining Regulations, 1970 (and its amendments).18 Thus the ID is tasked with ensuring health and safety in mining operations. The ID reviews proposed mining projects and, if it is satisfied with the health and safety measures in place, issues an operating permit. Without such a permit, a minerals licence holder cannot begin any mining-related activity.19 The ID also monitor mines to ensure compliance is ongoing.
The Ghana Chamber of Mines collaborates with the ID to form a Technical Committee on health and safety within the mining sector. Representatives from each mining operator within the nation work with this committee to review and recommend actions taken to address health and safety problems within the industry.
The Environmental Protection Agency (EPA), the Ministry responsible for the environment, works alongside the Forestry Commission and the Water Resources Commission to perform environmental regulation of the mining sector. The EPA processes environmental permits as part of the minerals licensing process.20 Regulation is laid out by the 2006 Minerals and Mining Act and the National Environmental Policy of Ghana, which is complemented by the Environmental Protection Agency Act, 1994 (Act 490) and various other guidelines. Mineral licences are not granted to an applicant unless they have provided ‘a satisfactory programme of environmental protection measures and how these would be funded’.
The EPA also continues to monitor environmental aspects of all mining activities within Ghana. One of its major tools for monitoring mining is referred to as the AKOBEN audit.21 This audit evaluates environmental and social performance, and ranks mining companies accordingly. The EPA measures companies against their Environmental Impact Assessment scores, and discloses the results using a colour coded system of five layers, Red is the worst rating, indicating poor performance and ‘serious risk’ to the environment. Gold is the highest rating, indicating an excellent performance and a strong ‘commitment to social performance’.
Challenges Facing Health, Safety and Environmental Regulation
A mining sector report published by the World Bank’s Public Sector Reform and Capacity Building Unit for the African Region suggests that environmental problems are often associated with mines that pre-date 1990.22 Yet the social and environmental impact of mining is still being felt by communtities today, and human rights and environmental groups, such as Ghana’s Human Rights and Administrative Justice Committee, have denounced ongoing violations of human rights by mining companies.23 This evidence is corroborated by the National Coalition on Mining (NCOM). It has observed environmental problems such as the diversion of waterways, pollution, contamination and loss of biodiversity.24 The Ghanaian Chronicle claimed that the desire to keep regulations to a minimum to reduce the burden on investors has allowed health, safety and environmental regulation to be relegated to the background.25
Artisanal and Small-Scale Mining (ASM) in Ghana
Artisanal and small-scale mining (ASM) is a form of subsistence mining, which provides a direct or indirect livelihood for over 100 million people in the developing world26. It often takes place alongside large scale operations, outside the formal system of regulation.
The ASM sector is strong in Ghana, and its importance is steadily growing.27 In 2000 it only contributed to 9 percent of gold production – by 2010 that figure had grown to 23 percent.28 Indeed, in 2010 the ASM sector produced $800 million worth of a gold and $11.3 million worth of diamonds. As of 2009 over 1 million people were directly dependent upon ASM for their livelihoods in Ghana.29
The presence of ASM is sometimes associated with challenges facing mining communities, such as environmental damage, safety concerns, the spread of communicable disease, security risks, child and forced labour, and illegal trade in minerals.30.
Regulation of ASM
The mining of gold within the ASM sector in Ghana is regulated by the Small-scale Gold Mining Act. The act was passed in 1989 – prior to this ASM was regarded as illegal and therefore minerals were often smuggled out via neighbouring countries. The Mining Commission estimates that in 1985 around $15 million worth of minerals were smuggled out of Ghana. Following the introduction of legislation in 1989, further regulations were laid out by the Minerals and Mining Act 2006 for small-scale mines wishing to obtain an official license to mine. Regulations included a minimum age of 18 for miners and a maximum mine size of ten hectares (ha).
However, less than a quarter of the ASM sector operates within these formal regulations. The majority, popularly known as ‘galamsey’, continue to operate outside the law. Sometimes these informal mines intrude on concessions of large-scale formal mines, giving rise to tension between the two parties.31
ASM and LSM co-existence
A recent International Council on Mining and Metals (ICMM) report suggests that the relationship between ASM and large scale mining (LSM) operations is a major issue currently facing governments, communities and companies: “For mining to have maximum positive impact, to preserve social harmony and to ensure minimization of environmental damage small scale mining needs to be legal, regularized and managed”.
According to the report, the relationship between ASM and LSM in Ghana has become increasingly strained in recent years, often culminating in violent conflict. Confrontations occur between on ASM miners on the one hand and LSM owners and state security forces on the other. Efforts to accommodate ASM and promote miners livelihoods by LSM companies, such as Gold Fields Ltd, have been criticised for lack of engagement with key stakeholders, lack of technical support and lack of financially viable alternative livelihoods.32
Overview of Hydrocarbon Regulation in Ghana
Civil society group Oxfam said in a 2009 report that, after the discovery of major oil and gas reserves at the Jubilee field in 2007, many significant steps were still required to build the institutional, legal, and regulatory system to govern Ghana's oil and gas sector.33 In 2008, Ghana produced a draft bill proposing a new regulatory body to govern upstream, midstream and downstream petroleum activities, and Parliament in April 2011 passed an act regulating Ghana's management of petroleum revenues. Ghana also has the National Petroleum Authority, which as of February 2011 was the government agency responsible for regulating downstream petroleum activities.
Petroleum Revenue Management Act of 2011
The Petroleum Revenue Management Act (PRMA) was passed by the Ghanaian Parliament in April 2011 with the stated goal of providing a framework for the collection, allocation and management of petroleum revenue in a responsible, transparent, accountable and sustainable manner.35
The bill received substantial contributions from civil society organisations (CSOs) and, according to website Ghana Oil Online, sets one of the highest standards for transparency in the management of petroleum revenues.36 Civil society group Revenue Watch Institute, commenting on a draft of the bill presented to parliament in August 2010, commended the bill's "strong oversight and transparency provisions" and noted that it had been "significantly informed and enriched by the wide consultation process developed by the Government of Ghana".37
Features of the law
The bill outlines clear rules for petroleum revenue inflows and outflows, establishing a Petroleum Holding Fund (PHF) to receive and disburse all petroleum revenues. From this holding fund, 70 percent of oil revenues are to be disbursed to the government budget, with the remaining 30 percent deposited in two newly created funds, the Heritage and Stabilisation funds, respectively.38
The objective of the Ghana Stabilization Fund is to sustain public expenditure capacity during periods of unanticipated revenue shortfalls, while the Ghana Heritage Fund provides an endowment to support development for future generations when Ghana's petroleum resources are depleted. In percentage terms, the Stabilization and Heritage funds are to receive 21 percent and 9 percent of total oil revenues, respectively.39
Transparency and accountability
The PRMA provides for reporting on multiple levels, with reporting authorities including the Ghana Revenue Authority, the Ministry of Finance and Economic Planning, the Bank of Ghana, the Investment Advisory Committee, the Auditor-General, and the Public Interest and Accountability Committee. Specifically, the Bank of Ghana is to conduct internal audits of Ghana's petroleum funds, while the Auditor-General conducts external audits. The Public Interest and Accountability Committee, a new body comprised of citizens responsible for independent oversight of the management of petroleum revenues, is to publish semi-annual and annual reports in two state-owned newspapers and online, and hold meetings twice every year to discuss the reports with the public.
Multiple clauses deal with the issue of transparency:
Clause 8 requires the publication of records of petroleum receipts in the newspapers and online.
Clause 16 requires the Minister of Finance to reconcile quarterly petroleum receipts and expenditures.
Clauses 46 to 48 provide for four different types of audits of the petroleum accounts: internal, external, annual and special.
Clause 50 requires the Minister of Finance to submit to Parliament an annual report on the Petroleum Account and the Ghana Petroleum Funds
Clause 51 provides that information or data that could impact the performance of the Ghana Petroleum Fund if disclosed may be declared by the Minister as confidential, subject to the approval of Parliament.
Clause 52 criminalises the failure by a person to comply with the obligation to publish information under the bill.
Clause 53 provides for the establishment of the Public Interest and Accountability Committee.
According to the Ministry of Finance and Economic Planning, these clauses collectively put Ghana in line with the requirements of the Extractive Industries Transparency Initiative.
Criticism and debates
Though widely praised, two aspects of the law have led to pointed debate: the establishment of the Heritage Fund and the collateralisation of petroleum revenues, referring to a process in which the government uses its petroleum revenues as collateral if it defaults on a loan.40 According to Mohammed Amin Adam of Ghana Oil Online, some observers have questioned the diversion of 9% of all petroleum revenues to the Heritage Fund, whose objective is to provide funds for future generations, at a time when Ghana faces serious developmental challenges in the present. It remains unclear whether the Heritage Fund's investments will actually bring substantial benefits to future generations, and whether this will impact Ghana's ability to develop in the near-term.
Clause 5, regarding the collateralisation of petroleum revenues, is one of the most debated and highly politicised in the law. The original provision prohibited collateralisation, but a subsequent amendment provided that Ghana's petroleum revenues could be collateralised. Government supporters of collateralisation have argued that the security of development financing depends on the ability to use oil revenues as collateral; but opponents have warned that this could lead to inflation associated with "dutch disease" and eventually bring on the effects of the resource curse.
Civil society group The Access Initiative has pointed to other potential issues of the law, including the fact that there is nothing in the law to prevent revenues from being spent on paying back loans not affiliated with oil production, meaning that the 70% of oil profits earmarked for paying off debt could actually encourage unsustainable borrowing.41
Ghana Petroleum Regulatory Authority Bill
The Ghana Petroleum Regulatory Authority Bill of 2008 proposes the formation of a regulatory authority to regulate, oversee and monitor activities in Ghana's petroleum industry, covering upstream, midstream and downstream petroleum operations.42
The World Bank in early 2012 approved a $100 million grant for Ghana to build a facility that will help house the proposed regulatory authority.43 Ghana's Cabinet approved the draft bill by June 2010,44 and as of February 2012 Parliament had not approved it and the bill had not yet passed.
Features of the draft law
In the draft bill, the proposed Ghana Petroleum Regulatory Authority (GPRA) is to enable increased private sector participation and investment, promote a vendor development program to enhance national participation in the supply chain process, and strengthen the regulatory framework for healthy competition in Ghana's petroleum sector. The GPRA is also to initiate, negotiate and administer petroleum agreements and assess appraisal programs, field development plans, tail‐end production and the decommissioning of petroleum fields and facilities for approval.
The bill also seeks to decouple the Ghana National Petroleum Corporation (GNPC)'s role as both the petroleum industry's major player and its regulator,45 defining it as a strictly commercial entity, partially defines the petroleum industry's fiscal regime, and seeks to establish disclosure and confidentiality rules for the sector.46
Regulation of upstream, midstream and downstream operations
Within the upstream industry, defined in the bill to include exploration, development and production of petroleum, the bill seeks a framework for inter-agency cooperation between the GPRA and relevant agencies such as the Environmental Protection Agency and the Ghana Maritime Authority (GMA), to see that health, safety and environmental standards in oil and gas operations are met. Under the bill, the GPRA is mandated to work with the GMA in approval for plans to build sub-sea petroleum pipelines and the allocation of safety zones.
In the midstream sector, defined to include petroleum activities between the well-head and refinery, namely petroleum transportation and storage, the bill seeks to establish a scheme to govern licensing to install and operate petroleum storage facilities, granting the GPRA the authority to grant licenses on specified conditions. The bill calls for a tariff on petroleum transportation via pipeline, and for the government to be fully involved in setting these tariff rates, which are to be set at a level at which the pipeline company will cover the costs of constructing, financing, operating and maintaining the export pipeline while still making a reasonable return. Transportation of petroleum by any means other than pipeline must be done with the license of the GPRA.
The bill mandates that persons or entities must obtain licenses before engaging in any downstream activities, which include importation, exportation, re‐exportation, shipment, transportation, processing, refining, storage, distribution, marketing and sale of any crude oil or refined petroleum products. Further, service providers in the downstream industry must submit a monthly report that indicate imports, production, domestic sale and consumption, inventory of crude oil and products and exports. The bill also promotes fair trade practices in the downstream industry.
Fiscal regime for commercial petroleum discoveries
The bill also establishes the fiscal packages agreed upon in the event of a petroleum discovery as follows:
Royalties in respect of oil and gas of 12.5 percent and 7.5 percent, respectively
Ghana National Petroleum Corporation (GNPC) receiving 10 percent carried interest
GNPC receiving additional interest (subject to reimbursement of GNPC to contractor for its share on its participating interest) of 10 percent
Corporate Income Tax of 35 percent
National Petroleum Authority
The National Petroleum Authority (NPA) is an agency that regulates, oversees and monitors the downstream petroleum industry in Ghana.47 Preceded by the National Petroleum Tender Board,48 the NPA was established in the National Petroleum Authority Act of 2005.49
As of late 2011, Ghana's downstream petroleum sector, over which the NPA has authority, included 45 oil trading companies, nine bulk distributing companies, 59 oil marketing companies, 19 liquid petroleum gas (LPG) marketing companies, one refinery, and 1,750 petroleum products outlets.50
Among its most important functions, the NPA:
Monitors and regulates ceilings on the prices, i.e. subsidies, of petroleum products in consultation with the Ministry of Energy
Implements the Unified Petroleum Price Fund (UPPF) to ensure that petroleum prices are uniform throughout the country
Regulates the bulk importation of refined petroleum products
Provides guidelines for petroleum marketing operations
Oversees the logistics of distributing petroleum products across the country
Grants licenses to and promotes competition among service providers and marketing companies
Regularly inspects of petroleum service providers and their outlets to monitor their compliance with health, safety and environmental standards
NPA website: www.npa.gov.gh/npa_new/index.php
Ghanaian Subsidy Policy
Ghana's petroleum subsidy policy has undergone substantial changes since the mid-2000s, due mainly to subsidies' prohibitive cost.51 Ghana spent about 450 million cedis ($276 million) on fuel subsidies in 2011.52
Prior to 2005, domestic petroleum prices had been subsidised by the government. In January 2003 prices were increased by 90 percent in an attempt to link the domestic prices to world prices, which sparked widespread domestic opposition. Facing an election in December 2004, though, the government unlinked domestic and international prices, and the total cost of subsidies increased sharply.53
In the same year, with the subsidy program becoming unsustainable, the government launched a poverty and social impact assessment (PSIA) for fuel. The PSIA was completed in less than a year and in February 2005 the government liberalised fuel prices, leading to a subsequent increase in prices of 50 percent. The price hike came together with a public relations campaign explaining the need for price increase and announcing measures to mitigate their impact. These measures included an immediate elimination of fees at primary and junior secondary schools, a program to improve public transport,54 the allocation of extra funds for primary health care in Ghana's poorest areas, and an increase in funds to a rural electrification scheme.55 Although there was opposition to the price hikes from trade unions, the policy was generally accepted and there were no large scale demonstrations against the increase.
The government continued its policy of liberalised prices subject to price ceilings in line with world prices from February 2005 until May 2008; but a surge in oil prices led the government to freeze the price ceilings between May and November 2008. In the 2008 national elections, the victorious opposition party had pledged to halt the increase in domestic oil prices. According to IHS Global Insight, however, the incoming government resorted to an effectively ad hoc pricing approach, with increases coming in April, June and November 2009.
Subsidy Reforms of 2011
In December 2011, Ghana cut fuel subsidies, with Alex Mould, CEO of Ghana’s National Petroleum Authority (GNPA) citing increases in crude oil prices and the depreciation of Ghana's cedi currency as the primary factors for the cuts. The cuts came as Ghana faced increasing pressure from the International Monetary Fund (IMF) to remove the subsidies, which the IMF contended were not effective in directly aiding the poor and promoted corruption and smuggling.56
The cut on subsidies for petroleum products was effective 29 December 2011 and resulted in fuel prices increasing by about 20 percent by 1 January 2012.57 Civil society groups such as the Ghanaian Trade Union Congress promised indefinite nationwide strikes, and partially in response to this, the government in early February 2012 proposed to effectively reverse this recent policy and cut prices by 20%, though the National Petroleum Authority had not yet signed off on the move as of 9 February 2012.58
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