The management of natural resources such as petroleum can be a blessing or a curse for developing countries. Ghana is fortunate in the sense that in anticipation of being an oil producer, it has learned lessons from countries that have managed their oil resources well and from those that have not fared so well. On the positive side, the discovery of substantial reserves of petroleum in Ghana presents a unique opportunity for the government to use the revenues to fast-track plans to lift the country out of poverty and cement itself amongst the ranks of middle income countries. But on the negative side, failure to adequately manage the revenues could lead to the ‘resource curse’, which among other things could even result in the worsening of the living conditions of the people. The promulgation of the Petroleum Revenue Management Act, 2011 (Act 815) and the Petroleum Commission Act, 2011 (Act 821) are examples of attempts by the country to avoid some of the negative aspects of oil exploitation. One of the challenges presented by a significant oil discovery is how to manage the high expectations of the citizenry. Transparency in the form of provision of adequate information to the public enables the government to be held accountable for its stewardship of oil and gas resources. In view of the crucial role that transparency plays in national development and cohesion, the Institute of Economic Affairs (IEA) initiated the Petroleum Transparency and Accountability (P-TRAC) Index project in 2011 to track progress in the governance of the oil and gas sector. The Index is based on four aspects of the oil and gas value chain, namely; Revenue Transparency, Expenditure Transparency, Contract Transparency and management of the Ghana Petroleum Funds. ‘Transparency’ is defined specifically as the provision of information to the public and the extent to which international best practices are used in the management of the oil and gas resources. The P-TRAC Index is constructed on the basis of questions relating to the four components listed above. The Index is calculated as a simple average of the questions for each of the four components. The inaugural 2011 P-TRAC report concluded that although some progress had been in the previous year, there were a number of areas that required further improvement in order to raise the level of transparency and accountability.
