By Franklin ASARE-DONKOH
Director of Research and Advocacy at the Media Foundation for West Africa (MFWA) Dr Kojo Impraim, has tasked journalists to develop interest in reporting on the impact of Reserve-Based Lending (RBL) and Illicit Financial Flows (IFF) activities on the Ghanaian economy.
According to him, the time has come for journalists and their media houses to redirect their focus to issues that really affect the core value of human existence and national development.
Dr. Impraim, addressing some 25 financial, business, and economic reporters from the various media house including some staff of the Fourth Estate and Fact-Check Ghana at a two-day training on journalistic reporting on the impact of RBL by government transactions on revenue mobilisation and IFFs held in Accra criticised the over politicisation of issues to the detriment of critical matters that need addressing in the country.
Dr Impraim attributed the over-politicisation and coloration of critical national developmental issues to the proliferation of “political” media houses.
Though he acknowledged limitations faced by journalists in reporting on critical matters due to the ownership structure of some media houses in the country that shapes editorial policy in some respects he thinks the journalists can turn the narratives around.
“Although our media space is heavily dominated and operated by known politicians and are using that to control the media narrative, you the journalists known to be the agenda setters should be guided by your roles and responsibility assigned to you by the 1992 Constitution and talk about issues of national interest instead of what the country is experiencing now,” the Director of Research and Advocacy at MFWA said.
He however, commended the Ghanaian media for their work done so far in bringing attention to the galamsey menace, and urged them to sustain the momentum and also do the same in the financial sector to bring light to the issues in the sector.
The Director of Research and Advocacy at MFWA lamented about the political ‘capture’ of society by two major political parties, the New Patriotic Party (NPP) and National Democratic Congress (NDC), where both parties are seen hijacking the airwaves to spew their narratives.
In his view, Ghanaians are not angry enough to demand for better quality of life in the country, and think the media must stir up that anger by shining the light on critical areas of the economy that are being exploited by individuals and political leaders to the detriment of ordinary citizens.
“We haven’t been angry enough in this country and the backstops on you guys because you are the guys who have to set an agenda, a sustained agenda,” he reiterated.
Dr. Impraim, therefore, charged media practitioners to be advocates of good governance and accountability by using their platforms to expose corruption that continues to plague the country thus hindering its progress.
Meanwhile, an Economist and Extractive Governance Expert, Mr. Samuel Bekoe, took participants through what Resource-Backed Loans are and how they are used to secure financing for national projects.
He also touched on the opportunities of reserve-based lending and the risks involved.
The training topics covered areas including understanding Reserve-based Lending (RBL), Ghana’s future in mining the ‘minerals of the future’, natural resources taxation and the risks of RBL, and deploying data journalism into financial secrecy among others.
The training on Journalistic Reporting on the Impact of RBL by Government transactions organised by the Media Foundation for West Africa forms part of the “Strategic Partnership Initiative for Ghana and West Africa which is funded by the OXFAM in Ghana and DANIDA under the Accountable Governance Programme II is aimed at closing the knowledge and capacity gaps on RBL and IFFs.
Background
Reserve Based Lending (RBL) is a financing model predominantly used in the oil and gas industry where oil and gas companies secure loans based on projected cash flow from undeveloped oil and gas reserves.
Revenue generated from the production of these reserves is used to repay the loan. It consists of project finance, corporate finance, and asset-backed finance. The model is mostly adopted by oil and gas companies that are in a development phase in which production is imminent or already produced and need funds to expand their production. International oil and gas companies and local exploration firms leverage RBL from financial institutions to finance their operations.
A 2020 study by the Natural Resource Governance Institute identified 52 RBL facilities across 14 countries in Africa and Latin America, totaling $164 billion from 2004 to 2018.
The financing model is characteristic of resource-rich countries like Ghana, where the discovery of significant oil and gas reserves in 2007 and production in 2010 has positioned the country as a key player in the oil and gas sector.
In 2020, Ghana produced crude oil amounting to over 173,000 barrels per day.
Examples of RBL in Ghana are: PetroSA secured a $200 million RBL facility through its Ghanaian subsidiary in 2015 to monetize its offshore assets in Ghana.
The lenders of the RBL facility were Absa, Rand Merchant Bank, Standard Chartered Bank, BNP Paribas, Credit Agricole, and Natixis.
In 2017, a hybrid project finance and RBL structure secured US$1.35billion debt financing to support Vitol’s management of the Offshore Cape Three Points Block in collaboration with EniItaliam Upstream major, and the Ghana National Petroleum Corporation (GNPC). The financing included:
- US$ 400 million UK Export Finance (UKEF)
- US$300 million International Finance Corporation (IFC) facility
- US$180 million Multilateral Investment Guarantee Agency (MIGA) facility, and
- US$470 million commercial bank facility from HBSC, ING, Société Générale and Standard Chartered Bank
Similarly, in 2016 and 2020, Tullow Oil reached a $1.7 billion reserve-based loan agreement.
However, while RBL has significantly reduced financial strain and funded the development of Ghana’s oil and gas industry, it is also susceptible to misuse and as a conduit for illicit financial flows (IFFs). Ghana, like other sub-Saharan African oil-resourced countries, faces increasing vulnerability to corruption when managing oil wealth.
The extractives sector is highly prone to IFFs and corruption. Of the USD 1.2 trillion generated annually from the sale of oil and gas commodities, only 22% of the proceeds, on average, are remitted to government treasuries. While some funds may be reinvested, a significant portion is lost to illicit activities, undermining domestic resource mobilisation.
