The ‘new’ institutional politics of Ghana’s hydrocarbon governance

Abstract

Ghana’s discovery of oil in 2007 saw a rush to production in just three years. However, regulations lagged behind and it was not until 2011 that new legislation was enacted in key areas of oil and gas governance. Central to the legislative framework was the creation of the Petroleum Commission as the new regulator of upstream activity, while the national oil company – Ghana National Petroleum Corporation (GNPC) – was formally shorn of its regulatory role so that it could focus on commercial activities. This paper examines the performance of these separated institutions. Performance is always conditioned by deeper political dynamics and so we have moved beyond evaluating performance only from the perspective of the formal institutional remits. Using a political settlements lens, we argue that this separation of roles has been partially successful but that GNPC remains heavily involved in some aspects of regulation, due to its embedded power and the technical expertise it holds. The company has also become a vehicle for electoral politics in Ghana’s highly charged democratic system. At the same time, the Petroleum Commission has begun to find its feet after a few years of weak capacity but it remains heavily influenced by party political appointees and has only really been successful in putting in place critical subsidiary legislation and monitoring local content requirements. These dynamics around oil sector governance are in keeping with Ghana’s political settlement dynamics, which are competitive and clientelistic, so that key institutions become embroiled in partisan competition, producing mixed policy results.