The next government of Ghana has been advised to utilize private sector investment to revive the dormant Tema Oil Refinery (TOR), after the 2024 General Elections.
The Institute of Economic Affairs (IEA) says TOR is a strategic asset in the country’s energy sector which is crucial in driving economic growth.
Given the critical role the currently dormant oil refinery can play in the socio-economic development agenda of the country, IEA in its latest Policy Brief focusing on the priority areas for the next government, IEA is recommending the attraction of private investments, both internal and external to revive the facility.
Given the strained financial capacity of the government due to the economic downturn, IEA is convinced that the most viable option to revamp the facility is private sector investment in the refinery which is 100% owned by Ghana.
Revamping the facility that has for years become a white elephant, the IEA believes will inure to the benefit of the economy in the areas of reduction in the cost of importing petroleum products, saving the country foreign exchange, and creating employment opportunities.
“Tema Oil Refinery (TOR) should be revamped with the infusion of private capital and allocated locally-extracted crude oil to it to reduce the cost of imported refined products, while also avoiding wasting TOR assets, reducing fuel imports, saving foreign exchange and creating jobs,” portions of the economic think tank’s policy brief read.
This recommendation from the IEA comes a few weeks after the Association of Oil Marketing Companies made a similar call advocating for the facility to be revamped. The Chief Executive Officer of the OMCs, Dr. Riverson Oppong believes revamping TOR among others can help the industry deal with the substandard products currently produced by the private refinery operating in the country.
But this recommendation by the IEA to the next government may appear very difficult to undertake. According to the Minister of Public Enterprises, Joseph Cudjoe, the politicization of the operations of TOR including political interference has repeatedly hindered his efforts to engage private investors in recapitalizing the refinery.
He explained that private investors typically prefer to remain out of the public eye, but in Ghana, involvement with public assets often leads to unwarranted public scrutiny, deterring investment due to concerns about reputational risk and unfair associations with wrongdoing.
“Anytime you speak to potential investors in the refinery business, the response is always the same: TOR is a political football in Ghana,” Joseph Cudjoe stated last month when he addressed the media at the Ministry of Information.
