Mr Speaker, I do not know where the consensus is; there is no consensus. Mr Speaker, this clause 5 is the nerve centre of this Bill and whatever mistake that is made there, throws the entire Bill out of gear. It is about 70 per cent of the revenue that we are getting from the oil find, which is going to go for collateral.
Depending on the structure of the collateral, that will mean that -- The 300 million that we have in this Budget this year, if we are collateralising something like three billion for ten years, it will mean that for the coming ten years, we cannot
touch that money as long as we take the initial loan of three billion.
If that is going to be used to pay for it, it excludes the possibility of changing our mind somewhere along the line -- So, personally, I am not against collateralisation in general but I am against collateralisation in the form that we have here with regard to oil.
Mr Speaker, let me just - I know we
are at the Consideration Stage, but let me give you the rationale behind why I am opposing this amendment.
Mr Speaker, the ability of this country to borrow has just shot up. We have the ability to borrow as long as we have the oil, lenders are prepared to lend to us as long as we have the oil. We do not need to collateralise the oil, our credit rating is already up, and it will be up and therefore, we do not need to collateralise oil. That is number one.
But more importantly, as soon as we use oil to collateralise, there is a moral hazard involved. And this moral hazard is this, the lender will be prepared to give us a loan irrespective of what we are going to do with it. If we are going to dig a hole from here to Kumasi and then fill it back, as long as he knows that we are going to pay with our oil, he will give it to us.
Mr Speaker, on the side of the one who is going to take the loan, because it will be easier to actually contract a loan with that collateralisation, what it will mean is that due diligence, social and economic evaluation of that project will not be taken very seriously. The tendency is that we will end up, and just as other countries are faced with difficulties -- they get easy access to loans and they use them for frivolous project. Maybe, we can even decide to collapse the whole of Accra and rebuild it.
This moral hazard is such that we have to be very, very careful how we handle this problem. But I think if we allow this
thing to happen, we will be in trouble. I am against it because of the moral hazard involved; I am against it because we are going to use almost the entire 70 per cent to do this, and indeed, it is not even true that the Stabilisation Fund cannot be used for that.
The Stabilisation Fund can be used to support the 70 per cent if we have shortfalls; at that point, we can use it. Of course, just to correct an error, the Stabilisation Fund is not to pay for a shortfall in cocoa price or in cocoa revenue; it should only be used when there is a shortfall in the revenue that is coming from oil. That is the only time that it should be used. That is my position and I think I will just let the House take its own stand on this. But in my opinion, this form as it stands now, I do not think I can support it.