Sophia Akuffo Warns Against Premature Ratification of Extended Oil Agreements

Former Chief Justice Sophia Akuffo has questioned the practice of ratifying extended oil agreements years before existing contracts expire, cautioning that Ghana risks locking itself into rigid and potentially costly arrangements.

Speaking on Joy News’ PM Express Business Edition, she expressed concern over the logic of extending agreements that still have a significant duration remaining.

Premature Extensions Risk National Interest

“I still don’t understand why I read that some extended oil agreements still have years to go. If there are 10 years or more remaining, the extension should start only from the end of the previous agreement,” Akuffo said. She added that such extensions should not be ratified by Parliament in advance.

She stressed the importance of built-in review clauses for future agreements to allow flexibility and protect national interests.

Ghana’s Contract Mindset Needs Reform

The former Chief Justice criticised the prevailing perception that agreements are immutable.

“In Ghana, we often treat contracts as if they are cast in diamond and blood, untouchable once signed. That mindset needs to change,” she said.

Akuffo warned that Ghana often leaves loopholes benefiting foreign partners while constraining itself, particularly in arbitration matters:

“We always leave an opening for the other party, and then we lock ourselves into a move as a nation, and then you cough, and they take you to court in their country.”

She also expressed frustration with recent arbitrations, referencing the Tullow dispute, suggesting that Ghana’s representation in international arbitration had been ineffective and costly.

Calls for Legal Safeguards

Akuffo urged that future contracts include explicit clauses allowing for review or renegotiation under specified circumstances. She highlighted the Atlantic Lithium agreement as a positive example, where the royalty structure allows for flexibility without retroactive adjustments.

“We cannot lock ourselves and must never lock ourselves into rigid frameworks,” she warned.

Key Takeaways

• Avoid premature extensions: Only extend contracts after the current term expires.

• Include review clauses: Contracts should have structured mechanisms for periodic review.

• Strengthen arbitration strategy: Ghana must protect its interests in international disputes.

• Learn from examples: Agreements like Atlantic Lithium show how to structure flexible, fair terms.

Akuffo’s insights underscore the need for Ghana to modernize its approach to resource agreements, balancing legal certainty with strategic flexibility to safeguard national interests.