The National Petroleum Authority (NPA) is set to introduce a credit rating system, in partnership with the Bank of Ghana and credit bureaus, to bolster financial transparency within Ghana’s petroleum sector.
The initiative, which aims to mitigate credit risks and enhance the creditworthiness of businesses operating in the oil marketing space, will enable companies to better assess counterparties’ financial stability before entering into transactions.
Abass Ibrahim Tasunti, Director of Regulation and Planning at the NPA, disclosed during an interview on PM Express Business Edition that the credit rating system will allow Bulk Distribution Companies (BDCs) and Oil Marketing Companies (OMCs) to check the financial standing of potential partners, improving decision-making and risk management.
“If I am a BDC and I go and check your credit rating, and you are not doing well, I will naturally be reluctant to engage in business with you,” Mr Tasunti remarked, underscoring the importance of transparency in the sector.
Initially, participation in the rating system will be voluntary, though it is anticipated that widespread adoption will follow as firms recognize its utility in mitigating financial risks.
The initiative, which has already gained traction in discussions with industry players, is expected to become a mainstay by early next year.
Mr Tasunti noted that international oil firms have already expressed interest in similar mechanisms, encouraging local companies to follow suit.
“If companies are not complying with these standards, the industry itself, through the credit rating program, will be able to identify and isolate them,” he added.
Source:norvanreports.com