Avoiding The Resource Curse – Ghana’s Story So Far!
I live in a country on the brink of an economic windfall after the discovery of one of West Africa’s single largest oil fields. Ghana is a country that has been hailed as an African model, a country that is already doing things right. Sustained gains made in peace and stability, democracy and governance, control of corruption, macroeconomic management, poverty reduction and signs of an emerging social contract have all made the country a relatively shining example of an African success story.
And now Ghana has found oil! Yet given the history of murky greasiness in oil economics all around the world, Ghana is on slippery ground – ground made slippery because of the uncertainty with which the country is facing its future as an oil-producing nation.
Already, discussions have started in various forums on whether Ghana will be able to make the most of this discovery. In the four years that have passed since the first announcement of loaded hydrocarbon columns off the country’s coast, policymakers have been at work around the clock, trying to manage local expectations about the anticipated economic payout.
One of the ways that has aided Ghana’s debate on oil transparency is the increasingly high rate of mobile penetration that has improved citizen participation in the dialogue. With a penetration rate of over 75%, a large number of people consistently tune in and contribute via SMS or call-ins to the hundreds of radio shows that discuss and scrutinize the oil industry every day. What’s more, many such shows host government representatives and subject them to forthright questioning.
When one of the Jubilee Field’s FPSO flow meters malfunctioned, there was a loud public outcry from all manner of people at their vigilant best in working to ensure that the country does not get short-changed in this new promised windfall. After all, many people are only too well aware that this country – formerly called The Gold Coast – has not benefitted from the extractive industry as much as it could have after decades of mining.
Trying times have been had, with chiefs from the western region where the oil was found asking parliament for a 10% cut of oil revenues. The debate on this issue quietened down after parliament declined to honour the request. Whether the chiefs are still disgruntled is not known but in Ghana in the eyes of traditional communities local authority is almost as powerful as central government and many will back their chiefs against government any day.
The rest of the world is applauding, making it clear that it has more faith in Ghana to succeed than other countries that have gone before her. But for Ghana, it is not yet a done deal. Progress is slow and each step is taken with the utmost caution.
Thankfully, the government is listening. When the president turned the valves on 15th December 2010 for commercial production to begin, even sceptics believed that Ghana was one country that could follow the example of countries like Norway and Botswana in avoiding the resource curse. The public contribution is intense and everyone in Ghana feels like a part of history in the making. The enthusiasm is tangible as the country takes its first steps into new territory – territory that has nonetheless been muddied in other places. In Uganda, Ghana has found a partner that treads the same path of trying to avoid the Resource Curse and both of these new oil-producing countries may need to learn from each other in making out a positive case for resource-rich African nations.
Only recently has it been revealed that Ghana’s West African neighbour and long-time economic and social partner Nigeria, whose oil industry spans more than fifty years, will need more than 30 years and $1billion to clean up an oil mess created by irresponsible oil companies operating in Ogoniland. Ghana is learning from these lessons and hoping that in its own fifty years to come, the applause that has now begun will grow even louder. Will Ghana be able to turn this oil find into an economic blessing? Will there be regrets along the way to achieving this dream? Only time will tell.