Wild expectations for Ghana’s Oil Wealth: Demystifying the facts!

Ghana’s oil find has brought in its wake, growing expectations where the youth in farming, fishing and diverse fields are strongly awaiting their share of the impending wealth-generating potential of the “black gold”. The oil fever was even stoked during the 31st December watch-night services in various places to usher in 2010 when church leaders offered divine prayers for a successful commercial production and exports which are anticipated to start in the late quarter of this year. These expectations are legitimate considering the fact that petrodollars create powerful economic incentives for economic growth, social advancement and poverty reduction.

Nonetheless, it should be known that Ghana is in no way insulated from the nagging challenges of oil exploitation especially when the resource curse continues to reign supreme in oil-rich countries in the African region. What then becomes of the fate of Ghana? Not being a “Prophet of Doom”, my intention is to expose the relevant issues that can augment the country’s effort in defeating the resource curse. I am particularly worried about the growing expectations of Ghanaians concerning the immediate upswing change of their livelihoods with oil revenues. If the local people, youths and chiefs at the coastal communities in Western Region are expecting an enormous change in livelihoods now, then I shudder this would be misplaced expectations. Another perspective include making a pertinent case from the intense tensions that surround the oil share holdings in the Jubilee Oilfield where the ruling government suspects foul play in what transpired in the acquisition of exploration rights by Kosmos and EO Group. A different case has to do with the abrogation of the contract of Norwegian Oil Giant, Aker ASA in exploration activities in the Jubilee Oilfields by the Ministry of Energy as reported by the New Crusading Guide on January 26, 2010. All in all, one thing is imperative that the country as a matter of urgency needs to settle these discords in order not to taint her business investment climate. This development is very crucial especially when it goes international. It is a fact that the above factors are known to fuel discords in oil-rich regions and we should spare no effort in dealing with these delicate issues.

What should be expected?

Considering the fact that oil revenues do not necessarily translate into benefits and enhanced livelihoods in the short term, it is imperative for the country to contain the upsurge of these expectations that have even triggered tremendous unscrupulous sale of lands by some chiefs. Again, there are recorded formations of youth groups with their motives clearly unknown. It is also reported that rents have been increasing in alarming trend. The youth are striving to have their respectable share in employment and also investors are invading Sekondi-Takoradi and other neighbouring communities for vibrant business opportunities. Do you know of what expectations left unattended to can result?

The article, therefore, seeks to reveal to Ghanaians the importance and the need to control these wild expectations.

The expectations of oil find naturally may result in forced out-migration and in-migration with its attendant population pressures and environmental pollution or degradation. Again, the hype of the emerging oil and gas sector in the media has increased the awareness of the local people and what they stand to gain. Government and transnational oil companies’ promises to the people have also exacerbated the horizons of expectations. With the influx of both skilled and unskilled labour to the Western Region, unemployment is anticipated to be on the ascendancy considering the fact that offshore and even downstream production needs technical qualified experts of which the youth may be unfit. In the production of oil, resource-rich regions may feel that they have a claim on oil wealth and may be aggrieved if they see the wealth leaving their region and benefitting others. When these problems of unemployment and perceived regional underdevelopment occur, the grievances of the people assume a scary dimension. This is because there is a complete contradiction of their expectations and what actually is happening on the ground. It is worthy of note that these unlimited grievances with other factors including environmental pollution that put life at risk have resulted in the formation of rebellious movements that tend to fight for their welfare and the development of their communities. Such grievances or complaints are believed to have been raised in oil-rich regions like Cabinda and Doba in Chad even before the formations of rebel groups like the Front for the Liberation of the Enclave of Cabinda (FLEC). One can talk of the civil wars in Chad as a result of these unaddressed grievances.

Managing these expectations

It would simply be uncharacteristic of a country whose democratic credentials have been touted in the world for similar fates in Angola and even Nigeria to happen. It is an awful experience that ought to be nipped in the bud. There is therefore the need for Ghana to intensify her efforts to contain these but misplaced expectations.

It rests on the government, non-governmental organizations and civil society groups to educate all or majority of the people on what pertains in the oil and gas industry. The education would serve to open the eyes of the people on what really exist in the sector so as not to act on the dictates of ignorance. It should be made clear to the people what opportunities exist in the upstream, downstream and various ancillary services. That’s why it is important not to neglect local content of the sector. It is creditable and a bright step that the government has proposed to establish the Oil and Gas Business Development and Local Content Fund to cater for the welfare of Ghanaians in the oil sector. This would address the concerns and grievances of the people to curtail any inimical development. The path of local content would best be safeguarded when the people have the adequate knowledge of what to do with available opportunities. In a different dimension, the government, civil society organizations and non-governmental organizations should respond by directing the skills of the youth to meet the opportunities that would be created. By virtue of the fact that oil developments require technical expertise, the local people should be trained in those aspects to meet the demands of transnational oil and gas companies. This will serve to match the growing expectations to their appropriate solutions. The uneducated or untrained cannot be made to operate installations and machines or benefit from ancillary services.

It is a known fact that neglect of increasing expectations of the people in the oil sector has been very disastrous especially when they are not met adequately. It is best to contain Ghana’s oil expectations by playing down those expectations. This does not mean to neglect welfare of the people but investing in infrastructure and industrial development to create more jobs for the discontented youth. Grievances are best addressed when distribution of oil wealth bridges the wide gap between the poor and rich on one hand and underdeveloped and developed regions on the other hand. I would therefore urge the government and multinational oil companies to set aside a ‘special fund’ that would purposely be used in educating the people at the coastal communities on developments of the oil and gas sector. They should also be urged not to put all their hopes in oil gains.

Conclusion

Controlling and managing growing (but misplaced) expectations is one all-important but neglected factor that contributes significantly to the curious phenomenon, the resource curse. For now, this should be the ringing agenda for both the government and oil companies especially when Tullow Oil Ghana Limited has asserted that they are 298 days away from pumping the first oil for export. Let us make clear the short and long term opportunities available in the industry to the people. The country ought to also settle the grim differences and tensions (Kosmos/EO Group and Aker ASA) that now pertain in the sector before commercial production begins. There would be no need for a local content plan if the people are oblivious of what goes on in the oil and gas sector.

The author, Stephen Yeboah is at the Department of Planning, Kwame Nkrumah University of Science and Technology, Kumasi-Ghana. [[email protected]]