Democracy Drives Oil Debates in Ghana

Published on 7th December 2010

The reasonable debate about how future revenues from Ghana’s new oil find, ahead of its formal exploitation early next year, should be used for development is healthy. It is a lesson in Africa’s development process, where most pressing development decisions have been initiated without consulting the people. Of course, sometimes the debates veer off the urbane contours but the overall opinions are eclectically sound.

From Norway to Nigeria, examples have been cited to help Ghana manage its future oil revenues. Almost all the primary stakeholders that would be affected by the oil are involved - from traditional rulers, politicians to ordinary Ghanaians. Traditional rulers in the Western Region, where the oil is found, are asking for 10 percent from the oil revenues. All this enriches the oil debate.

E. Ablorh-Odjidja, the publisher of the United States-based, in a skeptical opinion piece mockingly entitled Collateralize oil, dismantle the future? darned that “it is “baloney” to recommend spending ahead of the oil revenue curve.” That is a good omen for a natural resource that has “cursed” some countries and brought untold suffering to its citizens. Nigeria’s Niger Delta region comes to mind.

Other minerals earlier mined in Ghana didn’t see such strong debates. Over hundred years ago, when gold was discovered and exploited, there was no credible national debate such as the one we are experiencing in 2010. Some people are calling for a review of agreements on these “old” minerals. This comes against the charged arguments that the future oil revenue should be “collateralized.”

In some parts of Ghana, some pupils hold classes under trees, a good number of houses in the capital Accra have no toilets and poor sanitation is a disturbing spectre. To collateralize the oil revenue for loans, the current Petroleum Revenue Management bill before Parliament has to be amended. The opposition National Patriotic Party is suspect of the ruling National Democratic Congress’ intentions, citing instances where such policy have been corrupted in places like Nigeria, Gabon, and Angola.

In most oil producing African countries, there was little debate about the use of oil wealth before the oil was exploited. In Angola, even after the oil started flowing, debate about the distribution of the oil wealth wasn’t encouraging. The oil find occurred in a one-party Marxist-Leninist system where accountability and transparency were not the watchwords. Angolans, just over 14 million and with oil revenues totaling around US$1.71 billion, say their oil incomes have not had any effect on them materially. Poverty is still widespread and the country is almost taken over by the Chinese.

Oil find in one of Africa’s top oil producers, Equatorial Guinea occurred in an atmosphere of brutal one-party system that resulted in deaths and displacements of its citizens. Equatorial Guinea’s oil revenues in the 1980s created one of the most supposedly wealthy and at the same time one of the most fraudulent regimes in the world. That has put the country on the edge that saw foreign mercenaries, led by Simon Mann, a British mercenary and former British Army officer, with the backing of some exiled Equatorial Guineans, nearly overthrowing the government in 2004.

Like Angola and Nigeria, most Equatorial Guineans live in abject poverty despite having a small population of just over 500,000. This is against the fact that in 2008, government revenue from oil and gas totaled about US$7.056 billion and real Gross Domestic Product growth estimated at 7.4 percent for 2008 and. per capita income rising from about US$590 in 1998 to US$2,000 in 2000, US$5,300 in 2004, and approximately US$10,000 in 2007, according to the United States Central Intelligence Agency.

Most Equatorial Guineans do not feel the huge oil income materially. For them, it is all-statistical gibberish and paper analysis and not the good life they expect from their oil wealth in their real lives as they see in the Norwegians and the Canadians.

As Equatorial Guinea, Nigeria and Angola negatively exemplify, the pillaging of natural resources is at the heart of Africa’s economic tragedy, and “not necessarily environmental one,” as people from Nigeria’s Niger Delta region will tell you, making assets for citizens prosperity embezzled for the enrichment of the few. As the Ghanaian oil debates demonstrate, the “struggle begins with the accountability of government to citizen.”

The Oxford University development expert Prof. Paul Collier explains that since 2003 “The Extractive Industries Transparency Initiative has been successful in pressing for the rights of citizens to know the details of resources revenues…a new civil society initiative, the Natural Resource Charter, compliments the Extractive Industries Transparency Initiative.” Collier hopes that the international system will force “natural assets to be harnessed to ending poverty.”

From the on-going oil debates, Ghanaians are drawing hard lessons from the international system. How these tough lessons would help Ghanaians benefit from their probable oil revenues will be determined by the enforcement of their emerging democratic tenets – accountability, freedoms, equality, transparency, the rule of law, human rights, very watchful mass media and an international system that will pressurize Accra to think well about the average Ghanaian’s well-being first and any other second.

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