Ghana: Oil Revenue for Whom?
Magbegor Ovie and Chris Twum
22 July 2010
Many Ghanaians are excited about the discovery of crude oil and its expected revenue. The general feeling is that money is expected to flow to all pockets; hence, politicians would be able to fulfill their election promises.
However, many may be thrilled but not majority and those with thinking caps; who know that all African countries with resources especially only turn out worst than when such resources where not discovered. Their reasons for not being excited is not far fetched, who will blame them? For years the benefit of gold, diamond, cocoa and other mineral export has not brought any seemingly benefit to majority of the country.
Rather majority still wallow in chronic poverty, with no access to water, healthcare, education, electricity with transport and other infrastructures crumbling. For years Ghana has received billions of dollars ($) from its gold export including timber and cocoa yet the living standard and lifestyle of its populace with most African countries has failed to improve.
Who then is gaining from its revenue? Probably the politicians, leaders and multi-national companies can explain better to the populace on whom resource revenue is benefiting most. Since most sub-Saharan African nations are prayerful Ghanaians inclusive; perhaps an immediate impact would be to pray more to reduce the damage that resources normally bring to its immediate communities. Such as: pollution, creating joblessness instead of gainful employment, the case of the Niger Delta region in Nigeria, a region of predominantly fishermen who have been rendered jobless without alternative due to crude oil extraction by government and multi-national companies sets a real example.
The question is will majority of the populace benefit from oil revenue when gold, timber and cocoa have not profited them. Though many forums have been and would still be organized on how to utilize crude oil revenue, yet the ones concluded so far have no blueprint on how to maximize oil revenue. It has probably turned into a political maneuverings by politicians and their cohorts at the expense of the majority.
Worrying is that Ghana’s oil producing neighbours in West Africa have not been able to utilize its oil revenue to the maximum. There are shout and cries of massive corruption and human rights abuses in neighbouring oil producing West African countries like the rest of Africa.
How will the country differentiate itself from the club of nations whose resources have become a curse than a blessing with the latest stealing un-covered in the cocoa sector?
Despite all steps being taken by the government to eradicate corruption/reduce it to the barest minimum. The corruption in most sectors of the country that are yet to be uncovered can set an example as to where the nation will go when oil revenue starts pouring into government coffers.
A country with abundant crude oil and gas resources that has received over $400 billion from the sale of crude oil has over 80 million of its population living on less than two dollar daily. More frightening is the Niger Delta region which produces 90% of the country foreign earnings has a very large pool of young able-bodied men unemployed; hence, militancy has provided a means of gainful employment for them.
This is what Nigeria can show for its oil revenue totaling billions of USA dollars poverty, increased crime and kidnappings including political instability in the country and a very angry population that no longer trusts its political leaders.
The oil producing and exporting countries of Angola, Gabon, Algeria, Libya and Equatorial Guinea are not any better. Millions of people in these countries live in abject poverty and in squalor conditions while the leaders live in opulence with luxury villas and numerous fat bank accounts in France, Switzerland, United States, Britain and their colonies of safe haven centers in Cayman Islands, Jersey and the rest.
Gabon, Equatorial Guinea & Congo
The affluence of political leaders from oil producing countries in Africa is amazing and unheard of even among political leaders from developed nations. This prompted a French judge to investigate how some African leaders launder and acquire properties in France. Much noise was made but the final outcome was expected they and their partners in world had their way once more at the expense of millions of starving people in their home country.
Late President Bongo of Gabon was suspected of having 59 posh apartments in France while President Obiang of Equatorial Guinea is believed to use of the country oil revenue to enrich himself, family members and close associates.
The President of Congo Sassou-Nguesso fares no better he is believed to have 18 apartments and have 112 bank accounts and several luxury cars all bought from stolen crude oil revenues. One can only wonder how much each of these leaders has in each bank account.
A US Senate investigation established that late President Bongo and his family spend up to $55 million dollars; these monies are mainly from crude oil proceeds. …
According to the Sunday Times, quoting a police probe report, the Bongos bought a mansion worth 18.8 million euros in Paris in 2007. The 21,528-square-foot home is in Rue de la Baume, near the Elysée Palace, the home of French president Nicolas Sarkozy. A Luxembourg-based company that bought the home is owned by two of Bongo’s children, Omar, 13, and Yacine, 16, and his late wife Edith.
United Nations report
There is nothing to show in any of the above mentioned countries that majority of the population has benefited from oil revenue. It’s a fact that citizens of these countries have fared worst off. Gabon has a population of 1.4 million people yet it was ranked 124 out of 177 countries in 2007 by the UNDP report on human development. According to the United Nations Development Program (UNDP), only 14 percent of Gabonese can afford a doctor’s consultation. Gabon’s total debt in 2007 stood at $2.5 billion including $ 1.1 billion owed to France, while the country imported more than 60 percent of its food with more than 30 percent of the population living on less than a dollar a day.
Fears for Ghana
The fear is that like her neighbours in the region there is a high probability that the flow of oil money into Ghana may encourage unscrupulous army officers and unelected Ghanaian leaders to take over the administration of the nation by force and drown democracy, breach human rights and suppress all dissents as happened during gold and diamond discoveries where army officers seized power overnight, stole as much as they could and mismanaged what remained of their loot with Ghanaians and the economy ultimately paying for their reckless corrupt actions.
Apart from corruption, there is the added danger that the flow of oil revenue will lead to the collapse of other vital sectors of the economy such as agriculture and tourism due to over dependence on oil revenue. Nigeria for example used to be major cocoa and other cash crop producing hub but the discovery of oil has led to the collapse of that vital industry. Such dependence on has lead to severe consequences in these countries such as: rising food prices, jobs and revenue losses.
There is hardly any diversification in these countries thus; when oil prices fluctuates in the world market there is nothing to cushion the effects making their economy unstable and bringing untold hardship to their citizens, Nigeria is a perfect example to what happens when oil prices fluctuates in the world market; only the ordinary citizen is in the best position to tell what they go through daily.
Almost all big oil companies operating on the continent also share the blame in this crisis because they have a long history of helping corrupt leaders launder their loot in foreign countries. Elf executives admitted paying late President Bongo of Gabon close to $55 million dollars through almighty Swiss banks, ever ready to do a disfavour to the troubled continent. There has also been an allegation by some senior company executive admitting to paying massive bribes to the following leaders Cameroon‘s Paul Biya and his counterparts in Congo, Angola and Equatorial Guinea.
In 2004 Royal Dutch Shell of Netherlands admitted fuelling corruption, poverty and violence in Nigeria and … June 9, 2009 has agreed to pay $15.5 million to the family of Ken Saro-Wiwa and the Ogoni eight for her complicity in their execution by the corrupt Abacha regime.
Their secretive and non-transparent dealings with corrupt governments are no secret. In Angola, Western oil companies such as BP, Shell, ExxonMobil and Chevron stand accused of refusing to reveal their annual payments to the Angolan government; a charge similar to those in Nigeria, Gabon, Congo, Algeria and E. Guinea.
What is worrying is that these are the very companies that are lining up to exploit Ghana’s oil and nothing shows that they will operate differently in the country.
There is also the fear of serious environmental degradation that oil activities will cause to its host communities as the case is in Nigeria and other African countries. The price will be huge; wells, lakes, ecosystems, rivers and soil will al be polluted. Livestock and manpower would also suffer the same fate. It should interest the Ghanaian public that $1.8 trillion dollars is the estimated destruction caused by multi-national companies yearly to the environment.
Africa suffers from a fourth of that. Nigeria is classical example of this where Royal Dutch Oil giant Shell has refused to effectively take care of its pollution. The answer of this act by Shell and its allays are the cases of unrest that has become the order of the day in the Niger Delta region. Perhaps their belief in prayer would see them through what is coming.
Ghana’s way out
Ghana should be able to avoid these issues that mark the African continent as being unable to rule and manage its resources favourably. This can be achieved by critically studying and analyzing what went wrong in those other countries.
Global Justice Now food sovereignty campaigner Heidi Chow talks to Ghanaian activist Samia Nkrumah about the privatisation threat to the country’s vital small farms: here.
Following a century of colonialism, contemporary neoliberal imperialism is the cause of many of the crises ravaging Africa, writes Ayo Ademiluyi, with particularly harsh consequences for Nigeria’s working class. With oil accounting for over 90 per cent of government revenue, local industry has collapsed, leading to widespread unemployment and increasing poverty. As child and maternal mortality rates continue to increase and life expectancy decreases despite the wealth oil exports have brought the government, Ademiluyi calls for the workers’ movement to galvanise itself to transform society: here.