Ghanaian riches for oil multinationals, poverty for the people?

This video is called The people of Nigeria versus Shell (English).

From the Ghanaian Chronicle (Accra):

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.

Multinational Companies

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.

Environmental Problems

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.

The Monetization of Mozambique’s Natural Gas Reserves: here.

19 thoughts on “Ghanaian riches for oil multinationals, poverty for the people?

  1. Media Foundation for West Africa (Accra)

    Côte d’Ivoire: Clampdown On Journalists Intensified

    26 July 2010

    Patrice Pohe, journalist and a communication adviser of Raymond Tchimou, the state prosecutor, was on July 21, 2010 arrested and detained on the orders of his boss for allegedly leaking the report about embezzlement in the cocoa and coffee sector of the country to the privately-owned Le Nouveau Courrier newspaper.

    The Media Foundation for West Africa (MFWA) correspondent in Cote d’Ivoire reported that Pohe’s arrest followed a long grilling session with Allan Alliali, managing editor of privately-owned Le Quotidian newspaper.

    The correspondent said the two were interrogated separately before another face-to-face session for nearly for nine hours. Pohe was on July 17, interrogated together with Boni Rosine, secretary to the state prosecutor for about six hours. Pohe was expected to appear in court on July 23.

    The Plateau Court in Abidjan, capital of Cote d’Ivoire trying three detained editors of Le Nouveau Courrier, on July 23, adjourned the case to July 26 without reason.

    Meanwhile, the Ivorian police have scuttled a picket by the Ivorian Committee for Protection of Journalists (CIPJ) to protest the clamp down on journalists in the country. The police seized a camera and two cellular phones from the journalists and have since returned the equipment to them.


  2. African Confidential (London)

    Ghana: Storm in an Oil Barrel Over the Kosmos-ExxonMobil Sale

    26 July 2010

    The grand launch of Ghana’s commercial oil production this year has begun inauspiciously with a bruising battle between the government and the state oil company on one hand and American oil company Kosmos Energy on the other (AC Vol 51 No 7). Kosmos had announced last September that it wanted to sell its stake in the country’s Jubilee oil field to the giant ExxonMobil corporation in an exclusive deal for US$4.2 billion. Since then, President John Atta Mills’s government has blocked the deal, initially because of a complex dispute between the Ghana National Petroleum Corporation and Kosmos about the company’s use of Ghana’s geophysical data in the sale negotiations.

    Yet the affair has taken a further political, and even geopolitical, twist. This year, Attorney General Betty Mould-Iddrissu has charged Kosmos’s local partners, EO Group, with contravening corporate and anti-corruption laws. EO, which drew up the original petroleum agreement, had brought Kosmos to Ghana and secured a 3.5% interest in the West Cape Three Points oil block which it helped Kosmos to negotiate with the GNPC in 2004. In a further complication, the two EO directors, George Owusu and Kwame Bawuah Edusei, are friends of former President John Agyekum Kufuor, under whose government their oil contract was secured, and strong supporters of his New Patriotic Party (NPP).

    Should the Kosmos sale go through, Owusu, Edusei and any other beneficial shareholders in EO may gain $200 million and so become Ghana’s first oil multimillionaires. Many loyalists in Mills’s National Democratic Congress fear that Owusu and Edusei may use the windfall to fund the NPP’s next election campaign and secure a huge advantage over the incumbent but financially shaky NDC. Such concerns prompted America’s Anadarko, which works in Ghana, to commission a due diligence report on EO’s relations with GNPC and the government. Anadarko sent the 1,200-page report by Washington lawyers Willkie Farr & Gallagher to the United States Department of Justice (DOJ) to check whether any US company in Ghana would violate the Foreign Corrupt Practices Act if they went into partnership with EO.


    After that, the DOJ launched a nine-month investigation into Kosmos and EO operations. This June, the DOJ told both companies it had completed investigations and would not pursue a prosecution. However, Mould- Iddrissu says she has enough evidence to prosecute EO. Although GNPC categorically rejected the Kosmos sale to ExxonMobil in June, both US companies maintained direct contact with the government. Last week, at meetings with Mills’s team in Osu Castle, ExxonMobil put forward new proposals which appear to have persuaded Mills to give them another hearing. Under pressure from both detractors and promoters of the ExxonMobil deal, Mills has formed a committee to examine the options and report back within the month.

    Some insiders claim that setting up the committee is a tactical defeat for GNPC but others say Mills wants to spread the blame for the final decision by taking the widest possible soundings. Whatever he decides, he will face organised opposition. If he approves the Kosmos-EO sale, his own NDC supporters will slam him for rubber-stamping a Kufuor-era deal which might hugely benefit his political opponents. Yet if Mills rejects the deal, he will face opprobrium from the NPP and many business people, who were hoping for substantial commercial gains if ExxonMobil comes to Ghana.

    Mills and his government would have to be convinced that any alternative strategy to the Kosmos-ExxonMobil sale would generate more revenue and contribute more effectively to the integrated oil and gas industry the government wants. In turn, this pressures the committee to produce a convincing conclusion and strategy to break the impasse. This week, it discussed the ExxonMobil offer in detail; next week it is likely to hear the terms of a possible offer fromNorway’s Statoil in conjunction with the China National Offshore Oil Corporation (CNOOC).

    Few details have emerged about the Statoil-CNOOC offer but it is thought to include financing provisions for downstream development, such as a refinery and a petrochemical plant, and a mechanism to allow GNPC to take another 3% equity in the Jubilee field. Mills has pulled together an experienced group with some past and present NDC ministers. Chairing the committee is the former World Bank Vice- President and current Executive Director of the International Growth Centre at the London School of Economics, Gobind Nankani. Alongside him are former Finance Minister Kwesi Botchwey, former Prime Minister Paul Victor Obeng, Trade Minister Hannah Tetteh and GNPC Director Kyeretwie Opoku.

    The committee may wonder how a commercial dispute between GNPC and a small US oil company escalated into a dispute that risks damaging diplomatic relations between the two countries. Just over a year ago, US President Barack Obama chose Ghana for his first official African trip. Addressing Parliament in Accra, Obama praised Ghana’s record on governance and economic reform. Yet in March, The Wall Street Journal ran an opinion piece entitled ‘Ghana beats up on its biggest foreign investors’. It argued that GNPC’s opposition to the Kosmos deal was ‘capricious government meddling’ and the ‘kind of official thuggery more frequently associated with Nigeria’.

    Near the centre of this campaign is veteran Washington lobbyist Riva Levinson, who successfully managed press relations in the USA for Jonas Savimbi’s União Nacional para a Independência Total de Angola rebels in the 1980s and early 1990s. Some Ghanaians are amusing themselves by circulating an unedited promotional video in which Levinson declares: ‘We are either a problem-solver or a troublemaker…I have a company in Ghana, an oil and gas company that went and invested a billion dollars. Now the government of Ghana has changed the terms of the original agreement… for somebody like Kosmos Energy it’s knowing that I can go to the Assistant Secretary of State for Africa, the head of the International Financial Corporation [which has lent Kosmos more than $100 mn.], members of Congress and get them to advocate on the company’s behalf.’

    Behind the bluster, Ghana is losing time and revenue as the Kosmos/EO saga drags on, along with the chance to shape its own oil and gas development plan as global demand rises sharply. If Ghana makes the right choices it could develop into the region’s second-biggest oil centre, offering industry services and expertise to several new oil producers along the West African seaboard. Get it wrong, as Energy Minister Joe Oteng-Adjei warns, and Ghana will join the already populous ranks of badly managed oil-producing states in Africa.


  3. The Nation (Nairobi)

    Equatorial Guinea: Scrap U.S. $3 Million Obiang Prize, Rights Groups Tell Unesco

    Tamba Jean-Matthew III

    14 August 2010

    Human Rights Watch and 95 partner groups have urged Unesco to cancel the Obiang Prize at its next session in October.

    In a statement to the world body’s executive board members, the groups insisted that the prize be cancelled definitively “rather than simply postponed.”

    In June, Unesco agreed to delay the prize to allow for further consultation, following a public outcry from a diverse group across the world.

    The groups then thanked the body’s director-general, Irina Bokova, and the executive board for recognising their concerns.Offends standards and goals

    “A prize in President Teodoro Obiang’s name or supported by money provided by him offends the very standards and goals Unesco promotes,” the groups said in their statement.

    President Obiang of Equatorial Guinea along with his Congolese counterpart Dennis Sasso Nguesso are being pursued by rights groups in France for allegedly stealing public funds to purchase several palaces in France and elsewhere.

    Despite Equatorial Guinea’s vast wealth from natural resources — which gives it the highest per-capita GDP in sub-Saharan Africa — it has shocking low health and development indicators.

    And rights groups suspect that the dictator is using the ill-acquired wealth to fund the $3 million Obiang Prize that he wants Unesco to support.

    Instead, the groups want the $3 million offered by Obiang diverted to education and health in Equatorial Guinea.


  4. High hopes for Ghana oil field

    GHANA: Offshore oil fields operated by London-based Tullow Oil could more than double production to 250,000 barrels a day by 2014, the company announced today.

    Tullow’s first field off Ghana, Jubilee, started in November and should be producing 120,000 barrels a day by July, top executive Paul McDade said.

    Seperately the company chief Aidan Heavey reported that the firm has agreed with the Ugandan government the terms of a deal that will allow it to sell a portion of its oil licenses in that country to French transnational Total and China’s state owned National Offshore Oil Company.


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  13. Ghanaian oil workers face legal sanctions over industrial action

    Workers operating an oil production and storage (FPSO) vessel off the coast of Ghana, involved in a sit-in last month, have been threatened with legal action to recover the cost from their action.

    MODEC, the company threatening prosecution of the workers, carries out engineering, procurement, construction, installation, operation and maintenance of floating production systems. This also includes Floating Production Storage and Offloading (FPSO) vessels and Floating Storage and Offloading (FSO) vessels.

    The oil workers staged a sit-in demanding an end to the huge difference between expatriate income and Ghanaian workers’ wages carrying out the same tasks. The 27 workers on the FPSO vessel, Kwame Nkrumah, have been sacked, leading to calls for the strike to be expanded nationwide across the entire energy industry.


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