Feature Article of Monday, 25 May 2009
Columnist: Otchere-Darko, Gabby Asare
This article argues that in the excitement surrounding President Obama’s July visit to Ghana, what has been missing is an analysis of what is in it for the United States, an understanding of which is crucial for Ghana if it is to capitalise on the immense opportunity provided by this trip. Highlighting the significance of the deepwater oil find in 2007, the article sets out why Ghana is now the subject of strategic U.S. energy and military interests which, as far as the Obama administration is concerned, has raised the stakes considerably in Ghana–United States relations. As the potential gem in the crown of what Washington terms Africa's ‘New Gulf’, the article highlights how Ghana’s pending oil-rich status will shift the terms of negotiation during the trip. Furthermore, America’s preference for Ghana as the physical location for the U.S. African Command (AFRICOM) headquarters, and its concern not to cede strategic ground to China in this region, mean that in 2009 Ghana has an unprecedented hand of cards to play in this game of international diplomacy. Our task as a nation – and the Government’s task as our representatives - is to make the strategic decisions to ensure that we aren’t simply the honoured recipients of President Obama’s first visit to Africa, but that we come away with more concrete deliverables to help us meet our own strategic goals.
Not since the inauguration of Nelson Mandela as President of a free South Africa has the election of a national leader generated so much global interest and excitement as Barrack Obama’s last November. It was therefore predictable that the announcement of President Obama’s trip to Ghana from 10-11 July would attract extensive media coverage as the first state visit by the first ‘black’ President of the United States to any African state.
While cool heads maintain it is a result of Ghana’s enviable role as a beacon of hope in the continent, proving that multiparty democracy can work in Africa, others have added a partisan spin to the visit, alleging it is because President Mills has shown a greater commitment to fighting the drug barons, which has led to cocaine being in short supply.
The U.S. Government itself states the purpose of the visit is: “strengthening the U.S. relationship with one of our most trusted partners in sub-Saharan Africa, and to highlighting the critical role that sound governance and civil society play in promoting lasting development.”
But who is talking about what is in it for America?
US-Ghana relations in the past Ghana has enjoyed a strong relationship with U.S. ever since the first American Peace Corps volunteers came to Ghana in 1961, the same year that President John F. Kennedy created the U.S. Agency for International Development (U.S.AID) to assist the developing world (aside from a blip in the mid-1980s during the Soussoudis spy affair). Indeed, the setting up of the U.S. Department of State's Bureau of African Affairs in 1958 was largely informed by Ghana becoming the first black African nation to gain independence the previous year. But for the next three decades, Africa was little more than a geo-political lebensraum for proxy campaigns of the Cold War. It was not until March 1978 that sub-Saharan Africa witnessed its first ever state visit by an American President, Jimmy Carter, who first met President Olusegun Obasanjo in Lagos, Nigeria, and then President William Tolbert in Monrovia, Liberia, a country the United States established diplomatic relations with 147 years ago for obvious reasons.
Bill Clinton’s visit to sub-Saharan Africa in March 1998 was the first by a U.S. president in 20 years. His successor, President George W. Bush, visited the continent twice in eight years and it was even said that Africa was the place where he felt most comfortable and welcome. He returned this by pushing for the implementation of the African Growth and Opportunity Act (AGOA), which was passed just a year before his predecessor handed over to him. This was followed by initiatives of his own for Africa that earned him respect in the eyes of millions of Africans, including the President's Emergency Plan for AIDS Relief (PEPFAR) in 2003 and the Millennium Challenge Corporation, which has thirty-two African countries on its development assistance radar. Under President Bush’s watch American assistance to Africa quadrupled since 2001.
The significance of July’s visit
Against this backdrop, July’s U.S. state visit is significant for various reasons. It will be President Obama’s first to Africa – a continent that has not only personal significance for Obama the man, but growing political significance for Obama the President - and one that has significant expectations of the first black President to sit in the Oval Office.
For Ghana, Obama will be the third successive American Presidents to have visited in the space of 11 years, confirming the significant position Ghana has assumed as a role model for the continent,. That Obama’s first visit is to one of Africa’s unquestioned success stories rather than one of its examples of stalled development or conflict zones, will draw attention to the fact that there is proof right here in Africa that freedom can serve as the means to development and multi-party democracy can work. Ghana’s extraordinarily consistent economic growth pattern for the past seven years (registering a GDP of 7.3% in 2008) offers the best evidential advertisement for the new development paradigm, which seeks to show that not only can freedom and development go hand in hand, but that the former provides a helping hand to the latter.
But we must not ignore America’s interest. After all, whatever his connection to the African continent, Obama is President of America – and acts in the interest of its people at home above all else. So what can Americans hope to gain from President Obama’s trip to Ghana?
First, this trip offers a very compelling platform for America to reaffirm to a significant mass of the world the triumph of its values of liberal democracy, rule of law and freedom. With the U.S.’s failure to impose these in the Middle East, and China’s irksome demonstration that economic progress can be achieved without them, Ghana helps bolster the U.S.’s argument about the centrality of these values to the development process.
But the decision to embark on this trip was also made on the basis of some tangible and concrete opportunities for America in the region.
Top on the list is the United States’ military and energy security agenda. Before the 9/11 bombing in 2001, conventional thinking in Washington perceived no vital strategic interests for the U.S. in sub-Saharan Africa. But this has changed. Today we can see a significant shift away from America’s traditional geopolitical calculations regarding oil production and supply. The U.S.’s National Intelligence Council (NIC) estimates that by 2015, 25 percent of American oil imports will come from West Africa, compared to 16% today – an estimate even considered as too conservative in some quarters. Already West Africa supplies as much oil to the U.S. as Saudi Arabia. Furthermore, our oil is light and sweet, making it easier and cheaper to refine than Persian oil. Plus its offshore location reduces transportation costs and minimises risk of political violence and terrorist attacks.
This shift in global energy patterns to the Gulf of Guinea has led to a significant re-evaluation of foreign policy focus and global alliances, resulting in a multi-layered engagement with countries such as Ghana, that encompasses military and energy security, and development aid. This trip is thus at the heart of Washington’s strategy of working with its regional allies in West Africa to develop relationships that will secure its energy security in the long term.
The United States, in typical Dick Cheneyic oilthink, sees the Gulf of Guinea as offering the opportunity to break with the old politics which saw the U.S. at the mercy of the geostrategic pressure of unstable or unfriendly oil-producing states in the ‘old’ Gulf (Persian Gulf) and Venezuela.
The way forward is a pro-active policy to build a new Gulf of energy security and prosperity in a part of the world that is relatively receptive to American presence. With significant discoveries being made in the Gulf of Guinea oil basin, off the coast of Ghana, Equatorial Guinea, Congo and Cote d’Ivoire, according to the Energy Information Administration of the U.S. Department of Energy, the United States will be importing in the year 2020 over 770 million barrels of African oil a year. And Ghana with its stability, notable responsiveness to America, deepening multiparty democracy and promising investment climate is seen as the perfect epicentre for the growth and fulfilment of this interest. In the eyes of America, geography, geology and ideology all favour Ghana as the gem in the crown of this new policy.
What about China?
But the U.S. is not alone in seeing Africa as a better bet to provide a secure source of energy. There is a new scramble for Africa’s raw materials, especially energy resources, brought on by China’s astonishing industrial growth and its deepening influence in the global economy. It is the second largest consumer of oil in the world behind the United States. Consistently high economic growth rates saw Asia’s formerly largest oil exporter switch to become a net importer of oil since 1993. The International Energy Agency projects China's net oil imports will jump from 3.5 million barrels per day in 2006 to 13.1 million barrels per day by 2030.
In 2006, 9 percent of Africa’s oil exports went to China (with 60% of Sudan’s oil export China-bound). The U.S. received 33 percent. Already, China has sped past Britain and France to become Africa’s second-highest trading partner behind the United States.
Though Angola, the second largest oil producer in sub-Saharan Africa, supplies the U.S. with approximately twice as much oil as it does China, China has outpaced the United States in partnering Angola’s rapid development with its multi-billion dollar investment support in the country’s infrastructure. For example, in 2006, Sinopec, China’s state-owned energy company, bid $2.2 billion for two deep-water blocks off the Angolan coast. Two years earlier, Beijing softened the ground with a $2 billion package of loans and aid to Angola, which has Chinese companies building telecommunications infrastructure, roads, railways, bridges, buildings, schools and hospitals.
However, in 2007, Erica Strecker Downs of the Brookings Institute think tank made some headway in calming American anxiety over China and African oil. She wrote that contrary to public opinion, China's NOCs are not "locking up" the lion's share of African oil as part of a centralised quest for energy. But while China, with a mere 3% of its FDI in Africa and controlling under 2% of oil reserves on the continent, may not be winning the race for oil exploration and production in Africa, there is no question that China is winning more and more of the oil supply produced in Africa.
If the U.S. wants to out-muscle China in the 21st century scramble for Africa, then it will have to show more aggression in investing in the development of infrastructure on the continent, as China is doing. Even if American money comes with job for American companies, Africans are not likely to complain so long as it ends in the brick and mortar of the continent’s infrastructural development. Africans believe they are increasingly feeling more and more the positive might of Beijing in their quest for advancement. Chinese investment deserves a big part of the credit for Africa’s highest ever economic growth rate, 5.8 percent in 2007. Furthermore, China has cancelled $10 billion in bilateral debt owed to it by African countries.
Outside of Ghana’s oil exploration and production zone, the U.S. and China’s involvement in Ghana’s development has been most obvious in two major infrastructural projects in the energy sector. The first, the West African Gas Pipeline (WAGP), is 59% owned by Chevron, the U.S.-based oil multinational company and Royal Dutch Shell. This $700 million onshore-offshore pipeline will run 681km from the Western Niger Delta of Nigeria via Benin and Togo to Ghana, and was cooperatively underwritten by the World Bank in 2004. The Bank, however, refused to underwrite the Bui Dam project designed to generate 400MW of electricity for Ghanaians. It took a 2006 visit to President Hu Jintao of China by President J A Kufuor to secure Chinese support for the Dam’s construction (by Sino-Hydro) and funding (Exim Bank) at an estimated cost of $600 million.
These two projects highlight the masterful diplomacy that the Mills’ administration will need to deploy in the coming years in order to secure optimal benefit for Ghana from its new oil-rich status.
How Ghana must utilise its new strategic importance With the discovery of significant oil potential offshore, Ghana has not only new international importance – we also have cause for greater confidence and strength in our global interactions. The increased interest of both China and the United States in Ghana can add extraordinary oomph to Ghana’s development – but this can only happen if we become smarter, more strategic and more assertive in our dealings with these two powerful nations.
The Obama trip reinforces the extent of U.S. strategic interest in the country. Ghana has become an object of international desire between the two super powers of the 21st century – America and China – and the Americans are in no mood to lose its ‘trusted partner’ to the Chinese.
The Americans know what they want from Ghana. But does Ghana know what it wants from America? The question is: has the Ghanaian Government taken a considered, sober decision on the price to be paid and the prize to be gained for being considered as the serene oasis at the heart of the ‘New Gulf’? President Obama came into office with the strategic objective of “investing in a shared humanity” with regards to U.S. policy in Africa, listing his three thematic policy areas of focus as: i. to accelerate Africa's integration into the global economy ii. to enhance the peace and security of African states iii. to strengthen relationships with those governments, institutions and civil society organisations committed to deepening democracy, accountability and reducing poverty in Africa.
He may well be the President who can make a bold resourceful contribution to see the realisation of the dream of an African nation breaking though the stigma of underdevelopment to act as a trailblazer for the others. Ghana has the potential to serve as this model – but it will require a wholesale adoption of a new attitude of assertiveness based on a well-founded confidence in what we bring to the table, and a permanent shift from the outdated and counterproductive assumption amongst Ghanaians that our country is simply a geographical mass of humanitarian concerns or a charity case.
But has the mindset of the Ghanaian leadership gravitated towards this new reality?
Global economic positioning
As Ken Ofori-Atta of Databank stated at Chatham House recently, “We have not seen such massive destruction of wealth in the history of modern civilisation and I might add also such rapid recreation of capital in the past year. Africa is truly astounded at how quickly the West can mobilise to save their companies when a fraction of those amounts could reinstate the impressive growth trajectory which Africa had achieved.” The rich economies are prepared to spend $2 trillion to rescue their financial infrastructure. For nearly a decade now, Africans have been demanding extra funding to the tune of $60 billion a year to accelerate its development – a mere 3% of what is being pumped into the western financial systems today to maintain socio-corporate standards there. The UN Under-Secretary General and Executive Secretary of the Economic Commission for Africa, Abdoulie Janneh, said the current economic downturn could cost Africa $251 billion in 2009 and $277 billion in 2010 in export earnings, despite earlier predictions that the continent would not be hard hit. So whatever is on offer to countries like Ghana by the IMF and World Bank only follows the old pattern of development assistance never matching what is taken out from Africa. Unfortunately, once again, (a little over a year after Ghana issued its first sovereign bond on the international capital market) we have been forced by exogenous circumstances to make a u-turn to over-dependence on the Bretton Wood institutions for our development spending. And we are being told to adopt a kind of fiscal discipline which the developed world is also finding to be fundamentally contradictory to their programme for stimulating their economies today. Much noise has been made both in Ghana and elsewhere about Ghana’s ‘extraordinarily huge’ 2008 budget deficit of 11.5% of GDP. Indeed, the Ghanaian government has allowed it to serve as a roadblock in the way of maintaining, let alone increasing, the momentum of development Ghana has experienced in the last seven years. It is worth noting that in America the Congressional Budget Office estimates that the U.S. budget deficit will reach $1.85 trillion this year, 13.1% of GDP. Furthermore, they project deficits averaging over $1 trillion a year for the next 10 years, which will raise the U.S. public debt-to-GDP ratio to over 80% by 2019. Ghana’s total public debt stood at $7,742.4 million in May 2009, representing a debt-to-GDP ratio of 49.2%. Both huge budget deficits were necessary responses to national crisis and imperatives. In Ghana’s case the energy crisis of 2007 and the urgency with which Ghana needs to invest in its infrastructure and respond to a rising cost of living contributed to our unusually high deficit.
In July 2005, when heads of the world’s leading industrialised countries (the G8) pledged to step up development aid by $50 billion by 2010, with half of the increase going to Africa, African leaders hailed it as a significant high-gear shift in development aid from the developed world. Barely four years later, what we know today is that a lot more money can be found for productive investment to push millions of Africans out of poverty. U.S. development assistance to Ghana in 2007 – about $55 million – was nowhere near that befitting a nation carrying the kind of strategic weight that contemporary Pentagon thinking suggests. In real terms it is little improvement on the 1994 assistance of $38 million, plus $16 million in food aid. President Bush contributed an extra $547 million support from the Millennium Challenge Account. But this was given when America’s strategic flirtation with Ghana was purely based on its interests in Ghana as a geographical location for AFRICOM rather than the additional oil value it has today.
What has all this to do with Obama’s trip?
Negotiations are not held in a vacuum. A nation that sits around the table without prior knowledge and appreciation of its own strengths and weaknesses in its counterpart’s mind has provided gaping holes in its negotiation armoury and is bound to come out with a bad deal. A good deal depends on both an understanding of the cards in your hands and your opponent’s, and the skilful and strategic play of these cards. The first of these cards that the Ghanaian government must not fail to appreciate is the fact that Superpower America now sees West Africa as a zone of strategic importance – it’s no longer a question of just us needing them, but they now also need us.
Our trump card is of course oil. But if we are to prevent ourselves being played by the U.S., we must deploy this to maximum benefit: ultimately it is up to Africans to selfishly see our oil as means to provide energy security to others in exchange for support for more rapid African economic development.
In the words of U.S. Congressman William Jefferson, “The strategic question is which countries we depend on for this oil. The suggestion that comes out of all of these discussions is our best partners are in West Africa for many of the reasons I’ve mentioned: the commitment to democracy. Though there may be strivings and failings, nonetheless there is a commitment. West Africa is closer, making it easier to move product from there to here; the resources are, in most cases, not landlocked. Things usually work fairly well if you’re out in deep water.”
Since 2007, Washington has become more convinced that the Gulf of Guinea is an area of “Vital Interest” and Ghana is in prime position to serve as its hub, a point reinforced by the seemingly smooth transition from one democratically elected government to another of a different party.
Furthermore, the U.S. is, understandably, bent on establishing a regional command for Africa, similar to U.S. Forces Korea, with a homeport situated on the African continent to protect their interests. West Africa is its natural home, given the need to protect energy interests in the Gulf of Guinea. Liberia has offered but simply cannot match the kind of convenience available in Ghana. It can be a win-win situation.
AFRICOM can protect U.S. investments in our region. But, those investments (regardless of our percentage share of ownership) are also fundamentally our investments – and thus the assistance in their protection will be a welcome boon. U.S. military presence can also help improve the level of military professionalism of our already well-respected troops. It is interesting to note that in the six decades since World War II in which America has maintained a military presence in other sovereign nations, none of the host nations has suffered instability or military takeovers, as the presence of U.S. troops helps entrench the subordination of soldiers to civil leadership. Moreover the presence of U.S. troops boosts social and economic activities in the host countries, too.
The loudest argument against Ghana hosting AFRICOM when the possibility first arose was that it would make us a target for anti-American terrorists. But a global examination of the number and location of American military bases overseas vis-à-vis the geographical targets of terrorist attacks, shows that this argument has far greater emotive value than evidential corroboration.
At the moment the Americans say they are happy to keep the U.S. Africa Command headquarters in Germany, to coordinate all U.S. military and security interests throughout the African continent. But any reasonable assessment must conclude that this can be nothing but a temporary address and arrangement. Ghana should welcome that it is thus the target of America’s desire – and we should make the most of this, using it for our own advantage. After all, the process has already started.
The U.S. and Ghanaian militaries have cooperated in numerous joint training exercises, including the African Crisis Response Initiative, an international activity in which the U.S. facilitates the development of an interoperable peacekeeping capacity among African nations. And the head of AFRICOM has already reaffirmed Washington’s commitment to assisting the Ghana Armed Forces “to become more robust”. There is also the African Contingency Operations Training and Assistance program. Beyond that, Ghana and the U.S. have an active bilateral International Military Education and Training program. In 2007, Kwesi Pratt Jnr, the Managing Editor of The Insight newspaper and the energy behind the pressure group Socialist Forum, warned Ghanaians against what he saw to be the looming danger of a U.S. military base in Ghana. He cited, inter alia, the erection of the huge American Embassy complex in Cantonments as evidence of this. Meanwhile, in August 2007 Major-General Ward, who was later confirmed as AFRICOM’s first commander, visited Accra. He held discussions with President Kufuor on “ways of strengthening military cooperation.” His high-powered secret meetings with the President, Minister of Defence and the Chief of Defence Staff triggered huge speculation. Much was made of Maj Gen J B Danquah’s public statement about the visit when he said Maj Gen Ward had ‘done enough to resolve’ Ghana’s concerns about AFRICOM, adding, “I have had the chance to hear [Ward] explain what is the reasoning behind the command, and it’s all about partnership.”
General T. Hobbins, head of the U.S. Air Forces Europe, has held discussions with his counterparts here on the possibility of establishing “lily pads”, landing and rapid airlift facilities in otherwise deserted terrain in certain strategic sites in Africa. Tamale Airport has come up as one of the “forward operating sites” targeted. That airport is said to have a runway capacity of accommodating massive U.S. C-3 cargo planes and troop transports.
Ghana is also already the site of a U.S.-European Command-funded Exercise Reception Facility that was established to facilitate troop deployments for exercises or crisis response within the region. The direct link to our oil is only too apparent: the Facility came out of Ghana's partnership with the United States on what is termed a Fuel Hub Initiative. It may sound like a mere gas station for the troops. But the choice of stable, imminently oil-rich Ghana as a Fuel Hub reflects a greater strategic interest in the country than as merely a filling station.
The Americans have not been shy in establishing a clear economic link alongside their military cooperation. Ghana is one of the few African nations, mainly those with oil, selected for the State Partnership Program to promote greater economic ties with U.S. institutions, including the National Guard. Expanding this to deepen our cooperation with the Drugs Enforcement Agency is one other area that President Mills should focus attention on.
Ghana the ‘natural’ ally This all points to the fact that the United States sees Ghana as having all the vital statistics and morphological features of a ‘natural’ ally. We have the oil reserves, we are in the stable centre of the ‘New Gulf’ and we have the military discipline and stable atmosphere to make us the perfect hosts for America’s first major military migration to our continent. America is strategically placed to maintain and deepen its stronger footing here, ensuring it rather than China becomes our dominant ally. As one analyst confirmed, Washington has no interest in seeing China’s presence in Africa extended to Ghana. The fact, however, is that China is already here and the recent dealings between the Mills administration and the ruling Chinese Communist Party means the U.S. needs to act sooner rather than later.
Obama’s chief policy adviser assured Africans two months before the 2008 presidential race, “Barack Obama understands Africa, and understands its importance to the United States. Today, in this new century, he understands that to strengthen our common security, we must invest in our common humanity and, in this way, restore American leadership in the world.” Now is the chance for him to seek and effect the real change that will finally show the world that Africans are capable of more than managing their own affairs – but, crucially, Ghana must take up the opportunity provided by the state visit and the U.S.’s burgeoning strategic interest in us, to be the nation that demonstrates this.
The author of the article is the Executive Director of the Danquah Institute, a think tank based in Accra.