You are here: HomeNews2011 01 21Article 201596

Opinions of Friday, 21 January 2011

Columnist: Alagbo, Mathias Kwame

Avoiding Oil Resource Curse In Ghana, A Myth Or Reality?

On Wednesday 15th December 2010 at exactly 09:45 GMT, the world’s attention was on Ghana as President John Atta Mills descended on the FPSO Kwame Nkrumah aboard a golden helicopter to ceremoniously pour out Ghana’s first oil and officially declare Ghana as a new member of the league of Oil producing Nations.
While there was pomp and pageantry with dignitaries including Traditional rulers and the two surviving former heads of State, Flt Lt. Jerry John Rawlings and Mr John Agyekum Kufuor gracing the occasion, there remained a lingering concern on the minds of many as to whether Ghana’s new oil find can bring happiness and blessings to the Nation or will lead to the manifestation of the much talk about ‘natural resource curse’ syndrome.?

As the President implored all Ghanaians to rejoice and celebrate the historic event of the new oil find, he seemed to be aware of the Challenges when he called on all appointees of his government to ensure that the oil find is a blessing to Ghanaians and further stressed that we as a nation are assuming very serious responsibilities hence the need to work hard and not rest on our oars.
The above concerns are very legitimate and requires attention in that Africa as a continent is endowed with renewable natural resources like water, forestry and fisheries and non -renewable natural resources like, coal, gas, oil, diamond, gold, bauxite etc which in all serves as a backbone for economies around the world, as well as being central to many livelihoods. Unfortunately, the same resources that have transformed deserts into blistering modern cities in Gulf States of Qatar, UAE, Saudi Arabia and Brunei among others have rather become a catalyst in turning Africa’s economic and social development in an anti clockwise direction with much pain, deaths and destruction in its wake.
Many schools of thought including this author contends that if Ghana can safeguard her democratic rule in the midst of the myriad socio-economic and political problems and challenges it faces while her sister nations around her are embroiled in the many wars and arm conflicts that are raging on, then yes, Ghana once again can show that oil and other natural resource finds can be a blessing and not a curse ‘‘if and only if’’ we can walk the walk just as we talk the talk.

To most students of security, the bridge between stability and chaos is a very thin line and as such Ghana is not too different from her neighbours like Nigeria, Sierra Leone and Liberia which are living examples of unforgettable memories of hardship natural resources can bring when such resources are not harnessed and judiciously applied for the benefit of all.

To avoid any chance of being caught up in a quagmire of oil related conflicts, Ghana must as a matter of urgency securitize poverty, deprivation, justice, political patronage and other rent seeking behaviours in the form of corruption which allow a few access to resources which are often diverted from fruitful economic activities to the detriment of the masses.

Often times, the ‘greed and grievance’ theory has been trumpeted as the causes of most natural resource induced wars in Africa and elsewhere. This is largely true, because whenever a combination of certain conditions such as large scale export of primary commodities, low level of education of majority and attendant high proportion of unemployed youth, economic decline and lack of opportunities for livelihood which is quite prevalent in Africa, conflict is bound to raise its ugly head.

A brief historical background to the Sierra Leonean carnage revealed the existence of the above conditions which existed for decades and acted as a catalyst that sped up the arm rebellion like a wild fire.
In her book World On Fire; How Exporting Free Market Democracy Breeds Ethnic Hatred & Global Instability, Amy Chua corroborates other Scholars assertion of greed motivated conflicts, when she described the reign of terror that destroyed Sierra Leone between 1991 and 1999 as ‘the deliberate handiwork of vicious, self-interested butchers and thieves’. She further noted that, the movement of the Revolutionary United Front (RUF) has no ideology and to her, the mission of the RUF led by Fodday Sankoh, was a blatant grab for power and wealth, through the mobilization of hungry, disaffected and angry teenage foot soldiers from a destitute, demoralized, 70 percent illiterate provincial population that for years had seen the nearby diamond mines generating fantastic wealth for politicians and a handful of Lebanese cronies. The exploits of Fodday Sankoh as observed above was largely possible because the masses have been neglected for so long that the youth became hopeless and helpless and all a rebel leader needs to promise them was ‘jobs’ and ‘a better tomorrow’ to gain their loyalty.
A critical analyses of the Niger Delta conflict in Nigeria showed similarity to the Sierra Leonean situation where greedy and vicious rebels are able to recruit hopeless youths who have given up on life as corrupt politicians have allegedly colluded with foreign conglomerates in a symbiotic relationship to siphon off the wealth into individual pockets while paying little attention to the populace especially those directly affected by the oil exploitation through pollution, degradation and poisoning that arises from toxic chemicals and spillage of oils thus denying them any means of livelihood.

Dealing with the issues of deprivation in the catchment areas of Ghana’s oil find deserves serious attention as extreme inequalities both in income and standard of living in a society often leads to violence, civil unrest, political and economic instability.

As the oil production in the Jubilee filed is taking shape, the residents of Sekondi/Takoradi metropolis and its environs have began to feel the heat of rising cost of living. There are reports of rents being doubled and landlords ejecting tenants so they can rent their houses to the highest bidder notably, the financial institutions and other service providers which is already leading to unusual tension.

Farming and fishing which has been the main occupation of the people of western region are now facing serious threats as a result of the oil find. Fishermen, who for generations derive their livelihood from fishing activities now faces restrictions in their operations as the need to secure and protect oil production facilities becomes paramount.

A news report carried by myjoyonline on Tuesday 11th January, 2011 edition reveals that, several thousands of farmlands in the Western region are facing the threat of extinction as both government and private multinational organizations seek vast tracts of land to build facilities ranging from refineries to gas processing plants to support the country’s emerging oil and gas industry which as a matter of fact has implications for food production.
Even though it is understood compensation will be paid for these tracks of lands, the question is what happen next to these inhabitants in a couple of years after squandering these compensation packages? Will these farmers acquire new plots and continue with food production to support the economy? My guess is that some of these farmers may give up farming for good which in turn raises further question as to whether they have the necessary skills and qualifications to participate in the new oil economy? One will want to find out what intervention measures there are now in place or in the pipeline to cushion the vulnerable that have no chance to participate in the industry but will be severely affected by the expected sky rise cost of living?

The tendency of corruption to thrive is high and equally requires serious attention as this has been the main reason why for decades, African countries with oil and other natural resources have very little to show in terms of improved standard of living for its citizens and real economic growth.
The 2004 Human Right Watch report claims that in Angola for instance, '$4.22 billion in oil revenue went missing between 1997 and 2002 apparently stolen by State actors, a situation that led to civil unrests and inequality rises with over 70% of the population living below the poverty line. The Nigerian and the Sierra Leonean cases bore similar footprints of corruption where state actors allegedly divert resources to private accounts when the country cries for survival. Ghana can avoid this when politicians and policy makers can adequately account for our oil money and its utilization is done in an open and transparent manner leaving no room for suspicion and complaint.

People’s predisposition to conflict at times stem from the fact that, there are very limited or no mechanism to address their grievances. In the Niger Delta of Nigeria, the inability of the federal government to address the grievances of the locals ranging from pollution of water bodies, oil spillage to deprivation of the means of livelihood encourages many to resort to arm conflicts to seek justice. It is in this light that the role of state institutions and civic society organizations will be key to avoiding oil conflicts in Ghana. Reports of spillage, degradation and poisoning of water bodies by gold and other mineral mining companies in this country has been reported every now and again but the question is do we as a nation have adequate mechanisms in place to respond and ensure justice for our local people when they cry out?. Are the legally mandated institutions of the state like the Environmental Protection Agency, the Police and the Courts proactive, fair and firm enough to ensure all stakeholders play by the rules? Are these institutions independent enough to respond without fear or favour no matter how powerful or powerless any of the parties’ maybe?
Ensuring that the necessary laws that safeguard the petroleum industry which clearly spells out rights and responsibilities of various stakeholders in the production and management of the oil will go a long way to help. Our justice systems require capacity building to deal with the grievances and misunderstandings that will arise between the multinationals and the local communities in which they operate. It must be pragmatic and responsive to every concern of all stakeholders. Fairness must be ensured and law to work for all.
It must be noted that when our justice system becomes fair and the rule of law, transparency and accountability prevails, it will make it very difficult for corruption to flourish in the first place.

Countries like Canada, Australia and Norway have enjoyed peace, stability, growth and development because of strong institutions that safeguard the exploitation and usage of their natural resources and as such Ghana can learn from them.

There are no short cuts to achieving development and avoiding ‘natural resource curse’ and as such only a bold, dynamic, and a visionary leadership can deliver these through making and taking of hard but pragmatic decisions to safeguard our future as a nation. God bless Ghana.

Authored by: Mathias Kwame Alagbo