Ghana - Object of international desire

GHANA - The complications of being an object of international desire By William Wallis

Success stories in Africa are rare enough, and Ghana’s had drawn in a queue of foreign suitors wanting to share a piece of it long before the discovery in 2007 of oil. They have been an eclectic bunch – from sandal-wearing UK graduates seeking a safe adventure in Africa and African Americans retracing their roots, to battalions of development experts and hardnosed South African miners drawn by the glitter of gold.

Now Norwegians, Trinidadians and Kuwaitis, among others, are all offering Ghana advice on how best to manage its forthcoming oil wealth. In recent years, as the country became one of several West African way stations for narcotics between Colombian coca farms and European nostrils, there has been something of an influx of Latin Americans too. With them have come US and British law enforcement officers aiding the new government, which is trying to crack down. The prospect of oil and the possibility that there is even lots of it situated a convenient boat ride across the Atlantic from the world’s most prolific consumer, has only heightened the allure.

Being the object of international desire can have its complications, however. Ghanaian businessmen, intellectuals and politicians are preoccupied with ensuring that local businesses develop and that, as oil flows, local companies profit from technology transfer and local content provisions.

After years as the recipient of foreign aid, subject to externally imposed conditions, the country’s leaders also appear intent on forging new ties on a more equal footing. But like other African nations, Ghana faces the delicate task of meeting international expectations as Washington seeks to consolidate its influence, Europe, and especially former colonial power Britain, fights to maintain a grip, and China is banging on the door.

“Ghana’s major trading partner is still Europe. But its fastest growing partners are China, India and Latin America,” says Cadman Atta Mills, the president’s brother and deputy head of an advisory board set up to think strategically about the economic future.

“The economic pulse of Ghana is not driven by the relationship with the US. Our relations are defined much more by politics and by sentimental attachment. I am thinking in terms of the African-American connections,” he says.

That connection was on display this summer when Barack Obama chose Ghana for his first trip to Africa as US head of state in July. The visit had huge symbolic resonance for Ghanaians who have grown accustomed to Nigeria, their bigger West African brother, getting a greater share of attention. Mr Obama intended both to highlight Ghana’s achievements in promoting political freedom and economic development, and his administration’s policy of supporting both in Africa. “We must recognise a fundamental truth that you have given life to in Ghana: development depends upon good governance,” he said in a speech to the national parliament that was warmly welcomed.

At the time, however, many local commentators saw a subtext to the visit, many fathoms deep off their coast. Exxon-Mobil is in position to take over a big stake in the offshore Jubilee field, Ghana’s most advanced oil discovery, after bidding for Texan explorer Kosmos’s share. This could enable the US oil giant to become an important operator in the development of the country’s oil industry.

But the sale is vexed, with relations between the Ghana National Petroleum Company and Kosmos strained, and the state oil company keen to assert its role in choosing a partner.

Both China’s main oil companies, CNOOC, and Sinopec have also expressed interest the field, with the latter ironically deploying Neil Bush, the former US president’s son, as part of a foraging team.

The outcome of the sale is bound to be seen as a bellwether of Ghana’s approach to new dynamics on the continent, brought about by China’s rapidly expanding commercial ties and the advance of other emerging economies such as Brazil and India.

On the one hand, the country has relied to a great extent on western donors, which backed its bid for debt cancellation earlier this decade, and have bankrolled its recovery. But the relationship is beginning to wear a little thin. As one senior government official puts it: “When countries are treated as beggars for so long, there comes a time when they become resentful of their benefactors.” Ghanaian politicians from all sides are hoping that oil revenues might give the country more latitude both in its development decisions and its international relations.

Meanwhile China’s increasingly active reach already offers Ghana choices – and ones that come with fewer strings attached. President Hu Jintao personally approved the building of a 400 MW hydro-electric dam at Bui, in the north of the country. The $600m dam, financed by Exim bank and Sino-Hydro, is now nearing completion. Western donors sat on the project for many years, and declined to finance it.