Govt should make hard choices ahead of oil flow - CEPA

Accra, May 28, GNA - Dr Joseph Abbey, Executive Director of the Centre for Policy Analysis (CEPA), on Friday said government should make hard choices ahead of commercial oil production later this year to make it beneficial to all Ghanaians.

"Let us not base decisions and choices of effectively managing the oil on rhetoric since the oil exploration by itself does not guarantee jobs locally," he said.

"Donors and policy advisers should face the government with the various options and possibilities of managing the oil effectively as well as their consequences", Dr Abbey said, and asked donors and other government advisers not to prescribe solutions or answers to government based solely on the oil find.

Speaking at the launch of a publication, "The year 2010: From a Cocoa Economy to an Oil Economy," he said year 2010 was expected to mark a transition from 100 years of a cocoa economy to an oil economy and that it was important for Ghanaians to consider the opportunities as well as the challenges that could arise.

"We should not be deceived by the oil discovery, otherwise the oil find could destroy the economy through the neglect of our production sector," he said. Dr Abbey explained that if the above happened, Ghana would be affected by what was called a "Dutch Disease", an economic jargon used to describe a situation where majority of the population have access to foreign exchange which results in high importation and low local productivity. This means that other sectors of the economy like the tourism sector, agriculture and industry as a whole would suffer to the benefit of the oil exploration, he said.

He further noted that an effective management of the exchange rate was very critical to the success of the oil production in Ghana and mentioned that the current appreciation of the Ghana Cedi against the major currencies such as the US dollar, the Euro and the Pound Sterling indicated early signs of the "Dutch Disease" which he described as "a resource curse". He said Ghana as a country should focus on economic growth and think about unborn generations rather than focusing on the current well-being at the expense of future jobs.

"We should begin to quantify what the real size of the oil is? How much revenue will the country generate? How much of the oil revenue should be saved for future generations?" Dr Abbey said. He added that issues related to the oil find and its management should be discussed devoid of partisan politics and urged politicians to be level headed in their analysis and treat the oil as a facilitation resource. "A resource that would supplement the main economy and not the only source of the economy," he declared.