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Opinions of Monday, 4 August 2008

Columnist: Aboagye, Abdulai

The Oil is here - What Next?

The news that Ghana has finally discovered oil on it's Cape- three points shores received the euphoria that it deserved. As expected members of government were given one rare opportunity to cash in on it and score some political points. The opposition, as expected of African opposition, were quite dismissive of the discovery citing some previous announcements of oil discovery which never was. The focus of this article is not to examine these political sideshows, but rather enumerate some of our past problems with regards to managing natural resources so as to avoid such problems in the event the oil is mined. In Part two of this article the writer will also offer some suggestions for the good learned people of our dear country to consider.

In the first place, the government's decision the send emissaries to other oil mining countries to study their failures to serve as a guide for us is to some extent commendable. However, this writer believes that we do need to globe trot to find out how to avoid the curse of natural resources. If anything, the writer believes that we should sit at home and examine our own mistakes in managing our cocoa, gold and other natural resources. History has it that at some point Ghana was the leading producer of cocoa on planet earth!! We were also one of the leading miners of gold in the world. These two natural resources alone could have propelled us to accelerate our development but what do we see today? We have squandered these natural gifts and are now at the bottom half of the worlds development ladder. And so instead of going elsewhere for fault finding, we rather should sit at home and examine our own past failures with regards to the management of our cocoa, gold and and other resources and avoid them in future. Apart form the more obvious ones like corruption, nepotism, lack of vision etc - which even kids can recite- there were other less obvious mistakes which also contributed greatly to our failures and which we need to avoid in the management of our new found wealth. These failures include but not limited to the the following:

1. FORGETTING THE HEN THAT LAID THE EGGS: While we were enjoying the fruits of the labour of our hard working cocoa farmers, for example, we failed to look to their needs.We failed the build good schools, extend electricity, extend good drinking water and other social amenities to these areas. All they got were useless programmes designed from Accra which sometimes seem to ridicule the farmers. In fact, the very areas that produce the golden pod in Ghana are among the least developed in the country. The Western region is a typical example. The region which has been the leading producer of cocoa over the decades is one of the least developed in the country.Most parts of the western region cannot receive TV reception from Ghana! In short Cocoa farmers whose back rested our economy were treated like second class citizens. As a result of this Accracentric policies cocoa farming was relegated to school dropouts and retirees. In no time serious countries overtook us. If we transfer this same attitude to the new found oil we will create an avenue for any mayhem seeking person to mobilize the people and destabilize the area. Such is the case of the Nigeria.

2. LACK OF SERIOUS DEBATE ON RESOURCES Over the years there has never been any serious debate on our resources and how they should be used or distributed. All we have done is to leave them at the hands of the executive branch government to use them at own behest. Part of the reasons is that for the most part we have been ruled by the military. And also where have had parliaments, they have only served as a stamp of approval for the executive branch. The result has been the what we see today. They have managed to mismanage the resources and left all of as reeling. If we transfer the same attitude to the oil resources then we should be assured that it will be a recipe for disaster.

3. DEPENDING HEAVILY ON ONE PRODUCT- One other thing which we did with our cocoa wealth is to depend heavily on it. With few inclusions like gold, cocoa was our only source foreign exchange earner. Every program or policy was underpinned by cocoa revenue. We failed to diversify our economy and look for other means of supplementing the cocoa revenue. As we loaded every program on cocoa, it affected the bottom line- the cocoa farmer. As late as the 1990's the cocoa farmer was paid 52% of world market price of cocoa while Cote D'Ivoire was paying 80% percent of the world market price of cocoa to it's farmers. And so naturally Ghanaian farmers crossed to Cote D'Ivoire to sell their cocoa. Then again when the world market price of cocoa nose dived, our economy also went to the south with it. If we transfer this same attitude to our new found oil then down the line when oil is no more the hottest commodity on earth, we will find ourselves in the economic abyss again. 4. FAILURE TO ADD VALUE- Over the years all we did with the gift of Tetteh Quarshie and the other natural resources was to export them in their raw form. We were very proud to see ourselves the leading exporter of raw materials to other peoples land. And we were very happy in teaching our kids in school that we are the leading exporter of raw materials. Raw materials which came back as finished goods at very expensive prices. There were many products we could have derived from cocoa for example, but we never made any attempt to do so. In the same way as cocoa, we could derive many by-products from oil but if we become satisfied with just the exportation of crude oil, then one will be right in saying that we will not gain the full benefits of our new found wealth.

5. THROWING SOUND ECONOMIC POLICIES TO DOGS- One other thing that we did with revenue from our natural resources is to throw sound economic policies to the dogs. Somehow we convinced ourselves that we have a bottomless pit of wealth which can never be depleted. We failed to lay down any sound policies which would have impacted positively on our future. Taxes for example was seen as foreign. Though we were bombarded with one development plan after another, most were mere repetition of Gordon Guggisburg's and did not have much to take to the bank.

6. CORRUPTION AND WASTE- On top of all the above is our age old corruption and wasteful spending. Stories of missing shiploads of cocoa were the order of the day. Wasteful programmes which were done at the whims of politicians which had no real benefits were also the order of the day. And all these were done at the expense of the farmers and miners and mother Ghana. Even when the programmes were designed for our farmer our leaders never bothered to make sure that the real beneficiaries were farmers. The Cocoa scholarship is a clear example.

7. GRATIS GRATIS GRATIS- Beyond corruption and waste is the enjoyment of free giveaways. Already our politicians have started promising free this and free that. From those who will give free school uniforms to all Ghanaian students to those who will make education free to university level;they are all banking their hopes on the windfall from oil. The question is have we not been here before? The other question is, have these politicians asked themselves how we can sustain these programs twenty years down the line when oil is not as hot as it is today? These are fundamental questions which need to be asked.

These problems enumerated here the writer believes are some of the reasons why could not make any headway in terms of development with our natural resources of the past. The writer believes if these problems are acknowledged, examined and stemmed, we will not need to globe trot in search of answers as to how to avoid the curse of oil in Africa. God bless Ghana!!

Abdulai Aboagye (amakee@sbcglobal.net)