Monday, May 23, 2011

Ghana oil law aims to keep the people happy

Ghana is drafting rules on local hiring and transparency in its oil sector to avoid the discontent that spawned militancy in Nigeria and uprisings across the Arab world, and also keep big oil companies sweet. Grumblings over the energy industry have already started just months after the first.

Ghanaian barrel was pumped. Any failure by the government to ensure employment in the sector could turn to anger, analysts say. But if the rules go too far — with local content requirements overreaching the capacity to train workers — they could also become an obstacle to future investment.

“If we don’t involve these locals, we are going to look at situations of insecurity and uncertainty that are going to compromise billions of dollars of investment,” said Selorm Branttie from Ghana policy think-tank, IMANI.

The issue is critical for one of Africa’s most stable and economically promising nations as it seeks to avoid the militancy seen in Nigeria’s Delta, which at its 2006 peak cut more than a quarter of its production, and the ‘resource curse’ that has afflicted other developing nations. Analysts said an alienated and unemployed youth in Ghana could also risk spawning the kind of anger that fuelled the ‘Arab spring’.

“A lot of the unrest in North Africa and the Middle East has a lot to do with youth bulge, many of them well educated with limited jobs on the market, looking for opportunities,” oil analyst, Willy Olsen said. Analysts said the legislation could also have implications for President John Atta Mills in elections set for next year, with Ghanaians hopeful the oil sector will ease unemployment at 11.2 per cent, and boost local businesses.

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