Wednesday, December 22, 2010

Ghana's first oil


Today marked an important day in the annals of Ghana as it pours its first barrels of oil from the Jubilee wells. Ghana is said to posses about 1.8 billion barrels of crude oil in the Jubilee fields alone, making it the single biggest in Africa and second in the world. This would earn the country about 50% of its national revenue from the oil and gas in 20 years time.

Naturally, expectations of Ghanaians in the oil prospects have gone beyond imaginable limits considering landmarks investments African countries like Nigeria, Libya, Algeria, Egypt and Angola have made from their oil. According to the BP Statistical Energy Survey, Africa had proven oil reserves of nearly 120,000 billion barrels as at the end of 2007 representing 9.49 % of the world’s reserves.

So intense has been the hopes of Ghanaians in the oil find that President Mills recently had to caution against this.

Whatever it is, the remarkable thing is that Ghana has joined the enviable league of oil producing countries. So pragmatic have our policy makers handled the oil find that under the new Petroleum Revenue Management Bill, a clause has been inserted mandating government to use the country’s oil as collateral to secure loans to develop the country. The move is perhaps guided by experiences in other countries where despite their oil resources, the people lives in abject poverty.

Even here in Ghana, what prevails in the Western Region where the bulk of the country’s mineral resources are generated leaves mush to be desired.

Recent agitation by the Chiefs and people for 10% of the oil revenue to be invested in the Western Region is quite instructive as they are not prepared to live in squalor and poverty in the midst of plenty. It is being suggested that instead of handing the region physical cash, an organization along the lines of the Sahara Accelerated Development Authority or the erstwhile Central Regional Development Corporation be set up to coordinate development initiatives in the region. After all, what is good for the goose is equally good for the gander.

Many people speculate the oil find will spell doom for the country rather than be a blessing taking a cue from happenings in neighbouring oil producing countries, especially Nigeria. These people tend to forget that Ghana has always stood tall where others failed.

To protect our oil resources, we need to adequately protect our sea and coastal environment. The capacity of the country’s Navy must be strengthened to confront the challenges of the maritime industry. It is important to improve security in the Western Region to protect the numerous businesses and people who have relocated to the region to provide goods and services for the operation of the oil industry.

The media as key partners need to be appropriately oriented to provide the needed education on the industry. Oil booms throughout the world have been linked to increased conflict, corruption, authoritarianism, loss of control of public spending, exposure to price shocks and neglect of other sectors of the economy.

In Nigeria for example, despite their huge oil potential, their electricity supply is not the best. The oil potential, their electricity Power Authority, NEPA, has been jokingly re-christened Never Expect Power Always. Almost all households have personal generators due to inefficiency in electricity supply. Apart from a few states which have been well developed, majority are not doing well. The same can be said about Gabon and Equatorial Guinea.

Nevertheless Ghanaians have every cause to be expectant in their oil find. If nothing at all, it will provide employment for the teeming unemployed youth and increase investment in the country. As we welcome our august visitor, it is imperative that we resolve to manage it prudently and invest the returns in priority areas. The colour black is perceived as connoting bad luck; let us turn the tide in our favour this time round making the black gold truly golden.

All said and done, the commercialization of the country’s oil deposit is a national feat which all Ghanaians should be proud of. As envisaged by the current government, let us use the resources judiciously in reconstructing our roads and building hospital instead of palatial mansions or enriching the pockets of a few.

Posterity will never forgive the present generation if we fail to take advantage of the opportunity to turn the fortunes of the country around through the oil find.

May the good Lord continue to bless our homeland and make it greater and stronger.


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