Is Ghana ‘rehearsing’ the resource curse?

FPSO Kwame Nkrumah

Much ado about nothing is the right description for developments bordering on Ghana’s oil. With estimated 1.3 billion barrels of crude oil making 120 barrels per day, compared to Nigeria’s 36 billion barrels of crude oil (2.5 million barrels a day), it goes without saying that Ghana is making an absolute fuss out of nothing.

Ghana’s oil happens to be the first of its kind that has been fast-tracked and meaninglessly hyped. Day after day, the ordinary Ghanaian is made to understand that the oil find is the country’s last hope for development. Though these expectations are legitimate, considering the fact that petrodollars create powerful economic incentives for economic growth, social advancement and poverty reduction, the unsavory gold experience should keep us quiet and focused.

Even worrying is that politicians are highly expectant than the layman in the street. They, therefore, trumpet oil issues on every platform, even during festival celebrations. It should be known that Ghana is in no way insulated from the nagging challenges of oil exploitation, especially when the resource curse continues to reign supreme in oil-rich countries in the African region.

Apart from these threatening signals, our parliamentarians are sharply divided as to the exact provisions in the Petroleum Revenue Management Bill to change or leave intact. Whether to collateralize our oil revenues or not; and whether to use up revenues made in store for future generations in the Heritage Fund.

Of particular concern is the removal of the existence of the Public Interest and Accountability Committee, with the unfortunate notion that parliament is potent enough to handle issues bordering on public interest, transparency and accountability.
These developments demonstrate that the debate of the country teetering on the brink of the resource curse is still very much alive. In a more serious note, this is what I term ‘rehearsing the resource curse’.

Let’s delve into the issues that clearly explain why Ghana is rehearsing the resource curse. The deserving question to pose is will the resource curse claim yet another victim?

Divisive politicalleanings

I must admit that the resource curse has started and would soon exact its ravaging effects on the economy in less than no time. Why? You may ask. It is simple. A country where its politicians and leaders are divided on a simple but demanding issue as usage of oil revenues on a cusp of oil boom invites for itself the rippling effects of the resource curse. Revenue utilization has now turned political.

While the opposition is not in supportive of collateralizing the oil revenues and using funds belonging to future generations the incumbent government strongly supports.
Who is expedient or otherwise does not matter but that decision makers and parliamentarians have carved for themselves inimical feature that propels the paradox of plenty. This actually starts the show of the resource curse. The issue of collateralization differs in context.

When leaders or politicians in Norway, Canada, and Brazil take the risk to collateralize their oil revenues, it is legitimate to hope for better returns that would significantly reduce poverty. But leaders or politicians especially in the African continent wanting to collateralize should rightly spark fear and mistrust.

In essence, the attitude of leaders or politicians should merit much consideration when future revenues are being tempered with. Collateralization offers no guarantee for growth and development.

Threatening Expectations

It would interest you to know that expectations of the local people have dwindled. Now politicians have joined the show. From 2007 when oil was first discovered in commercial quantities to before 2008 elections believe it or not had expectations that can be described as national. But now, politicians are rather having sleepless nights and misplaced dreams.

Expectations are of late being skewed to the political arena. It is therefore not surprising that chiefs in the Western Region would demand 10 percent of oil revenues that would accrue to the country based on the widely speculated promise made by the Vice President during electioneering campaign.

This is the tip of the iceberg. These demands and expectations cannot be treated with disdain. Such grievances or complaints are believed to have been raised in oil-rich regions like Cabinda, Angola and Doba in Chad even before the formations of rebel groups like the Front for the Liberation of the Enclave of Cabinda (FLEC). One can talk of the civil wars in Chad as a result of these unaddressed grievances.

Transparency not a priority

This is the most crucial. Ghana is seriously rehearsing to experience the resource curse, with the attempted scrapping of the existence of the Public Interest and Accountability Committee (PIAC).

According to the final draft of the Petroleum Revenue Management Bill, “The Bill makes great effort to respond to the need for accountability and transparency. Clause 51 to 59 deals with matters of transparency and accountability, as well as public interest.

The clauses entrench transparency as a fundamental principle, define the scope of confidentiality and finally establish the Public Interest and Accountability Committee.” The argument here is simple. The removal of the PIAC means that transparency and accountability is greatly compromised.

Not mincing matters, parliament or even EITI office alone, cannot ensure the type of transparency and oversight role needed to impress appropriate measures that would allow revenues to trickle down to benefit the ordinary Ghanaian.

It should not be forgotten that it is the same Parliament that complained has been left uninformed of leasing of oil blocks to companies in the Jubilee Field. If this could happen, what then would be the fate of revenues?

In a more subtle but dangerous manner, the country has endeavored to sideline the participation of the civil society. No oil-producing country without the increased role of the civil society has been able to elude the resource curse. Norway, Chile, Brazil and others have one of the effective civil society participation in their oil sectors.

The oversight role performed by the civil society remains the most effective and complementing parliament is in no way power usurpation. By implication, the PIAC happens to be the only effective platform to involve the civil society and disregarding the committee is tantamount to wallowing in the resource curse unknowingly.

This is especially dangerous in the African region where the leader or politician cannot be trusted for a second. Corruption has registered its feat in the continent and it takes comprehensive provisions of transparency, openness and accountability to bring salvation.

So, all this while, the civil society front were been taken for granted. This is a clear case of Ghana rehearsing the resource curse.

Conclusion

The rummaging going on in the backyards of chiefs in the Western Region and divisiveness over the passage of bills to govern the oil find is enough to convince the ordinary person that all is not well.

After all, in practicalities, Ghana is not well ready to join the league of oil producing states. In the wise of effective institutions, legal and regulatory frameworks to confront the impending challenges, the country is in serious compromise.

The Daily Graphic, on its Monday, November 29, 2010 edition, asserted that there is a test-run at Jubilee Field, where 20,000 and 80,000 barrels are being pumped a day, when Exploration and Production Bill and Petroleum Revenue Management Bill are not ready to govern the sector. The greatest help our leaders and politicians can offer to Ghana now is to play down on expectations, even within themselves.

It is undeniable that neglect of increasing expectations of the people in the oil sector has been very disastrous especially when they are not met adequately. It is therefore best to contain these expectations by playing down those expectations.

This does not mean to neglect welfare of the people but truly investing in infrastructure and industrial development to create more jobs for the discontented youth. Grievances are best addressed when distribution of oil wealth bridges the wide gap between the poor and rich on one hand and underdeveloped and developed regions on the other hand.

The major undisputable ingredient to confront the challenges of the resource curse is an informed citizenry.

Informed citizenry builds public trust and support and this can only happen when the mandated power of the PIAC is maintained.

The people deserve to know what goes in and out of the sovereign wealth fund. The argument that composition of the PIAC is complex and impossible to operate has no foundation. The members are possible to be selected.

The basic fact is that the country is rehearsing the resource curse; may be Ghana wants to test and see. Let’s go no further than Nigeria, Equatorial Guinea, Angola, Gabon where regardless of potential petrodollars, have nothing special to show off. Beware Ghana!

The author, Stephen Yeboah is a freelance writer and the National Co-ordinator for Osagyefo Network for Rural Development (OSNERD), an NGO based in Kumasi [email: stephenyeboah110@yahoo.com]

Leave a Reply

Your email address will not be published. Required fields are marked *