Ghana's newfound oil focus of poll campaign

News24 [05/12/12]

Ghana’s incumbent President John Mahama. (File, AP)

Takoradi - Ghana's presidential election on Friday will be the country's first since a much heralded start of oil production in 2010 and the hundreds of millions of dollars in revenue that came with it.

But in this quiet city along the Atlantic coast which has become Ghana's de facto oil hub, located several hours by road from the capital Accra, dreams of streets paved of gold and jobs for everyone have fallen far short of reality.

"The excitement that greeted the announcement of the discovery soon vanished," said Mohammed Adam, the former head of Ghana's Civil Society Platform on Oil and Gas and now a private analyst working with both the government and independent groups.

Voters are wondering how Ghana's much-hyped national resource will improve their lives, while experts warn that politicians are making inflated promises about how oil can change the country.

Among the candidates, President John Dramani Mahama and main opposition candidate Nana Akufo-Addo have made various pledges regarding oil revenue.

Ghana's oil sector clearly holds tremendous promise for a country that is already a major exporter of gold and cocoa.

Analysts also say there are several reasons why Ghana deserves to be applauded, including its transparent system of monitoring oil revenue.

But production, currently at around 80 000 barrels per day, has so far fallen far short of predictions and locals who had hoped to find work in the sector have often been disappointed.

Jobs

When production began at the offshore Jubilee field in December 2010, it was expected to generate up to $1.0bn in government revenue per year, but ended up yielding just $444m in 2011.

The field is not on course to hit the $1.0bn mark for 2012 either, although production is due to ramp up in the coming months.

Oil production, particularly offshore, often does not lead to a large increase in new jobs.

However, some say there should be more opportunities for locals in Takoradi, located near the Jubilee field.

Hundreds of skilled workers are milling around, "idle, but expectant," said Ebow Haizel-Ferguson, who heads Sigma Base Technical Services, a firm that trains Ghanaian labourers for oil sector jobs.

He said he was moved to set up the company after spending nearly two decades in Nigeria's oil-rich Niger Delta, where locals insisted they were not benefitting from the industry and their frustrations boiled into a violent militancy that only cooled following a 2009 amnesty.

Haizel-Ferguson said he understands that a relatively small, offshore oil operation like Ghana's does not generate a massive amount of work, but argued that locals are being shut out of jobs for which they are qualified.

"I don't believe [the oil companies] are doing any nuclear welding that Ghanaians can't do," he told AFP.

Haizel-Ferguson warned of an ominous future if the government does not put in place measures to ensure that Ghanaians are trained and hired to work in specialised oil sector jobs.

Infrastructure

Anglo-Irish firm Tullow Oil, the largest stakeholder of the Jubilee field, declined an interview request, as did Ghana's energy ministry and national oil company GNPC.

But oil revenue has come up repeatedly on the campaign trail.

"Both parties are outrageously over-promising in terms of what the current levels of oil production can deliver to the country," said Oxfam America's Ian Gary, an extractive industries expert who closely tracks Ghana's oil industry.

The president has committed to using the oil windfall to boost infrastructure, while Akufo-Addo has promised free secondary school education to all, and the debate appears to have resonated with voters.

Stevena Liveyela, a 27-year-old Takoradi resident, said she planned to vote for Akufo-Addo, hoping his pledge will one day lead to free schooling for her daughter. But she quickly added that she was prepared for disappointment.

"I don't even know how we're going to benefit from oil," she told AFP.

Gary said Ghana deserves significant credit for adhering to a strong revenue management law that allows outside parties to track the money flow.

The government has also disclosed details of contracts with private companies, "a rare step in the African oil context".

Indeed, analysts say that the west African giant Nigeria has helped Ghana shape its oil industry - by charting how things should not be done.

"That example definitely looms large," said Gary, referring to the outlandish corruption and decades of pollution that has made Nigeria's oil sector a source of public outrage.

Ghanaians, according to Gary, are insisting they will not be "another Nigeria".

- SAPA