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Oil Speculators Move to Ghana

3p Contributor | Tuesday October 25th, 2011 | 3 Comments

This market-on-wheels in Ghana improves the local economy

By Kwei Quartey, M.D.

The world has an ambivalent relationship with sustainable energy. We just love our fossil fuels and seem unwilling or unable to change. For some like the nation of Ghana, the longer the United States and other heavily consuming countries maintain their energy status quo, the better.

Lying along the West African coast, Ghana is the latest entrant to the club of African oil producers.  In 2007, Britain’s Tullow Oil and its partners made history by discovering huge reserves of offshore oil in the Jubilee Field off Cape Three Points, the southernmost tip of Ghana.  In very short order – only 40 months – Tullow began oil production in December 2010.  In January 2011 Ghana sold its first batch of crude oil to Exxon Mobil Corporation.  There is reportedly a whole lot more where that came from, and it’s the highly sought-after light, sweet variety.  For fossil-fuel lovers in the United States, the longer Ghana can help us maintain our energy status quo, the better.

According to Ghana’s Minister of Energy, 13 different petroleum operations are in different stages of oil exploration off Ghana’s shore, and more companies are seeking production rights all the time. The British, Dutch, Chinese, Italians, Russians and Americans are all salivating at Ghana’s front door. Ghana has long been a leading cocoa exporter, but cocoa and its end product chocolate do not elicit the intensity of lust that oil does.

Although producing and exporting large amounts of petroleum is a first for Ghana, this focus on its natural resources is not new.  Going back as far as 1471, Portuguese explorers arriving at Ghana’s coast found so much gold between the Ankobra and Volta Rivers, they called the areaLa Mina or The Mine.  La Mina was later corrupted to “Elmina”, as in Elmina Castle, which the Portuguese built between 1482 and 1486 in order to trade in gold, ivory, and, of course, slaves

If the Portuguese supposed Ghana’s coast fever belonged solely to them, they were wrong.  Following in their path, other Europeans made tracks to this glittering place called La Mina: the Dutch (who kicked out the Portuguese), Brandenburg-Prussians, British, Danes and Swedes.  This modern-day feverish rush to Ghana draws an uncomfortable parallel to the ancient one.  Only the coveted material has changed: yellow gold then, black gold now.

The centuries-old history of Western plunder makes many Ghanaians worry that this latest natural resource, oil, will become a familiar story of money for the few with little benefit for the many.  After all, living conditions in Ghana’s gold-mining towns reflect nothing of the riches supposedly associated with the shiny, tantalizing metal.

Many Ghanaians have already been disappointed to find that the oil industry is not itself a large-scale employer.  With the exception of the most menial of jobs performed on a rig, particularly an offshore rig, all positions involve levels of skill and training that can take several years to attain.  The highest supervisory posts are still largely in the hands of white expatriates. Ghanaians hope this situation will change, but everyone knows that change won’t come overnight.

Oil production has already had an impressive effect on Ghana’s economic data.  According to Economy Watch, Ghana was the world’s fastest growing economy in the first half of 2011 with a GDP growth rate of 20 percent, which is 6 percent higher than the first runner-up, Qatar.  But reminiscent of the “99-Percenters” of the Occupy Wall Street movement who wonder why they can’t find a job while bankers sit comfortably on their stash of cash, Ghanaians want a 20 percent GDP growth rate to mean something to them in real terms.  They want to see improvements in buying power, employment, goods and services, infrastructure, schools, hospitals and their general standard of living. According to UNICEF, in 2009, Ghana’s gross national income per capita was $700 and life expectancy was only 57. In 2008, 74% of rural populations were using “improved” drinking water and only 13% were using improved sanitation facilities.

The Portuguese built Elmina Castle centuries ago, but it still stands today and is a powerful metaphor for how “striking it rich” can mean the creation of an exclusive, powerful and protected group of people who help themselves to wealth and never share it.  For many, whether in Ghana, the United States or elsewhere in the world, the time has come to dismantle the castle…physically and metaphorically.

Kwei Quartey is the author of Wife of the Gods, Children of the Street, and an upcoming novel set in Ghana with the oil industry as a backdrop.

[Image Credit: G-lish Foundation, Flickr]


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  • Awo

    I disagree with your photo caption. How can selling on what we call locally as truck improve the local economy? It’s like saying the guy who sells roasted nut on the sidewalk in New York City during the summer improves NYC economy.

    • Jen Boynton

      The idea is that when local people sell products they’ve farmed (or woven or created from scratch, or what-have-you) to other local people the money stays in the local economy where it can help small businesses thrive and grow.

      To address your example– buying nuts one time on the street from a vendor in NYC isn’t going to have a measurable impact on local economies, but it’s a lot better for the local economy than buying that same snack from McDonalds. That peanut vendor can expand and thrive his business while money spent at Mickey-Ds goes straight to HQ and won’t provide any job creation at all.

      Thanks for commenting!

      • Christopher Smith

        And when the oil in Ghana runs out, then what do the local people do? I did a research paper on the World Bank’s “7th Ghana Reduction Support Credit” last year, and while many of the measures for accountability were nice, the only reason the West is interested in Ghana is for oil. The same applies to Uganda and its recent discovery of oil as well. While I will that this may bring economic empowerment to the locals of Ghana, it will be until there is no more oil. Besides that I am curious to know the possible environmental damage that may occur, the transparency of oil transactions, and if the money generated from oil sales will benefit the people of Ghana, and not a select few in this ethnically diverse country. Sometimes having natural resources that the world wants is not a good thing. History is wrought with examples of this. And as for neoliberalism, I can guarantee you that eventually there will be a McDonald’s, or some Western food franchise. Capitalism is also “T.I.N.A.”…there is no alternative. CIAO!