‘Where is the Wealth of Nations?’ This question is asked by the World Bank in its 2006 Report because it admits revenues generated from natural resources in many countries have escaped the people; those who see and bear the negative consequences of natural resource extraction. Similar to this are the words of Edward Zwick who asserts that ’’It seems that almost every time a valuable natural resource is discovered in the world-whether it be diamonds, rubber, gold, oil, whatever-often what results is a tragedy for the country in which they are found. Making matters worse, the resulting riches from these resources rarely benefit the people of the country from which they come’’. Could Ghana, one of Africa’s most stable democratic countries’, be afflicted by any of these plagues?
Although it may seem too early to determine the trend of the resource-curse phenomenon in the region (which contributes to more than half of the country’s GDP), in relation to its oil and gas extraction. Mining in the region has proven that the extraction industry has not really been fair to the region. In a recentUNICEF District League Report (which measures progress toward delivering development and key basic services in each of Ghana’s districts, based on global practice of developing indices for measuring and monitoring progress), the Prestea-Huni Valley District and the Tarkwa-Nsuaem Municipality where gold has been mined for over 100 years are placed at 172nd and 32nd respectively and currently count as some of the poorest areas in the country. The Ahanta-West and Nzema-East Districts which are close to the Jubilee Field rank 161st and 95th respectively.
A recent study by VIAM Africa showed that the high influx of people to towns like Tarkwa and Obuase from other parts of the country and even beyond, with the hope of making life better through the mining industry, for example, has turned into disappointment. Most indigenes in these towns are no longer able to afford housing and have been forced to move to live in the outskirts since they can no longer afford high standard of living, coupled with drinking polluted water because of the mining industry. There have also been recorded incidences of high crime rate, prostitution and increased drug culture. Cocoa farming, which used to be the main sources of livelihood, is no more attractive. Most of the youth are now into illegal mining, popularly known in Ghanaian parlance as galamsey. Large reserves of forest (2 percent of forest cover destroyed annually) and countless number of river bodies have been destroyed, in the quest of digging for gold. The Bonsa, Pra and Ankobra rivers which are the three main sources of water to the region are gradually losing their significance. Considering these negative consequences, can we say natural resources have been a blessing?
Drawing lessons from other countries, key issues to explore include whether we are adequately prepared enough to reverse the resource-curse phenomenon. Are relevant institutions in the sector strong enough to deal with issues pertaining to corruption? What measures have been put in place to meet the expectations of the citizenry? Which lessons have been drawn from other countries that have experienced it and how exactly is Ghana making those lessons applicable? Anyone who wants to understand how Ghana can deal with all these can refer to how oil-rich Botswana dealt with all these, although arguable that the Ghanaian and Botswana contexts appear distinct.
With over $2bn made annually by the government of Ghana from Jubilee Field and other offshore fields, one would then conclude that the sudden transition of the country as an oil importer to oil and gas exporter would uplift the economy and ensure development which would positively impact the lives of its citizens. However, anecdotal evidence adduced, through everyday discussions with people suggests that the opposite prevails, especially in the lives of those who are directly affected by the oil find and its production. There are currently life threatening challenges in the region which includes unemployment and fisher folks being prevented from going deep sea fishing. Although the Ghana Heritage Fund has been established to;
’’Provide an endowment to support the development of future generation when the petroleum reserves have been depleted; and receive excess petroleum revenue’’ (MoFEP 2012, PRM Act 815 2011), the government of Ghana is seemingly struggling translate the oil money into development gains.
What is equally problematic about the legislations on the country’s oil revenue allocation is its failure to address the needs of the people directly affected by oil production activities through a comprehensive Corporate Social Responsibility (CSR) policy document. This inability of the legislations to establish how much the Western Region has to enjoy led to 10 percent demand of oil revenue by the chiefs in the region (based on Article 108 of the 1992 Constitution to amend clause 23 for such a bill to be passed). The case of Nigeria reveals that some amount of tension could arise if legislations governing oil and gas revenues are considered unfair. Nigeria’s case started with such similar demands by local authorities. Understanding the power of chieftaincy authorities should inform government and Trans-National Corporations to meet their expectations.
Although the country has received several advices, it however remains uncertain whether Ghana’s oil will play out positively or negatively. Hence the question remains, where is the wealth of resource-rich nations like Ghana?
By: Ben Tomo, CSR Unit, VIAM Africa