Ghana Oil: The Descent of the Vultures

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Ghana Oil: The Descent of the Vultures

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Ghana Oil: The Descent of the Vultures


I penned this piece about four years ago when, with loud acclamation, Ghana joined the elite oil-exporting countries. My article was a cautionary one; advising the managers of the new oil wealth to learn from the history of countries like Nigeria and Angola which has turned their own resource into a veritable curse.

Sadly, no one paid a heed. Today, Ghanaians gnash teeth and receive oil bills that keep rising every other week in what officials nebulously called “Automatic Price Adjustment.


oil companies

Faced with the militant peoples of the ex-colonial territories in Asia, Africa, the Caribbean, and Latin America, imperialism simply switches tactics. Without a qualm, it dispenses with its flags, and even with certain of its more hated expatriate officials. This means so it claims, that it is ‘giving’ independence to its former subjects, to be followed by ‘aid’ for their development. Under cover of such phrases, however, it devises innumerable ways to accomplish objectives formerly achieved by naked colonialism. It is this sum total of these modern attempts to perpetuate colonialism while at the same time talking about ‘freedom’, which has come to be known as neo-colonialism.” – Kwame Nkrumah, Neo-Colonialism, the Last Stage of Imperialism

Oil profits generally seem to find their way by some invisible pipeline into private pockets.” – Lloyd George

Oilmen are like cats; you can never tell from the sounds of them whether they are fighting or making love.” – Calouste Gulbenkian

Three pieces in Ghana’s Daily Graphic issue of December 2, 2009, made very interesting reading and they prompted this essay, which represents my contribution to the ongoing debate on Ghana’s new-found oil and gas wells (wealth?).

In the said edition, Ghana’s “Biggest selling newspaper since 1950,” blared in its front-page headline, “SCRAMBLE FOR GHANA’S OIL.”

The story tells how two Western oil multinationals (ExxonMobil and BP) are embroiled in a titanic struggle over Ghana’s emerging oil industry. The two titans are struggling to buy Kosmos Energy’s one-quarter share of the Jubilee Oilfields, which are valued at more than $4 billion.

The story then goes on to tell how the Ghana National Petroleum Corporation (GNPC) is struggling to look after Ghana’s interest by wading into the buyout dispute. According to the paper, the director of exploration at GNPC, Mr. Thomas Manu, vowed that:

“The GNPC is looking at Ghana’s interest first, just like other companies will look at their shareholders’ interest. We are committed to ensuring that Ghanaians derived the maximum benefit from the oil find.

…and in so doing the GNPC is mandated to ensure that the country derives the maximum benefit from its hydrocarbon and petroleum resources.”

Amen, amen, amen!

Apparently taking its cue from Mr. Manu’s speech, Ghana’s largest circulating newspaper editorialized:

[…] However, any arrangement in which the state or the government does not have a significant stake in or control of the entities or processes dealing with the exploitation of these resources and in which it cannot, therefore, procure a significant portion of the benefits accruing to improve the well-being of the people cannot be said to be in the national, let alone people’s interest.

We have had many examples of oil-rich nations producing millions of barrels of oil a day but with the mass of the people living in abject poverty. One can just take a look at some of our oil-rich neighbours. While corruption and greed among the political elite of these nations may be cited as the causes of such an unhealthy state of affairs, lack of effective control over the resources is a contributory factor.

In our own country, we have had the experience of mining gold in Obuasi, Tarkwa, Prestea and other places but the state of those areas and the lives of the vast majority of the inhabitants are nothing to write about.

This is again partly attributable to the fact that the bulk of the wealth derived from these mines is exported out of the country by the multinational mining companies and their highly paid expatriate staff.

The royalty and other entitlements paid pale in significance to what is repatriated outside the country. (Daily Graphic, December 2, 2009, Editorial)

And in one of those magical coincidences, Prof. S. E. Anka, writing to the same paper on the same day had this to say in a letter to the editor titled: “Oil and gas find,” (panacea to Ghana’s economic recovery?):

On September 17 and 18, 2009, there was a conference on “Meeting Ghana’s Economic Challenges in the 21st Century: The Discovery of Crude Oil and Gas in Ghana,” organised by the Society of Petroleum Engineers (SPE) at the Teacher’s Hall, Accra.

Many interesting issues were raised, but the one that I want to comment on is the revelation by the Deputy Minister of Energy that the crude oil would be off-loaded off-shore into ships to be taken away for refining. This arrangement is for 20 years! How many Ghanaians are aware of this arrangement? Does this arrangement favour Ghana? Who, on Ghana’s side, endorsed this arrangement? Why can’t the appropriate refinery be built in Ghana? In refining crude oil, there are many by-products. Who is going to benefit from those by-products? Won’t the setting up of a refinery in the Western Region provide the jobs people are expecting from the oil and gas find?

Our numerous natural resources have not turned our economy around all these years. The oil and gas will not unless we add value to them. Don’t we see that we are enslaving ourselves by the sort of agreement we sign? What is wrong with us? (Daily Graphic, December 2, 2009, Letter to the Editor, p. 9)

The Daily Graphic is a state-owned newspaper with impeccable conservative credentials that no one can impugn with any hint of socialism.

We need no oracular divination to know that Nigeria is one of the countries referred to in the aforementioned editorial. That unfortunate country is said to have earned between $400 and $600 billion since it began exporting crude oil in the 1950s.

But today all that one sees in the country is an insanely corrupt and shameless elite, a devastated environment, and millions of impoverished citizens whose livelihood the oil companies have destroyed. Nigeria cannot generate enough electricity to power its few disarticulate industries. And in the greatest of ironies, Nigeria’s President Yar’adua is a frequent guest at Saudi Arabia’s King Faisal Hospital: Africa’s most populous nation lacks the medical wherewithal to treat its leader!

Today, Nigerians (minus their otiose elite) see oil as a curse rather than a blessing — and rightly so. With over fifty years of crude oil production, Nigeria lacks the capacity to refine her crude oil and still depends on imports to meet her domestic needs. Agriculture, which used to be the country’s top earner and highest employer, has long been neglected as the country continues to make “easy” money from crude oil: Nigeria today spends a large percentage of its earning in importing food.

Equatorial Guinea is another African country whose oil wealth has turned into a curse. This is what one commentator says:

Equatorial Guinea is a textbook case of the resource curse: The country’s leaders have squandered its oil wealth while its people have languished. The GDP of this once-poor country has shot up more than 125-fold since the mid-1990s, when oil was first discovered there, elevating its wealth per capita to the highest level of any country in sub-Saharan Africa. Meanwhile, the proportion of government spending dedicated to health and education in Equatorial Guinea falls well below the regional average. Rather than benefiting the people, vast sums of the country’s oil revenues have gone to bankroll personal purchases for President Obiang, including two mansions in suburban Washington. Obiang’s eldest son allegedly spent more on houses and cars in the United States and South Africa between 2004 and 2006 than the government did on the entire education sector in 2005. Corruption is endemic. And as if mismanagement were not enough, Obiang’s government has overseen a litany of human rights violations, including forced evictions and rampant police torture. (Source:

Let’s now turn to something very interesting that happened recently in Nigeria that should be taken very seriously by Ghanaian energy policymakers.

The Nigerian newspaper NEXT carried a report on November 24, 2009, on the earful the Nigerian minister of information, Mrs. Dora Akinyuli, got from the Venezuelan ambassador to Nigeria, Mr. Enrique Fernando Arrundell, when she appealed to the envoy to help woo his country’s investors to come and help develop Nigeria’s oil sector.

Taking his cue from his in-your-face bluntness of his president and brushing aside diplomatic niceties, Mr. Arrundell told the Nigerian minister some very bitter home truths:

In Venezuela, since 1999, we’ve never had a raise in fuel price. We only pay $1.02 to fill the tank. What I pay for with N12,000 here (Nigeria), in Venezuela I’ll pay N400. What is happening is simple. Our president (Hugo Chávez) decided one day to control the industry because it belongs to the Venezuelans. If you don’t control the industry, your development will be in the hands of the foreigners. You have to have your own country. The oil is your country’s. Sorry, I am telling you this. I am giving you the experience of Venezuela. We have 12 refineries in the United States, 18,000 gas stations on the West Coast. All we are doing is in the hands of the Venezuelans.

The envoy continued:

Before 1999, we had three or four foreign companies working with us. That time they were taking 80 percent, and giving us 20. Now, we have 90 percent and giving them 10. But now, we have 22 companies working with us in that condition. It is the Venezuelan condition. You know why? It is because 60 percent of the income goes to social programmes. That’s why we have 22,000 medical doctors assisting the people in the community. The people don’t go to the hospital; doctors go to their houses. This is because the money is handled by the Venezuelans. How come Nigeria that has more technical manpower than Venezuela, with 150 million people, and very intellectual people all around, not been able to get it right? The question is: If you are not handling your resources, how are you going to handle the country?

The envoy rounded up by saying:

So, it is important that Nigeria takes control of her resources. We have no illiterate people. We have over 17 new universities totally free. I graduated from the university without paying one cent, and take three meals every day because we have the resources. We want the resources of the Nigerian people for the Nigerians. It is enough! It is enough, Minister!

Luckily for us in Ghana, we have the experience of other nations (Nigeria and Equatorial Guinea among them) to guide us. Whether or not we decide to learn from these experiences is left to us. Thankfully, we now also have some insight about what other people (Venezuelans under Hugo Chávez) have done with their God-given resources.

There are, however, some fundamental truths that we must begin to tell ourselves. First and foremost is the belief that we can continue to depend on other people’s (especially Western) charities for our development. I have said several times that no country has been developed by outsiders. International relationships are simply not defined by sentimentalities but by cold, calculated self-interest. This is a lesson that African leaders refuse to learn. Outsiders might help, but it is the citizens of a country led by an intelligent leader with a vision that develops nations.

And as I have recounted several times in this very column, our five hundred or so years of “relationship” with the West has been to our utter detriment. We have nothing but slavery, colonialism, and the more pernicious neo-colonialism (aka imperialism) to show for it. We can also throw in the disease of rabid racism that still pervades the Western world.

And yet African leaders continue to parrot the same inanities about partnering with “developmental partners!”

We should stop hoping that the oil companies are going to change course and discover altruism in our land. Anthony Sampson in one of his best-selling books (The Seven Sisters) chronicled the nasty shenanigans oil industries have perfected over the years to cheat the rightful owners of oil resources.

The history of oil is one of unbridled greediness on the part of the Western energy companies. It was only the formation of OPEC (in 1960) that stemmed from the unconscionable rape of the oil-producing states.

As Professor Anka rightly pointed out: “Our numerous natural resources have not turned our economy around all these years.”

Any patriotic citizen that visits the abandoned mines at Prestea and other places cannot but shed serious tears for this country.

In the name of “investment,” the Western multinationals will bring in ancient equipment (tax-free) to come and set up shop to extract our resources. To attract their “investments,” they are given tax breaks and other packages that made them pay their expatriate staff out-of-this-world salaries and emoluments. They will employ the brute force of our compatriots whilst their planes and helicopters are waiting to ship out our gold and diamonds in their raw state. For this, they pay us a pittance in royalty and employ the best PR outfits who will dazzle us with enough razzmatazz to make us dizzy. A few years down the road, the mines are depleted, our land and environment polluted, and our people’s lives wretched. The wily Westerner is already outta the country.

This is the very sad story that keeps repeating itself year in year out and like mindless children, we seem not to learn any lesson.

Since the overthrow of President Kwame Nkrumah’s government in 1966, no government in Ghana has deemed it fit and proper to build a gold or diamond factory in order to add some value to them.

The cities of Antwerp (Belgium) and Amsterdam (Holland) both carry the label “Diamond City,” whereas none of them has a mine anywhere near its vicinity.

This has been our sad story and yet our leaders have stubbornly refused to learn a thing.

There is a law in this country against causing financial loss to the state and it is high time we start to use it seriously and effectively. How on earth can officials of our country, paid from the treasury of mother Ghana, and in this age and time, sign agreements with foreigners to cart away our crude oil unrefined for twenty years! What on earth informed that reckless decision? Who said that slavery is over? And please, what crime is that if not the criminal cause of financial loss to the state of Ghana?

There is a state-owned oil refinery at Tema that is in the perennial struggle to get crude oil from Nigeria, and yet some unconscionable Ghanaians appended their signature to ship our oil to foreign refineries unrefined!


About the Author

Femi Akomolafe is a passionate Pan-Africanist. A columnist for the Accra-based Daily Dispatch newspaper and Correspondent for the New African magazine. Femi lives in both Europe and Africa and writes regularly on Africa-related issues for various newspapers and magazines.

Femi was the producer of the FOCUS ON AFRICANS TV Interview programme for the MultiTV Station.

He was also the CEO of Alaye Dot Biz Limited Dot Biz, a Kasoa-based Multimedia organisation that specialises in Audio and Video Production. He loves to shoot and edit video documentaries.

His highly-acclaimed books (“Africa: Destroyed by the gods,” “Africa: It shall be well,” “18 African Fables & Moonlight Stories” and “Ghana: Basic Facts + More”) are now available for sales at the following bookshops/offices:

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Femi Akomolafe


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