Resource curse or resource disease? Oil in ghana

African Affairs

Volumn 112, Issue 449, 2013, Pages 583-601

  Kopiński, Dominik ^a   Polus, Andrzej ^a   Tycholiz, Andwojciech ^a  

^a UNIVERSITY OF WROC AW   (Poland)

Author keywords

[No Author keywords available]

Indexed keywords

ACCOUNTABILITY; CIVIL SOCIETY; DEVELOPING WORLD; HYDROCARBON RESOURCE; OIL PRODUCTION; POLITICAL ECONOMY; RESOURCE MANAGEMENT;

GHANA;

EID: 84884756907     PISSN: 00019909     EISSN: 14682621     Source Type: Journal    
DOI: 10.1093/afraf/adt056     Document Type: Article

References (92)

1. Interview, Eben Apesegah, Lead Geologist, Ghana National Petroleum Corporation, Accra, 17 November 2012. According to the International Energy Agency (IEA), however, as of 2011 Ghana crude oil reserves equalled 0.7 billion barrels.
2. In terms of oil production, with average production standing at 74,000 bpd, Ghana is now classified as the 13th largest producer in Africa, after Tunisia (83,000 bpd) and before Cameroon (60,000 bpd). The largest three African oil producers are Nigeria (2,528,000 bpd), Algeria (1,884,000 bpd) and Angola (1,840,00 bpd).
3. IEA, ' Statistics 2011', (17 May 2012).
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5. Jeffrey D. Sachs and Andrew M. Warner, 'Natural resource abundance and economic growth' (Harvard Institute for International Development (HIID) mimeo, November, Cambridge, MA, 1997), (20 February 2013).
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7. Nathan Jensen and Leonard Wantchekon, 'Resource wealth and political regimes in Africa', Comparative Political Studies 37, 7 (2004), pp. 816-41.
8. For a more nuanced view, see Thad Dunning, Crude Democracy: Natural resources wealth and political regimes (Cambridge University Press, Cambridge, 2008)
9. Philippe Le Billon, 'Angola's political economy of war: the role of oil and diamonds, 1975-2000', African Affairs 100, 398 (2001), pp. 55-80.
10. Jdrzej G. Frynas, 'The oil boom in Equatorial Guinea', African Affairs 103, 413 (2004), pp. 527-46.
11. Geoffrey Wood, 'Business and politics in a criminal state: the case of Equatorial Guinea', African Affairs 103, 413 (2004), pp. 547-67.
12. Luke A. Patey, 'Crude days ahead? Oil and the resource curse in Sudan', African Affairs 109, 437 (2010), pp. 617-36.
13. Jdrzej G. Frynas, 'Corporate and state responses to anti-oil protests in the Niger Delta', African Affairs 100, 398 (2001), pp. 27-54.
14. Scott Pegg, 'Can policy intervention beat the resource curse? Evidence from the Chad-Cameroon pipeline project', African Affairs 105, 418 (2006), pp. 1-25.
15. Scott Pegg, 'Chronicle of a death foretold: The collapse of the Chad-Cameroon pipeline project', African Affairs 108, 431 (2009), pp. 311-20.
16. Sachs and Warner, 'Natural resource abundance and economic growth'
17. Richard Auty, 'Introduction and overview' in Richard Auty (ed.), Resource Abundance and Economic Development (Oxford University Press, Oxford, 2002).
18. Thorvaldur Gylfason, 'Natural resources, education and economic development', European Economic Review 45, 4-6 (2001), pp. 847-59.
19. Nancy Birdsall, Thomas Pinckney, and Richard Sabot, 'Natural resources, human capital, and growth' in Auty (ed.), Resource Abundance and Economic Development, pp. 57-75.
20. 'Ghana: avoiding the resource curse', Africa Research Bulletin, Economic, Financial and Technical Series 47, 1 (January-February 2010), pp. 18543-4.
21. Anna Cavnar, 'Averting the resource curse in Ghana: the need for accountability', Ghana Center for Democratic Development Briefing Paper 9, 3 (2008)
22. Ransford Gyampo, 'Saving Ghana from its oil: a critical assessment of preparations so far made', African Research Review 4, 3 (2010), pp. 1-16.
23. Tom C. McCaskie, 'The United States, Ghana and oil: global and local perspectives', African Affairs 107, 428 (May 2008), pp. 313-32.
24. Gavin Hilson, 'Harvesting mineral riches: 1000 years of gold mining in Ghana', Resources Policy 28 (2002), pp. 13-26.
25. Raymond E. Dummet, El Dorado in West Africa: The gold-mining frontier, African labor, and colonial capitalism in the Gold Coast, 1875-1900 (James Currey, London, 1998).
26. Tony Killick, Development Economics in Action: A study of economic policies in Ghana (Heinemann, London, 1978)
27. Thomas M. Akabzaa, Justine S. Seyire, and Kwadwo Afriyie, The Glittering Façade: Environmental and health impacts of mining in the Obuasi Area (Third World Network, Accra, 2007).
28. William Tsuma, Gold Mining in Ghana: Actors, alliances and power (LIT Verlag, Berlin, 2012)
29. Fui S. Tsikata, 'The vicissitudes of mineral policy in Ghana', Resources Policy 23, 1 (1997), pp. 9-14.
30. Joseph R. Oppong and Esther D. Oppong, Ghana (Chelsea House Publishers, Philadelphia, PA, 2003), p. 75.
31. Daniel Seddon-Daines, A Political and Economic Dictionary of Africa (Routledge, London and New York, NY, 2005), pp. 237-9.
32. Barack Obama, 'Address to the Ghanaian Parliament', 11 July 2009, (17 January 2012).
33. For a good description of the Ghanaian political system see Lindsay Whitfield, 'Change for a better Ghana: party competition, institutionalization and alternation in Ghana's 2008 Elections', African Affairs 108, 433 (2009), pp. 621-41.
34. Interview, Dr Ransford Gyampo, Department of Politics, University of Ghana, Accra, 14 November 2011
35. Interview, Prof. Kwesi Jonah; Interview, Dr Ransford Gyampo.
36. Interview, Dr Vladymir Antwi-Danso
37. Benjamin Smith, Hard Times in the Lands of Plenty: Oil politics in Iran and Indonesia (Cornell University Press, New York, NY, 2007)
38. Ernest Aryeetey and Augustin K. Fosu, 'Ghana's post-independence economic growth: 1960-2000' in Ernest Aryeetey and Ravi Kanbur (eds), The Economy of Ghana: Analytical perspectives on stability, growth and poverty (James Currey, Oxford, 2007), pp. 36-77.
39. Roger S. Gocking, The History of Ghana (Greenwood Press, Westport, 2005), pp. 147-215.
40. World Bank, 'Global economic prospects, maintaining progress amid turmoil' (World Bank Report, Volume 3,Washington DC, June 2011)
41. Doing Business 2011, 'Making a difference for entrepreneurs' (World Bank, Washington DC, 4 November 2010), (21 November 2011).
42. See Bloomberg Businessweek, 'Ghana five-year bond sale oversubscribed, central bank says', 28 July 2011, (9 December 2011).
43. Reuters, 'Ghana bank says 5-yr bond slightly oversubscribed', 9 November 2011, (9 December 2011).
44. One persistent feature in Ghana's budget is the public sector wages bill that occasionally grows. The current opposition has been very critical of the government's fiscal policy, but the problem seems systemic and not party-specific. For instance, it was the former President, John Kufuor, who, in his last days in office, approved a bill to raise public sector salaries by 16-34 percent and granted himself 'a severance package which includes $400,000 in cash, two houses and six cars'.
45. See Africa Confidential, 'Economic facts and fantasies' 50, 2 (23 January 2009), p. 2.
46. Samuel N. Addy, 'Ghana: revival of the mineral sector', Resources Policy 24, 4 (1998), pp. 229-39.
47. Benjamin N. A. Aryee, 'Ghana's mining sector: its contribution to the national economy', Resources Policy 27, 2 (2001), pp. 61-75.
48. Bank of Ghana, 'Bank of Ghana press release', (Bank of Ghana, Accra, 1 September 2011), (27 December 2011).
49. Interview, Eben Apesegah, Lead Geologist, Ghana National Petroleum Corporation, Accra, 17 November 2011. It is worth noting, however, that according to IEA Ghana's proven natural gas reserve as of 2011 does not exceed 0.8 trillion cubic feet, which would make it merely the 25th largest gas holder in Africa.
50. Ghana has around 16 to 18 months to develop fundamental gas infrastructure to transport the gas to various power generation stations and other gas-consuming facilities. Otherwise, Ghana will have to start flaring gas again at full pace, since after 18 months of gas re-injection the oil reservoirs will be in danger.
51. According to an agreement signed with Sinopec, the plant is scheduled to be completed in 2013 and Sinopec is responsible for securing financial support for the project until the first tranche from the $3 billion China Development Bank loan is released
52. See Francis Kokutse, 'Sinopec to build Ghana gas processing plant', (Wall Street Journal, 24 November 2011), , (accessed 9 September 2013).
53. Joe Oteng, 'Why Ghana sold her first oil', Ghana Energy Journal 1, 2 (April-June 2011), p. 13.
54. Interview, Dr Steve Manteaw, Chairman of Civil Society Platform on Oil and Gas, Accra, 16 November 2011
55. In 2010, when the Petroleum Exploration and Production Bill was discussed by Parliament, CSOs pointed out that the draft did not require the disclosures of contracts between the government and oil companies, and that there was no provision for spill detection or response agency
56. Interview, Dr Steve Manteaw
57. Interview, Hon. K. T. Hammond, MP, former Deputy Energy Minister for Oil in the Koufur government, Accra, 24 November 2011; Interview, Dr Steve Manteaw; Interview, Franklin Ferdinand Ashiadey, coordinator of Ghana EITI, Ministry of Finance and Economic Planning, 21 November 2011; Interview, Fred Oware, 1st National Vice Chairman, New Patriotic Party, Accra, 18 November 2011.
58. Interview, Dr Steve Manteaw, Chairman of CSPOG, 16 November 2011
59. Interview, Dr Ransford Gyampo
60. For example, the information that Kosmos Energy disclosed its contract with the Ghanaian government and made it available for downloading via the US regulator was delivered to the Minister of Energy by a representative of civil society
61. Interview, Dr Vladymir Antwi-Danso
62. ISODEC/Oxfam America, Ghana's Big Test: Oil's challenge to democratic development (ISODEC/Oxfam America, Washington DC, 2009), (17 August 2012).
63. Cited in IC Securities, 'Turn on the taps! Ghana's nascent upstream oil and gas sector' (IC Securities, August 2009) available at (12 January 2012).
64. See Morten Jerven, 'For richer, for poorer: GDP revisions and Africa's statistical tragedy', African Affairs 112, 446 (2013), pp. 138-47.
65. Odd-Helge Fjeldstad and Mick Moore, 'Revenue authorities and public authority in sub-Saharan Africa', Journal of Modern African Studies 47, 1 (2009), pp. 1-18.
66. There are a number of building projects financed, among others, by theWorld Bank and Norway. See 'Building capacity to manage Ghana's oil - World Bank assists with US $38 million' (World Bank press release No. 2011/272/AFR, Washington, 20 December 2010). This assistance was mainly targeted at the Ministry of Energy, however.
67. Interview, senior officers of the Ghana Revenue Authority
68. Africa Recovery, 'Ghana's oil industry runs into row over taxes', 25 October 2011, (5 January 2012).
69. Public Agenda, 'Ghana: country loses US$30 million in oil deal', 12 August 2011, (5 January 2012).
70. Interview, senior officers of the Ghana Revenue Authority, Accra, 23 November 2011
71. Interview, Franklin Ashiadey, National Coordinator of GEITI, Accra, 18 November 2011
72. Virginia Haufler, 'Disclosure as governance: the Extractive Industries Transparency Initiative and resource management in the developing world', Global Environmental Politics 10, 3 (2010), pp. 53-73.
73. Gavin Hilson and Roy Maconachie, '"Good governance" and extractive industries in sub-Saharan Africa', Mineral Processing and Extractive Metallurgy Review 30, 1 (2009), pp. 52-100.
74. Haufler, 'Disclosure as governance'
75. Ivar Kolstad and Arne Wiig, 'Is transparency the key to reducing corruption in resource-rich countries?',World Development 37, 3 (2009), pp. 521-32.
76. Ghana Business News, 'Ghana sets up Public Interest, Accountability Committee to manage oil revenues', 19 September 2011, (25 June 2013).
77. See Ian Gary and Terry L. Karl, Bottom of the Barrel: Africa's oil boom and the poor (Catholic Relief Services, Baltimore, MA, 2003).
78. Ian Gary and Nikki Reich, Chad's Oil: Miracle or mirage? Following the money in Africa's newest petro-state (Catholic Relief Services and Bank Information Center, Baltimore, MA, 2005)
79. Pegg, 'Can policy interventions beat the resource curse?'
80. Pegg, 'Chronicle of a death foretold'
81. Ghana Business News, 'PIAC got no office, no letterheads, no money from government', 18 May 2012, (6 August 2012).
82. Business Guide, 'PIAC wants powers deepened', 16 August 2012, (20 August 2012).
83. PIAC, 'Report on petroleum revenue management for 2011' (Annual Report), 10 May 2012, (6 August 2012).
84. Ministry of Finance and Economic Planning 2008 Budget Statement, 'Managing future oil revenues' (Ministry of Finance and Economic Planning 2008 Budget Statement, Accra, 2008), pp. 420-1, (2 January 2012).
85. There are also other relevant laws that regulate other (indirect) aspects of the oil industry, such as the Fiscal Responsibility Law, or the Environmental Protection Agency Act 1994
86. Interview, Eben Apesegah
87. Security and Exchange Commission, 'Petroleum agreement between the Republic of Ghana, Ghana National Petroleum Corporation, Kosmos Energy Ghana HC and the E O Group, 2004', (30 June 2013), p. 76.
88. ISODEC/Oxfam America, Ghana's Big Test, p. 31.
89. Republic of Ghana, Petroleum Exploration and Production Law 1984, p. 11.
90. Joe Amoako-Tuffour, 'How Ghana plans to manage its petroleum revenues: a step towards transparency, accountability and governance standards' (Institute of International Affairs, Accra, October 2010), p. 16.
91. Petroleum Revenue Management Act (Act 815), Section 17 and Section 23
92. It is also worth noting that 70 percent of all oil revenues allocated to ABFA are under the direct control of the government and can thus be spent for any purpose approved by Parliament. This provides opportunity for a wide range of revenue misappropriation and embezzlement.