News / Africa

Ghana’s Oil Wealth Not Reaching Poor

Taxis drivers wait for passengers near an beachfront slum in Accra's Jamestown (VOA/Laura Burke, Sept 2012).
Taxis drivers wait for passengers near an beachfront slum in Accra's Jamestown (VOA/Laura Burke, Sept 2012).
Two years after oil began flowing in Ghana, ordinary Ghanaians are wondering where the oil money is going. The government says there has not been much oil revenue coming in thus far, and analysts say the money that is coming in is not reaching the poor.

Like many Ghanaians, Julie Anum had expectations that oil production, which began in December of 2010, would bring about epic changes to life in Ghana. The 54-year-old housekeeper said Ghanaians like her thought oil money would bring about free electricity, free medical care and more jobs.

High expectations

"Because we’ve been hearing from other countries that when there is oil, they have everything for free. If it’s been flowing for two years, then there should be a change," she said. "There should be an improvement in people’s lives. Because you know we have so many in unemployment. So if the oil has started flowing, then they should employ more people to work on the field, the oil field and maybe in their offices. The ministry should employ many people."

Vast reserves of oil were discovered in Ghana in 2007, and production began almost two years ago in the Jubilee Oil Field off Ghana’s western coast.  In 2011, its first year of production, Ghana brought in about $444 million -  which was half of expected revenue.

The oil revenue gets divvyed up between the national oil company to fund its share of operations in the field, an investment and savings fund, and then the annual budget funding amount, which can be used in the current year.

But Finance Minister Kwabena Duffour says Ghana has not yet been able to get enough revenue from the oil to bring about changes for the wider population. He says the revenue in 2011 amounted to about one percent of Ghana’s GDP.

In 2011, government documents show that some $167 million in oil revenue went into the annual budget - and only a percentage of that into social services.

"Insignificant" impact

Bright Simons, the director of Development Research at IMANI Center for Policy and Research, an Accra-based think tank, agrees the money has not been sufficient.

“The money that’s supposed to go into the funding of social services, etc, has been very miniscule compared to a… GDP of $38-39 billion," said Simons. "You know, probably $13 million or so may have gone into the budget, into social services. That is clearly less than 0.1 percent. So when you look at the impact that oil money on social services has had over the last couple of years, its insignificant." 

The Finance  Ministry projects that Ghana’s oil revenue will not increase significantly until 2014 or 2015 when production should reach peak levels.

Not a simple issue

Even then, economists say there are challenges to making oil production benefit the wider population.

Nicolas Depetris Chauvin, a senior advisor at the Accra-based African Center for Economic Transformation, says the greatest benefits to a local economy are seen when countries don’t just export a raw material, but process that raw good into other products.

"Think - the Arab countries. The Arab countries, when they discovered oil 90 years ago, they were exporting raw oil," he said. "Now, you go to Saudi Arabia or to Dubai or Abu Dhabi and you ask them: Are you in the oil business? They will tell you no, no. I’m not in the oil business. I’m in the energy business. I’m in the aluminium business, I’m in the steel business. So they have used the fact that they have oil as a resource to develop other industries.”

Depetris Chavin says the problem is that Ghana’s oil is only predicted to last about 20 years, and it would take a long time to build up the infrastructure and capacity for new industries.

Another solution, Simons suggests, is for the oil companies to contribute to the local economy. He said they should buy local products and support local industry. Simons said right now even products like bread are imported onto the oil rigs, and only local elites are profiting from oil contracts thus far.

He and other analysts agree that  as long as the oil industry continues to be an enclave industry with very few links to the community, it’s unlikely Ghana’ oil will benefit the poor.

You May Like

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants More

Russia’s Prosecutor General to Review Legality of Baltics Independence

Move, announced Tuesday, has alarmed Baltic States and strained even further their increasingly tense ties with Moscow More

US Urged to Keep Up Pressure on Cuba Rights

Communist government continues to hold dozens of political prisoners, tightly restricts freedom of expression, uses threats, intimidation to discourage critics, according to activist groups More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Hate Groups Spread Influence Via Interneti
X
Mike O'Sullivan
June 30, 2015 8:20 PM
Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Syrians Flee IS Advance in Hasaka

The Syrian government said Monday it has taken back one of several districts in Hasaka overrun by Islamic State militants. But continued fighting elsewhere in the northern city has forced thousands of civilians from their homes. In this report narrated by Bill Rodgers, VOA Kurdish Service reporter Zana Omer describes the scene in Amouda, where some of the displaced are taking refuge.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video S. Korea Christians Protest Gay Rights Festival

The U.S. Supreme Court decision mandating marriage equality nationwide has energized gay rights supporters around the world. Gay rights remain a highly contentious issue in a key U.S. ally, South Korea, where police did a deft job Sunday of preventing potential clashes between Christian protesters and gay activists. Kurt Achin reports from Seoul.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video Nubians in Kenya Face Land Challenges

East Africa's ethnic Nubians have a rich cultural history that dates back thousands of years, but in Kenya they are facing hardships, including the loss of lands they have lived on for generations. They say the government has reneged on its pledge to award them title deeds for the plots. VOA's Lenny Ruvaga reports.
Video

Video Military Experts Question New Russian Tank Capabilities

Russia has been showing off its new tank design – the Armata T-14. Designers claim it is 20 years ahead of current Western designs - and driving it feels like playing a computer game. But military analysts question those assertions, and warn the cost could be too heavy a burden for Russia’s struggling economy. Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.
Video

Video In Syrian Crisis, Social Media Offer Small Comforts

Za’atari, a makeshift city in Jordan, may be the only Syrian refugee camp to tweet its activities, in an effort to keep donors motivated as the war in Syria intensifies and the humanitarian crisis deepens. Inside the camp, families say mobile phone applications help hold together families that are physically torn apart. VOA’s Heather Murdock reports.

VOA Blogs