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

    Wife of IS Leader Charged in Death of US Hostage

    Suspect allegedly admitted to being responsible for American aid worker Kayla Mueller, who officials say was sexually abused and ‘owned’ by one IS member

    Year of the Monkey Could Prove Economic Balancing Act for China

    China is up against a tricky situation on the financial front, facing the need to fight capital flight while also stopping a further slide of foreign currency reserves

    Runners Attempt 26-mile South Pole Marathon in Sub-Zero Temperatures

    How alluring is running 26.2 miles at 10,000 feet when it’s minus 31 Celsius out?

    By the Numbers

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    'No Means No' Program Targets Sexual Violence in Kenyai
    X
    February 08, 2016 4:30 PM
    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video 'No Means No' Program Targets Sexual Violence in Kenya

    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video New Hampshire Voters Are Independent, Mindful of History

    Once every four years, the northeastern state of New Hampshire becomes the center of the U.S. political universe with its first-in-the-nation presidential primary. What's unusual about New Hampshire is how seriously the voters take their role and the responsibility of being among the first to weigh in on the candidates.
    Video

    Video Chocolate Lovers Get a Sweet History Lesson

    Observed in many countries around the world, Valentine’s Day is sometimes celebrated with chocolate festivals. But at a festival near Washington, the visitors experience a bit more than a sugar rush. They go on a sweet journey through history. VOA’s June Soh takes us to the festival.
    Video

    Video 'Smart' Bandages Could Heal Wounds More Quickly

    Simple bandages are usually seen as the first line of attack in healing small to moderate wounds and burns. But scientists say new synthetic materials with embedded microsensors could turn bandages into a much more valuable tool for emergency physicians. VOA’s George Putic reports.
    Video

    Video Bhutanese Refugees in New Hampshire Closely Watching Primary Election

    They fled their country and lived in refugee camps in neighboring Nepal for decades before being resettled in the northeastern U.S. state of New Hampshire -- now the focus of the U.S. presidential contest. VOA correspondent Aru Pande spoke with members of the Bhutanese community, including new American citizens, about the campaign and the strong anti-immigrant rhetoric of some of the candidates.
    Video

    Video Researchers Use 3-D Printer to Produce Transplantable Body Parts

    Human organ transplants have become fairly common around the world in the past few decades. Researchers at various universities are coordinating their efforts to find solutions -- including teams at the University of Pennsylvania and Rice University in Houston that are experimenting with a 3-D printer -- to make blood vessels and other structures for implant. As VOA’s Greg Flakus reports from Houston, they are also using these artificial body parts to seek ways of defeating cancerous tumors.
    Video

    Video Helping the Blind 'See' Great Art

    There are 285 million blind and visually impaired people in the world who are unable to enjoy visual art at a museum. One New York photographer is trying to fix this situation by making tangible copies of the world’s masterpieces. VOA correspondent Victoria Kupchinetsky was there as visually impaired people got a feel for great art. Joy Wagner narrates her report.
    Video

    Video Sanders, Clinton Battle for Young Democratic Vote

    Despite a narrow loss to former Secretary of State Hillary Clinton in last week's Iowa Democratic caucuses, Vermont Senator Bernie Sanders secured more than 80 percent of the vote among those between the ages of 18 and 29. VOA correspondent Aru Pande talks to Democrats in New Hampshire about who they are leaning towards and why in this week's primary.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.