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

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More