News / Africa

Newly Oil-Rich Ghana Struggles to Please

When Ghana struck oil in 2007, citizens expected the industry would bring them better lives and investors anticipated hefty profits from a rising African economic star.

Six years later, all of them are complaining.
Lower-than-expected production from the offshore Jubilee field and funding a costly presidential election process in 2012 have left the West African nation struggling to deliver promised development projects while keeping its finances in order.
The situation underscores the complex reality of translating raw materials into prosperity on a continent notorious for the 'resource curse'' of graft, strife and mismanagement that has hit oil-rich countries like Nigeria, Angola and Equatorial Guinea.
Ghanaian president John Dramani Mahama gives a speech in Accra, Dec. 10, 2012.Ghanaian president John Dramani Mahama gives a speech in Accra, Dec. 10, 2012.
Ghanaian president John Dramani Mahama gives a speech in Accra, Dec. 10, 2012.
Ghanaian president John Dramani Mahama gives a speech in Accra, Dec. 10, 2012.
Newly-elected President John Dramani Mahama is walking a fiscal tightrope between ordinary Ghanaians demanding swift change and investors alarmed by the country's ballooning debt.
A stumble could prove politically costly for Mahama and
financially disastrous for Ghana as it seeks to retain its access to credit to fund rapid growth.

"Because of oil production, rising expectations in Ghana
will have to be met. But at the same time, past policy choices constrain the room for maneuver and Ghana is toeing a very delicate line,'' said Razia Khan, Africa analyst at Standard Chartered Bank in London.
Eschewing the deepest of cuts, Ghana's 2013 budget plotted a middle-of-the road route intended to trim the deficit while using increased revenues to fund a jump in public spending.
Last month, Finance Minister Seth Terkper unveiled plans to pare the government's deficit to 9 percent of gross domestic product (GDP) this year from 12.1 percent in 2012, while cranking up expenditures by 20 percent.
That disappointed economists who were expecting Ghana to reaffirm its commitment to a deficit of 6 percent of GDP - the target it set and then widely missed in 2012.
Rating agency Fitch had already downgraded the outlook for Ghana's credit rating to negative from stable in February after details emerged of deteriorating public finances, a blow to its reputation as a model of African potential.
Total public debt rose by more than a fifth last year to
$18.8 billion, versus $15.3 billion in 2011.

Studying under trees

Rare in a region where coups, civil wars, disputed elections and strong-arm rulers are the norm, Ghana has distinguished itself with six peaceful transfers of power via the ballot box.
That reputation allowed it to launch a $750-million eurobond in 2007 and helped it secure the accolade of hosting Barack Obama for his first African trip as U.S. president in 2009.
Across the capital Accra, evidence of new resource wealth abounds: brightly-lit multi-storey buildings, cranes looming over construction sites, well-paved roads and billboards advertising banks, cars and mobile phones.
But many Ghanaians remain excluded. An influx of rural
workers hoping for jobs in Accra, has spawned a sprawl of outlying shanty towns and spilled vendors across the streets.

Standing in a trash-strewn courtyard, 49-year-old school teacher Monica Quansah wonders where the oil money is going.
"Our children are still attending school under trees,'' she said. "Those of us in the city don't have reliable power and water, let alone those in the regions.''
Grace Asantewaa, who voiced hope three years ago that oil would improve people's lives, said she had yet to see any benefit.

"Nothing has changed. We are even worse off than before because prices have shot up significantly,'' she said behind her stall of tomatoes and chilli peppers at the teeming Agbogbloshie market along a potholed road in the seaside capital.
Mahama won the presidency in December by tapping into public frustration at the slow pace of change for ordinary Ghanaians.
Among other things, he promised to build 200 new school blocks within his first four years, bolster crumbling water and power infrastructure, pave roads outside Accra and sustain economic growth at 8 percent or more.
But he was dealt a tough hand.

Technical hitches meant Tullow Oil's Jubilee field, 80 km (50 miles) offshore and the prime engine for revenue growth, produced 72,000 barrels per day in 2012, well shy of a 90,000 bpd target.
A report last month showed Ghana received $540 million from the oil industry last year, far short of a projected $774 million. About $32 million of that was saved in Ghana's two-year-old sovereign wealth fund, which was valued at about $72 million at the end of 2012.

Nigeria's oil-fed sovereign wealth fund, by comparison, is worth about $1 billion.
A public pay hike and election spending after the sudden death of President John Atta Mills in July further squeezed finances. Simply organizing the voting last year cost $125 million - over one percent of planned annual public spending.
Ghana has missed its budget deficit target in every election year since constitutional rule was restored in 1992. Vice President Kwesi Amissah-Arthur said the government chose slow fiscal consolidation to balance growth and stability.
"An attempt to correct the fiscal imbalance in one year
would be extreme,'' he said. "We'd be putting the brakes on at a time when we also have the responsibility to ensure economic growth to create employment opportunities for our people.''

The West African country ranked among Africa's fastest growing economies in 2011 and attained a lower middle-income status, propelled by the 2010 start up of oil production.
With reserves of 800 million barrels of high-quality oil and potential for at least one billion more, the field makes Ghana one of sub-Saharan Africa's top 10 oil producers. Tullow hopes to produce 120,000 bpd this year and 200,000 bpd by 2015.
Tough decisions

Despite the budgeted spending jump, Ghana will struggle to fulfil the social projects planned this year, said Amissah-Arthur, who also chairs Ghana's economic management committee.
"It means we could only be providing one or two of those school blocks this year and that's not good enough,'' he said, adding the government was seeking private sector investment.
Ghana is also grappling with power and water infrastructure problems that authorities say will require hundreds of millions of dollars to fix. Payments to private-sector healthcare providers and some public-sector workers are also in arrears.
Joe Abbey, economist at the Accra-based Center for Policy Analysis, said the government must prioritize.
"There are verifiable deficiencies in our infrastructure.
The most critical one is energy,'' he said. "It's a huge problem because every economic activity depends on reliable energy.''
In an ironic twist to the nation's status as an oil
producer, Ghanaian power utility, Volta River Authority, has been rationing power since September because it lacks the money to buy light crude after a subsea pipeline was damaged.

Ghana is hoping to start producing its own natural gas to generate power by year-end, but until then residents will have to bear power cuts lasting 12 hours every other day.
In a sign the government is feeling the financial pressure, Mahama's administration slashed fuel subsidies in February, resulting in a 20-percent rise in prices at the pump.
"We must learn to cut our coat to fit out cloth,'' said Bruce Ayiku, a 53 year-old physician. "There's too much extravagance around government machinery of late.''

You May Like

Video Americans, Tourists, Reflect on Meaning of Thanksgiving

VOA garnered opinions from several people soon after November 13 Paris attacks, which colored many of their thoughts

Video Thais Send Security Concerns Down the River

In northern Thailand, the annual tradition of constructing floating baskets to carry away the year’s bad spirits highlights the Loy Krathong festival

Video Tree Houses - A Branch of American Dream

Workshops aimed at teaching people how to build tree houses have become widely popular in America in recent years

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.
Belgium-Germany Border Remains Porous, Even As Manhunt For Paris Attacker Continuesi
Ayesha Tanzeem
November 25, 2015 10:46 PM
One of the suspected gunmen in the Nov. 13 Paris attacks, Salah Abdeslam, evaded law enforcement, made his way to Belgium, and is now believed to have fled to Germany. VOA correspondent Ayesha Tanzeem makes the journey across the border from Belgium into Germany to see how porous the borders really are.

Video Belgium-Germany Border Remains Porous, Even As Manhunt For Paris Attacker Continues

One of the suspected gunmen in the Nov. 13 Paris attacks, Salah Abdeslam, evaded law enforcement, made his way to Belgium, and is now believed to have fled to Germany. VOA correspondent Ayesha Tanzeem makes the journey across the border from Belgium into Germany to see how porous the borders really are.

Video Islamic State Unfazed by Losses in Iraq, Syria

Progress in the U.S.-led effort to beat Islamic State on its home turf in Iraq and Syria has led some to speculate the terror group may be growing desperate. But counterterror officials say that is not the case, and warn the recent spate of terror attacks is merely part of the group’s evolution. VOA National Security correspondent Jeff Seldin has more.

Video Taiwan Looks for Role in South China Sea Dispute

The Taiwanese government is one of several that claims territory in the hotly contested South China Sea, but Taipei has long been sidelined in the dispute, overshadowed by China. Now, as the Philippines challenges Beijing’s claims in an international court at The Hague, Taipei is looking to publicly assert its claims. VOA’s Bill Ide has more from Beijing.

Video Syrian Refugees in US Express Concern for Those Left Behind

Syrian immigrants in the United States are concerned about the negative tide of public opinion and the politicians who want to block a U.S. plan to accept 10,000 Syrian refugees. Zlatica Hoke reports many Americans are fighting to dispel suspicions linking refugees to terrorists.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs