The academy and the successful management of Ghana’s petroleum resources – Document – Gale Academic OneFile

This study advocates new roles, especially for public universities, to ensure socially productive uses of Ghana’s new petroleum resources. It stresses the urgent need for tertiary institutions to be engaged in this industry. Academics cannot sit on the fence or offer what-went-wrong analyses as they did in the past. This study advocates practical, smart public-policy solutions to challenges posed by oil, notably the absence of a well-articulated national vision or plan to train Ghanaians to promote substantial local content and prepare for legal, financial, health, environmental, and safety issues linked to petroleum production. The aim is to nudge academics to take some responsibility and initiative for appropriate petroleum policies, legislation, and practices that will work in and for Ghana to evade the proverbial resource curse, which afflicts most of Africa.

Full Text: 

Aims of This Study

This paper seeks to challenge the Ghanaian academic community to
reflect and be more active in helping the nation avoid the resource curse
associated with crude oil and gas (OG). In this study, the word academia
refers to the faculty, staff, and researchers based at universities, both
private and public, in Ghana. A key goal is to draw attention to petroleum
matters, for which solutions are proposed. To serve as the basis for
effective advocacy for viable public policies, laws, and practices, this
article conveys both positive and not-so-positive developments related to
Ghana’s OG in the last few years. It encapsulates popular questions the
author faced during field studies in Ghana from 2009 to 2013, typically
whether Ghana has bad oil contracts, what the reasons are that oil companies
do not pay corporate taxes, and whether Ghana has bad oil leases because the
public administrators are incompetent and dishonest. Another common inquiry
is “What is the extent of corruption in Ghana’s OG?” (1) This
is reminiscent of what a senior public employee, Clement Dandori, the
regional coordinating officer, said during the author’s fieldwork in
Sekondi-Takoradi in 2009: “Even with gold that is located inland, you
did not do well, so how are you going to succeed with oil that is located in
the sea?” (2)

Because 2013 was Ghana’s third year of production and major
phenomena are still unfolding, this paper’s findings are tentative;
however, the main objective remains the creation of a catalyst for robust
public discussion among Ghanaian and other African academics to motivate them
to aid in building an industry that can blossom and improve the quality of
life of most citizens, and not just a few, as has been the case in most of
Africa. In seeking to accomplish this, the author is mindful of Cyril
Obi’s relevant observations, aptly summed up by Okpanachi and Andrews
(2012:432):

   The resource curse is not without a "cure," and it is neither
   inevitable nor deterministic.... There are hard choices to be made
   if countries are to avoid the resource curse. For instance, the
   argument that institutions matter raises the question as to the
   ways in which institutions may affect the resource development of a
   country. It also raises the question as to specific institutional
   designs that are most likely to mitigate the resource curse and
   transform resource wealth toward improving the well-being of the
   populace, as well as ... the linkages between the
   local-national-global in resource-rich countries.

This paper has four premises. First, OG in Ghana will not
automatically lead to good outcomes, such as economic growth with broad
social benefits, unless they are managed judiciously. Second, judicious uses
will flow only from a vision that drives pertinent smart policies,
legislation, and practices. Third, a litmus test for the viability of the
vision proposed is that it must not only be well articulated but yield
maximum state revenues, to be deployed effectively by reducing wastage and
minimizing the physical or environmental and social damage while generating
the most jobs, careers, and participation of local businesses. Fourth, the
elite, including, academics and university administrators, must band together
to get public administrators in all governments in Ghana, without exception,
to put the country’s petroleum resources to optimal use; this may
require academics to form a coalition of stakeholders whose task is the
avoidance of the resource curse.

Fulfilling the conditions stipulated is one of the necessary paths
to ensuring that Ghanaians, whom the Constitution of 1992 and the Model
Petroleum Agreement (MPA) of 2000 (3) define as owners of the petroleum
resources, derive maximum benefits. These include benefits that the Council
for Scientific and Industrial Research (CSIR) has identified can be generated
using appropriate local enterprise development strategies in the Nkosoo 2015
Project (CSIR SINTEF-STEPRI 2010), which recommends the use of crude OG to
set up manufacturing estates. An important benefit is that more Ghanaian
businesses will participate in the OG sector to generate jobs with good pay
and benefits and hence create multiplier positive effects. In addition, if
Ghana positioned itself to use petroleum as the foundation for a solid
industrial sector, Ghanaians will reap more benefits than exporting it for
foreign exchange, as has been done for more than 120 years with cocoa beans,
timber logs, bauxite, unrefined gold, and uncut or unpolished diamonds
(Economist Intelligence Unit 2012). By depending on raw material exports,
Ghana has failed to add value to benefit more from natural resources and not
generated decent jobs for the unemployed masses, including pregnant women
peddling yams and imported onions in heavy traffic, breathing fumes from
vehicles running on leaded gasoline. Ghana exports minimally refined gold to
Switzerland, where it is further refined, stored, and sold (Ayensu 1997); by
so doing, Ghana exports high-paying jobs that could have gone to its citizens
if it had refineries and facilities for marketing precious metals.

Background and Facts on Ghana’s OG

Before 2007, Ghana produced small quantities of oil from an
offshore oil field near Saltpond, ninety-eight miles from the capital, Accra
(Daily Graphic 2007c). In May 2012, the Saltpond field produced seven hundred
barrels of oil per day (bopd), with the Ghana National Petroleum Corporation
(GNPC), the nation’s oil company (NOC), as one of two operators (PIAC
2011); however, in June 2007, the Jubilee Field Phase 1 (Jubilee or JBF1)
partners–Kosmos, Tullow, GNPC, Anadarko, E&O, and Sabre Oil and
Gas–announced the discovery of one of Africa’s largest reservoirs of
oil in Ghana (Amoako 2007; Daily Graphic 2007b). Where the new discovery
occurred was dubbed Jubilee Field 1 to commemorate Ghana’s fiftieth
independence anniversary (GNPC 2008). This field is expected to produce
120,000 bopd; by comparison, the largest new field in the Gulf of Mexico,
operated by Chevron, was expected to produce 109,000 bopd (Ordonez 2011).

JBF1 is sixty-four kilometers from Cape Three Points, near the
Ivory Coast border with Ghana in the Western Region. The OG infrastructure at
Jubilee is more than a mile deep in the Gulf of Guinea in the Atlantic Ocean
off the coast of West Africa. The development of Jubilee took forty months,
record time (Tullow 2011). The industry average is up to seven years from
discovery to production. JBF1 was commissioned on December 15, 2010, when the
first oil, 55,000 barrels, was lifted for sale to the international market.
Jubilee is estimated to contain between 800 million and 1.5 billion barrels
of crude and between 800 million and 1.2 trillion cubic feet of gas (GNPC
2011); it could last twenty years and be valued at $8 to $10 billion (GNPC
2008). If its expected production materializes, it and other fields could
catapult Ghana to the top nine OG nations in sub-Saharan Africa (Wall Street
Journal 2009:A10). Continued successful oil production in Ghana could help
the Gulf of Guinea nations become major crude producers (McCaskie 2008).

Jubilee Field partners are small, independent companies, except
GNPC, Ghana’s sole NOC (McCaskie 2008:19). Tullow, the main Jubilee
operator, is a British-owned corporation, listed on the Ghana Stock Exchange.
Tullow partners with Kosmos (backed by Blackstone, a major US investment
firm), the Texas-based Anadarko, and the Pennsylvania-based Sabre Company.
E&O, which has liquidated its assets in the Jubilee Field (PIAC 2011),
was founded by Ghanaians. PNDCL 64 of 1983 created GNPC statutorily. In
accordance with existing petroleum agreements, Ghana earned a 5 percent
royalty on gross oil produced and 13.75 percent of net oil produced at
Jubilee in 2011. The latter figure represents the GNPC’s 10 percent
share in Jubilee and payments such as surface rentals (PIAC 2011). Until
2011, when, by the terms of the Petroleum Commission Act (PCA) of 2011, the
Petroleum Commission (PC) was founded as the sole OG regulator, the GNPC had
a dual mandate: to partner with multinational oil companies (MNOCs) for
exploration, development, and production (EDP) and simultaneously to regulate
OG operations and market oil produced in Ghana. Since 2011, it has been
expected to focus exclusively on EDP.

By December 2011, the Jubilee partners had lifted twenty-two
million barrels of crude (Ghana Business and Finance 2011). Some of the
field’s seventeen wells are dry, causing the original target of 120,000
bopd to have been missed. This reflects technical bottlenecks with well
completions, concerning, for example, how the wells were developed
(Asafu-Adjaye 2012); another problem “is sand seeping into and blocking
wells” (Tullow 2012). As a result, from December 2010 to February 2012,
peak production was 80,000 bopd; however, in June 2013, output shot up to
105,000, and then in October 2013 to 115,000 bopd, after the dry wells had
successfully been stimulated (Business and Financial Times 2013; Daily
Business News 2013; Kobbie 2013). Plateau–final target–production at
Jubilee is pegged at 120,000 bopd because of the capacity of the Flotation
Production Storage and Offloading (FPSO) MV 21 Kwame Nkrumah to store and
process approximately 120,000 bopd. Therefore, the Jubilee Field could expand
its output with additional processing and storage facilities.

Because of technical glitches with wells and oil leases which are
highly unfavorable to Ghana, the country has earned only half the projected
revenues from OG. Based on the state and GNPC’s stake and other incomes,
it was expected that Ghana would earn as much as US $1.3 billion per annum
(Institute of Economic Affairs 2009; Wall Street Journal 2009); however, as
of May 2012 (the second year of production), the country had received less
than US $1 billion. Two companies, Cirrus and Woodfields Energy Resources
(formerly called Vitol), help GNPC to sell Ghana’s share of crude to
China at prices more competitive than those of the share taken by Tullow and
Kosmos (PIAC 2011).

An important feature of OG so far in Ghana is the limited
employment created by the upstream facet comprising EDP. (4) It is both
capital and technology intensive, but it has not led to the abundant jobs
that Ghanaians had anticipated (Marfo 2011:19). The low labor-to-capital
ratio and the high cost of investments in the upstream sector in Ghana is
attested by the fact that in mid-2012, there were only 1500 employees, with
57 percent (or 840) being indigenous (Adu-Gyamerah 2012). These included 150
workers employed on the FPSO Kwame Nkrumah, which Tullow bought from MODEC
for US $750 million in 2011 (PIAC 2011). According to the Ghana PC, from June
2007 to December 2011, US $16 billion was spent on OG activities, with only 5
percent (US $800 million) sourced locally (personal communication, Accra, 14
February 2012). Most purchases were made overseas, with few or no local
benefits in terms of positive multiplier effects, such as local supplies and
jobs.

Even though Ghana since the early 1960s has had the Tema Oil
Refinery (TOR), not a single drop of Jubilee crude is being refined locally.
This situation does not seem likely to change soon. Officials interviewed by
this author justified the decision not to supply TOR on many grounds: first,
TOR is not financially viable; second, high-quality Jubilee crude is more
profitable to sell on the international market than to refine domestically.
One respondent claimed that selling to the international market will
“brand Ghana’s oil and make the country’s international
prestige soar.” Another respondent claimed that the crude from JBF1 is
“not compatible chemically or physically” with TOR, and that
retrofitting is prohibitively expensive. If it is true that retrofitting is
not feasible, then future oil leases should require the establishment of new
local refineries, as leases in Uganda do (Ojambo and Bakhsh 2013). Another
important feature of the modern-day OG industry is high technology,
state-of-the-art types, costing millions and at times billions of dollars or
cedis (Ghanaian currency). For instance, the FPSO Kwame Nkrumah, the main
vessel for processing and offloading crude and gas, is a refurbished oil
tanker, originally expected to cost close to a billion dollars, but acquired
by Tullow for US $750 million. Jubilee Field Phase 2 (JFP2), aimed at
boosting OG output, required US $4 billion in new investments. Meanwhile,
because of the use of four-dimensional (4-D) seismic data for EDP,
three-dimensional (3-D) data are becoming obsolete (interview, Oil Rig
Workers Association, Accra, June 5-6, 2012).

The Ministry of Energy and Petroleum (MOEP) and the PC in
overseeing OG operations and licensing in Ghana represent the state. The PC
has taken over the regulatory roles of the GNPC, while MOEP sets and
implements broad policies (PIAC 2011). Though the MPA of 2000 expressly
states that oil agreements involving the GNPC do not make it a partner with
MNOCs in the strict legal sense, it functions as most companies do in oil
exploration, production, and marketing, in a classic partnership fashion;
besides, current oil leases defy classification (Panford 2010) because of
their unusual features. The GNPC’s operations and relations with MNOCs
show that oil leases in Ghana are not service contracts, not royalties, and,
as noted, not legal partnerships.

Oil Revenues, Financing, and Management in Ghana

According to respondents who are also petroleum experts,
Ghana’s financial difficulties stem from the “the country putting
the cart before the horse” (discussions with Dr. Robert Adjaye, Rector,
Petroleum Skills Development Institute, Accra, June 6, 2013, and Captain
Edwin Annang-Botchway, Harvard Marine Petroleum Skills Development Institute,
Takoradi, June 18, 2012). These difficulties show that Ghana did not plan for
or create key institutions before oil leases were signed. As a result, from
December 2010 to 2013, the country lost millions of dollars because it did
not develop the capacity to capture natural gas left over after gas is used
to power the FPSO Kwame Nkrumah and for oil-well safety (discussions with rig
workers, Accra, June 5-6, 2012; Tullow 2011). Much of the gas produced will
be flared until part of a US $3 billion credit facility from China is used to
finish a gas infrastructure in the Western Region (Business and Financial
Times 2013). Gas from JBF1 worth US $2 billion is not only being wasted and
costing financial losses to the state, but polluting the atmosphere through
flaring–a situation contrasting with the expectation that there would be no
flaring (discussions with informants in Ghana by the author, fall 2009).

Ghana passed Act 815, the Petroleum Revenue Management Act (PRMA)
of 2011 to manage petroleum revenues. This act restricts the state to
spending 70 percent of yearly receipts from OG. The remaining 30 percent is
to be placed into the Petroleum Funds (PF), comprising the Heritage Fund (HF)
and the Stabilization Fund (SF). These funds are in the custody of the Bank
of Ghana and managed by an investment advisory committee (IAC) (PIAC 2011).
The SF is a rainy-day fund, to be used in case of revenue shortfalls; the HF
is a fund for investments to benefit subsequent generations. Revenues flowing
into and expenditures made out of PF are overseen by a PIAC comprising
interest groups and representatives of civic associations. The PIAC derives
its mandate from the PRMA and submits annual reports to Parliament for review
to ensure that PF are being used according to the PRMA.

The author’s reviews of public and confidential sources and
participation as the lead technical consultant in writing the first report of
the PIAC (2011) confirm that as of February 2012, the second full year of oil
production, not much revenue had flowed into the PF. From December 2010, when
JBF1 was commissioned and the first oil was lifted for sale, to February
2012, only US $444 million had accrued to the fund, including principal and
interest. By the fourth quarter of 2012, total state revenue from petroleum
was US $933 million (Daily Graphic 2013). Thus, two full years of oil
production did not yield the projected revenue of US $1.3 billion per annum,
even when petroleum was being sold for around US $100 per barrel on the world
market (Time 2012; Wall Street Journal 2012).

Many factors account for the anemic OG revenues. First, technical
problems with wells prevented the operators from hitting the anticipated
target of 120,000 bopd. In the first two years, maximum production was 80,000
bopd. Additionally, government revenues have been low, reflecting excessively
liberal terms in OG leases and creating a paradox: a poor nation bearing huge
financial risks and reaping low financial rewards from its first commercial
oil field. A business practice called thin capitalization, which favors
MNOCs, has made this possible (PIAC 2011); this means making huge profits
with low capital investment. It is happening in Ghana because Jubilee’s
main operators borrow funds to finance their activities instead of using
their own savings or equity from investors. For example, for JBF1 operations,
Tullow borrowed US $115 million, and Kosmos US $100 million, from the
International Finance Corporation (IFC), a division of the World Bank that
finances private enterprises (Boohene and Peprah 2011:185; World Bank 2009a,
2009b, 2010). Recent refinancing of Tullow’s debt illustrates the
important adverse effects of thin capitalization. Tullow refinanced reserves
based on a US $3.5 billion lending facility that was to expire in 2015 and
acquired a new US $3.235 billion loan with additional US $100 million from
the IFC and twenty-six other creditors, leading to the observation:
“‘this will provide a solid foundation for funding … major
development projects in Ghana as well as other capital
investments'” in Tullow’s heavy exploration program (Ghana Oil
and Gas Online 2012); this particular source concludes that Tullow’s
exploration in Ghana was made possible only by massive borrowing. Since
existing leases allow MNOCs to deduct business expenses, including interest
payments, without limits, Tullow, Kosmos and other companies deduct interest
from corporate taxes they owe, thus making the people of Ghana bear the cost
of loans obtained by oil companies while the country earns less than half of
what was forecast. Hence, thin capitalization has reduced to zero the
corporate taxes paid by MNOCs in the past and for at least the next two years
(Kobbie 2011; PIAC 2011).

Additional factors have created a situation in which, for five
years, oil companies may pay zero corporate taxes in Ghana. Because of false
assumptions, such as arguments (often repeated) that Ghana can attract
foreign oil companies and create desperately needed jobs only by granting
overly generous terms (Ali-Nakyea 2011; information from MOEP officials,
Accra, February 2012), Jubilee operators are exempt from taxes on imported
supplies, equipment, and even the crude they export. For imports, they pay
only nominal fees, while expatriate personnel do not pay income taxes
irrespective of their pay. If income taxes were paid, they would be only 5
percent, just as the Jubilee operators pay low surface rentals of US $200 per
square mile for the use of territorial waters for petroleum production (PIAC
2011). In contrast, US government corporate taxes of 35 percent, plus state
taxes of 4.1 percent, are some of the highest in the world (Wall Street
Journal 2013). Even an effective tax rate of 12.6 percent paid (after tax
deductions and credits) by corporations in the United States is still much
higher than tax rates for Jubilee leases (Ghana Government 2004, 2006). This
has led to the observation that “companies are finding it easier to
explore in Ghana than some of its neighbors due mainly to overly generous
concessions. These include no front-end payments such as signature or
production bonuses; negotiable royalties and income tax” (Offshore Ghana
2011).

Liberal lease terms encourage MNOCs to be less efficient and cost
conscious. Why minimize costs, including those associated with financing,
when they can transfer virtually all expenses to Ghanaians and leave their
profits intact? As the European Commission aptly noted, “The risk posed
by these concessions is that petroleum entities can reduce their chargeable
profits by importing equipment from related parties at above market values
and claim accelerated capital allowances on those assets” (2011:5). This
appears to be the case with respect to taxes on capital gains, as MNOCs in
Ghana are allowed to depreciate their equipment purchases without any limit
and at 20 percent for five years, starting with the first year of oil sales.
Therefore, after acquiring the FPSO Kwame Nkrumah from MODEC in 2011 for US
$750, Tullow can reduce its tax liabilities by US $150 million per annum for
five years. That means US $450 million of its profits will not be subject to
any corporate taxes for the next three years or so, and that Tullow will
accordingly pay almost no corporate taxes for a while. Other fiscal
governance deficiencies include the moribund Petroleum Income Tax Law of 1987
(Ali-Nakyea 2011; PNDCL 64 1983:188), which, like PNDCL 84 of 1984, is
outdated because it was passed when Ghana was not producing commercial OG,
hence its ineffectiveness as a petroleum revenue law. Besides, according to
responses to a questionnaire and interviews with the GRA in Accra between
April and June 2012, the Petroleum Tax Division of the GRA had only one
statistician. The GRA is rectifying this anomaly by hiring more statisticians
to increase revenues from petroleum (information from the GRA, Accra, July
2013).

There are a few positive developments. The government’s share
of oil produced is sold at what has been determined to be competitive or
better world market prices. Ghana’s oil has sold at prices higher than
what Tullow has obtained (information obtained by author from drafting Public
Interest and Accountability Committee Report 2011). By January 2012, Ghana
had spent US $182,000 to sell its share of oil, resulting in an average cost
of eighty-eight cents per barrel, deemed to be lower than the industry
average. Thus, so far, Ghana’s oil has been sold at competitive prices
at costs lower than the industrial average.

Ghana may be commended for its handling of OG revenues so far.
Funds transferred to the Bank of Ghana were accounted for by May 2012, when
the PIAC issued its first report for 2011. Ghana’s central bank
fulfilled its statutory obligations under the PRMA by submitting an audited
account for the PF to the National Parliament (information from the Bank of
Ghana, Accra, March 2012). Thus, though Ghana has earned less than what was
projected from Jubilee, the author’s observations while reviewing
incomes and investments in the PF suggest that funds transferred to the Bank
of Ghana were accounted for up to 2012. This refers to the 30 percent of
revenues that the PRMA mandates the state to place into the PF. Visits by
this author to the Bank of Ghana in Accra in February and March 2012 found
that Ghana’s PF, as required by PRMA, was being managed by an IAC
founded in 2012 and led by one of the most competent international financial
specialists, Jude Kofi Bucknor, former treasurer of the African Development
Bank and vice president of American Express.

Petroleum Industry Regulation

Another major deficiency in Ghana’s petroleum governance is
the absence of up-to-date laws, regulations, and policies to safeguard
Ghanaians’ environment and health. Though through PRMA, PC Act, and the
Petroleum Local Content and Local Participation Regulations (PLCLPR) 2013
(L.I 2204) the country has taken important steps, evidence this author
gathered through fieldwork from 2009 to 2013 confirms that Ghanaians’
health and physical environment, like their financial stakes in OG
production, remain vulnerable. The country has a lot of catching up to do in
environmental management. The author’s tour of the western regional
office in June 2012 found that Ghana’s Environmental Protection Agency
(EPA) had only one official qualified to head an internationally certified
laboratory. This office has four small units for noise, air, and other
pollution and one Toyota pickup truck, purchased with World Bank funds. As if
these were not enough handicaps, EPA officials visit oil fields by hitching
for rides (or “lifts”) on MNCOs’ aircraft.

Even after establishing the PC to regulate the industry, Ghana
still lacks critical legislative instruments (LI) and regulations. Two laws
are so important that they deserve special attention and immediate
replacement: GNPC Law (PNDCL 64) of 1983 and Petroleum Exploration and
Production Law (PNDCL 84) of 1984. PNDCL 64 statutorily created the GNPC and
allowed it to acquire a 10 percent stake in all Ghanaian oil fields and
regulate OG activities using MPA (2000). After three full years of commercial
oil production, PNDCL 84 is still the main law for oil-related operations
(Panford 2010:90-91). These laws are not comprehensive and up-to-date because
they were passed when Ghana was not a commercial oil producer. (5) A danger
inherent in prevailing circumstances is that if companies pollute the
environment, Ghana may face serious legal obstacles because effective
environmental laws are absent (Smith 2010). Current governance of the
physical environment in regard to petroleum extraction is perilous and thus
needs to be remedied quickly. Because the country earns meager revenues while
being exposed to potentially serious environmental hazards, a contentious
matter arising is whether it needs to proceed more cautiously or even produce
for only domestic use before getting entangled in the complex web of
international petroleum. (6) In contrast, Uganda, which discovered commercial
oil before Ghana (in 2006), may produce for domestic use before exports and
require MNOCs to build local refineries (Ojambo and Bakhsh 2013).

Technological and Human-Resource Challenges Ghana Faces with
Petroleum Extraction

Auty’s (1993) resource curse and its twins, the paradox of
plenty and the Dutch disease (Gelb 1988; Krugman 1987; Maier 1996), can be
boiled down to counterintuitive observations or occurrences. Auty and his
protagonists take the position that countries with plentiful natural
resources, including Zambia (with copper) and Nigeria (with hydrocarbons),
are not developed: they have low to negative economic growth and tend to be
less politically stable, democratic, and corrupt. Their underdevelopment is
attributed to the abuses of natural resources. Negative or low growth is not
due to “lack of investment” but is caused by “the inefficiency
with which those investment resources were deployed” (Auty 1993:5). (7)
Though Auty and his colleagues’ analyses are the most popular
encapsulation of social and economic disasters associated with improper
natural resource deployment, this study relies on the analogy of “the
hornet’s nest which Ghana is about to stir” to draw attention to
the huge adverse consequences (Akpomuvie 2011; Obi and Rustad 2011) if
appropriate policies and laws are not instituted soon. Another concept
captures dramatically the potentially dangerous disasters Ghana may be
courting by not managing its hydrocarbons well. After becoming exasperated
with petroleum, Juan Pablo Perez Alfonzo, Venezuelan oil minister and a
founder of the Organization of Petroleum Exporting Countries’ (OPEC),
reportedly lamented that “it is the devil’s excrement. We are
drowning in the devil’s excrement” (Ross 1999:297). Alfonzo was
expressing his frustration with the failure of petroleum to deliver fantastic
development.

This study dubs certain constraints the triple challenges–the
formidable amounts of capital, high technology, and skilled personnel the
industry uses–which have to be tackled to ensure that petroleum becomes a
blessing. The following are real-life depictions from Ghana. The Jubilee
Partners sought US $4 billion to complete JFP2 (Bruce 2011:2); FPSO Kwame
Nkrumah cost Tullow US $750 million, while from June 2007 to December 2011 US
$16 billion was spent on OG, with only 5 percent of this expense being local
(discussion with the commissioner of the PC, Accra, February 14, 2012). At
the current pace of local business participation and employment of nationals,
the multiplier benefits from oil will take a long time to trickle down to the
teeming masses of unemployed Ghanaians, including more than 300,000 youths
who enter the labor market each year (Nyamiah 1999; Panford 2001).

Because prevailing conditions pose severe fiscal bottlenecks,
Ghana should position itself to create domestically adequate capital or
deploy foreign capital and technology on a competitive basis. To be
successful, Ghanaians have to be extraordinarily mindful of the minute and
complex nuances of all facets of the industry, from EPD to refining,
marketing, local content, and domestic uses and exports. The country has to
develop and maintain a national capacity to do due diligence and master the
crafting and application of contracts that will favor the country. This is
especially crucial with respect to the complex intricacies of OG financial
transactions.

As if Ghana’s challenges were not severe enough, the industry
exhibits rapid technological changes. Before the GNPC’s laboratory could
be upgraded to handle 3-D image seismic data, 4-D arrived. Most data owned by
GNPC are in two dimensions (interview with Oil Rig Workers’ Association,
Accra, June 5-6, 2012). This shows how quickly Ghana has to prepare to
utilize changing technology if nationals are to experience substantive job
growth in a nation with low technology absorption capacity and a workforce
without much formal education and training: the labor force structure is
similar to a pyramid, with a base of 26.7 percent of workers with minimum
education and 35.3 percent of workers who have never gone to school (Panford
2012; Prempeh and Kroon 2012; World Bank 2009a, 2009b).

Issues of available local expertise lead to queries such as how
many Ghanaians are certified for OG jobs and how many are in the pipeline to
provide workers as the sector grows. A challenge this author observed
firsthand is that, even if artisans have basic occupational skills, most
cannot read blueprints or use computer-aided design or computer numerical
control for machine-shop jobs, such as drafting and fabrication. Also,
because of a failure to link classroom instruction with the needs of industry
and the widespread use of informal apprenticeships, most education and
training tend not to be competency based or certifiable. With little or no
certifiable computer and other skills (AFREN et al. 2008a, 2008b) indigenous
artisans are not being employed in large numbers in OG today to reduce the
levels of joblessness (Panford 2014).

As much as Ghana’s current limitations are substantial and
hence cannot be dismissed, factors that favor the nation may be utilized to
improve the terms of future oil leases. They are the premium quality of
crude, the country’s relative political stability, and security and the
rule of law for investment (Diamond and Mosbacher 2013:86-98). As the US
government acknowledges, “With respect to transparency and
accountability, Ghana’s vibrant democracy, active press, and improving
governance are all indications that Ghana can avoid the ‘resource
curse’ that has plagued its neighbors” (World Bank 2009:1). Also,
the nation may use the experience the GNPC has acquired from operations in
Angola and Equatorial Guinea and the talents of Ghanaian and other African
diasporan populations (Odio-Larbi 2011). However, the resource curse
afflicting African nations (Kent, Faucon, and Scheck 2013) and Ghana’s
own abysmal record with timber, diamonds, and gold are stark reminders of
what will happen if it does not successfully tap its petroleum resources.
Though it is the number-two gold producer in Africa (after South Africa),
because of low state revenues, even the IMF urges the need for “raking
in more funds from mining” (Ablordeppey and Acheampong 2011). Meanwhile,
many local communities are paying a heavy price, such as displacement at
diamond and gold mines and other adverse effects of pollution associated with
mining and timber logging (Hilson 2004).

Local Content and Business Involvement: The Weakest Links in
Ghana’s OG

One of the surest means for Ghana to evade the resource curse and
its adverse consequences, including the “enclave effect” (Auty
1993), is assuring robust local content. This is “the level of use of
Ghanaian experts, goods, services and financing.” It entails the
creation of a “self-sustaining and buoyant economy that enhances
benefits to all segments of society and future generations,” to be
accomplished by increasing “local value-added investments” to
create jobs and boost “indigenous expertise and technology in all facets
of the industry” (Ministry of Energy 2010).

The essence of local content is widespread positive economic
outcomes. The enclave effect, in contrast, takes hold when natural resource
investments do not positively stimulate the adjacent local economy (Ministry
of Energy 2010). This may be the case in Ghana, where a paltry 5 percent of
US $16 billion was spent locally (information from Ghana’s PC, Accra,
February 14, 2012). Factors accounting for low local content include local
business participation in petroleum being confined to the retail of mostly
gasoline, diesel, and other imported products–brake fluid, kerosene, engine
oil, and processed liquid natural gas (8)–plus the fact that commercial
petroleum production is new.

Ghana since the early 1960s has had an oil refinery (TOR), but
because of management difficulties and politics, not a barrel of oil from
Jubilee has been refined locally (Ocloo 2011). The government, with GNPC and
remaining Jubilee partners, sells crude to the international market (PIAC
2011). Uganda, in contrast, plans to build a refinery to add value to its
crude and create jobs (Biryabarema 2012). Besides inadequate preparation
(from oil discovery in 2007 to production in 2010), many factors have
contributed to making the targeted 90 percent local content by 2015
unrealistic and being scrapped (Hobenu 2011). The new local content target is
90 percent by 2020. This has been necessitated by the fact that basic
supplies, such as bread, water, and vegetables, have been imported to oil
rigs and other installations (information confirmed by officials of the PC
and MNOCs, Accra, February 14, 2012).

Besides the novelty of Ghana’s OG, certain factors severely
constrain local content. Colonization led to little or no industrialization
and the necessary infrastructure, and the nascent industrial plans of the
Kwame Nkrumah-led Convention People’s Party (CPP) administration were
curtailed by the 1966 coup. As if ending the CPP’s industrial scheme
were not harmful enough, with encouragement from Western donors since 1986,
Ghana, like most African nations, has gutted its industrial base (Mkandawire
(1988); Panford 2001). With privatization and the redeployment of labor,
allegedly to enhance efficiency, state enterprises were sold, abandoned, or
converted into megachurches by pastors preaching the “prosperity
gospel” to large congregations in Accra and Tema, Ghana’s intended
industrial heartland. A hallmark of Ghana’s abysmally low level of
industrialization is the importation of toothpicks from China; meanwhile,
local factories are shut because bamboo, the key raw material, is unavailable
(Ghana News Agency 2012). (9)

The demise of the nation’s shipping and airlines–Black Star
Line and Ghana Airways–has hampered the supply of nationals qualified to fly
planes and maritime officers to service the upstream and midstream oil
sectors (Ghana Statistical Service 2005; Panford 2014). As a result, most
helicopter pilots servicing Jubilee have been expatriates, and mundane tasks,
such as anchoring tugs and boats that service OG fields, have been performed
by non-Ghanaians (author’s observations from tours of Tullow’s
Logistics Center, Takoradi, Airforce and Sekondi naval bases, July 2012). The
author’s examination of personnel-on-board data from actual manifests
for oil vessels and rigs showed Ghanaians were 30 to 35 percent of employees.
Original data from rigs that did exploration from 2010 to 2012 showed that
local workers were in the bottom rungs, operating as deckhands or
roustabouts–rudimentary and low-paying jobs for unskilled workers. Few, if
any, nationals were captains, medical doctors, or motormen with professional
or high-level qualifications. In regard to indigenous employees, Ghana’s
situation contrasts sharply with that of its neighbors: in the Ivory Coast,
nationals are 60 to 65 percent on oil rigs; in Nigeria, MNOCs can employ only
workers qualified for work in companies’ home countries; and Benin
insists that only its nationals should work as sample catchers for oil
exploration (information from an informant, Accra, June 5-6, 2012).

Human-resource profiles of Tullow and Kosmos–the major MNOCs
operating Jubilee–reveal that, even though Ghanaians are being employed,
most of them are not in top-level positions or core professional, management,
financial, and technical areas. Tullow may be commended for having a 100
percent indigenous legal staff (Tullow 2011), but it would contribute more to
local employment if Ghanaians assumed headships of the legal and other
crucial departments. So far, Ghanaians are in what are considered soft,
ancillary, or noncritical functions: community and public relations and
corporate social responsibility. These are important areas, but such
employees do not make the decisions that drive the petroleum sector’s
core technical and financial operations, such as EDP.

Additional factors hamper and will continue to diminish
Ghana’s local content until they are resolved. As some informants
reiterated, Ghana placed the cart before the horse–or “bought the horse
without shelter to protect it”–by not getting the policy and
legislation sequencing and implementation right before producing oil. In the
rush to earn foreign exchange and thereby cash in quickly, Ghana did not
create the infrastructure to allow it to tap its petroleum resources
effectively. Such infrastructure comprises relevant equipment, personnel, and
funds for optimum local content and regulation by public authorities. Three
situations illustrate this. First, according to the Ghana Statistical Service
(2012, particularly table 34, “Employed Persons by Age and
Industry,” p. 154), 3557 residents were involved in petroleum
activities. Second, at the end of 2013 (three full years into OG production),
the relevant EDP and environmental laws have not been passed. Third, after
using gas to power the FPSO Kwame Nkrumah, remaining gas from Jubilee is
wasted through flaring because the infrastructure to transport, process, and
store gas is not ready. Construction is delayed by financial wrangling among
China’s Export Bank, SINOPEC, and the Ghana Government.

Current and Potential Sources of Petroleum-Related Conflicts in
Ghana

Though the petroleum business is in its infancy, emerging trends
in Ghana necessitate drawing lessons from some aspects of the resource curse
in the petroleum-bearing Niger Delta (Kent, Faucon, and Scheck 2013). Besides
managing OG revenues properly, measures are needed to protect the physical
and social environments. It is necessary to ensure that undesired phenomena,
such as social, income, and other inequalities that cause bifurcated,
tension-rife, and corrupt societies, do not become the norm. Visiting with
colleagues from the Institute for Development Studies (IDS) of the University
of Cape Coast (UCC) to the oil-bearing districts in 2009 and fieldwork from
2011 to 2013 confirm some potential or actual socially disruptive conditions
that an informant labeled “latent conflict” linked to commercial OG
production. Some phenomena that fall under the purview of Auty’s (1993)
resource curse are being documented in print and popular media (Odio-Larbe
2011; Resource Watch Agenda 2011a, 2011b; van Rijn 2013).

A tense situation emanating from petroleum extraction in the six
abutting oil districts is the five-kilometer no-go, no-fishing, or
exclusionary zone around the FPSO Kwame Nkrumah. Similar limits have been
placed near other gas facilities inland, including the West African Gas
Pipeline and SINOPEC, a Chinese-funded gas infrastructure project
(observations by author during tour of petroleum installations,
Sekondi-Takoradi and Aboadze, Western Region, June-August 2012). Such zones
have led to a clash of interests, which need to be resolved tactfully to
avoid fatal conflicts. Fishermen are prevented from going near oil
installations because, for instance, the FPSO Kwame Nkrumah’s suction
power can be deadly. Admittedly, these expensive facilities need to be
protected from collision with fishing canoes, but tensions between fishermen
and oil companies have been exacerbated by the fact that light from offshore
oil equipment attracts fish to which artisanal fishermen are denied access.
Because oil equipment occupies large spaces and limits access to fish, local
fishermen are made to travel farther into the Atlantic Ocean in canoes using
paddles or low-powered engines (observations by author at Sekondi-Takoradi;
interviews with fisherman at Cape Coast beach, June 2012).

Petroleum and Potential Tensions Onshore

The twin challenges of land tenure and chieftaincy disputes could
upset the peace and stability required for successful oil extraction and
Ghana’s development (Agyemang-Duah 1997; Mensah 2011). During fieldwork
in 2009, the author and his colleagues were informed that speculators were
acquiring land without proper procedures and compensation. In one case, three
hundred acres were acquired for a fertilizer plant scheduled to use gas from
Jubilee. At Awona Town (Ahanta West District), there was a proposal to
relocate an entire fishing village to create space for a proposed casino for
oil workers and tourists. The absence of appropriate compensation, titling,
and demarcation of land could pose severe litigation problems for MNOCs,
investors, and local populations. Land disputes could exacerbate chieftaincy
conflicts in communities near Jubilee, which have more paramount chiefs than
most parts of Ghana (information from J. V. Mensah, Director of IDS, during
fieldwork in oil districts, October 2009; Mensah, Kendie, and Enu-Kwesi 2009;
Daily Graphic 2007a). Princess Town and Adjembra, communities with separate
antagonistic royal houses, could be ripe for land tenure and chieftaincy
conflicts. Any misstep by the government, MNOCs, and other investors could be
misconstrued as meddling in chiefly affairs–which in turn could lead to new
social disruptions or even fatalities. Such risks are likely to increase as
oil operations move onshore and begin to affect land and populations
directly.

An additional risk factor is the millions of dollars/cedis spent
on corporate social responsibility (CSR) that could spur disputes over land
and who occupies traditional stools, symbols of traditional authority. From
2007 to 2010, Jubilee Partners spent US $8 million on social programs (Smith
2010:5); another $500,000 went into repairing a small rotary, locally called
a roundabout, in Takoradi (Aklorbortu 2011; Marfo and Aklorbortu 2011). These
and similar cash inflows could inflame simmering tensions between opposing
royal houses or landowners as they compete for access to cash and other
benefits from CSR. A salient issue arising is whether the Western Region
House of Chiefs and Ghanaian law courts have the capacity to adjudicate a
large number of highly contentious cases on land, chieftaincy, and other
conflicts arising from OG. These disputes could destabilize the region, with
adverse consequences for the entire country.

Social Inequality: An Emerging Economic Apartheid in Ghana’s
Oil Region?

In relation to potential social conflicts, what this study calls
“rent and landed-property-value creep” could induce more of what an
informant called latent anger. This is happening in the Sekondi-Takoradi
area, but may be reaching as far as Cape Coast, fifty miles away. In November
2011, in the Beach Road neighborhood of Takoradi, the author observed a
single family home on sale for one million euros and luxury two- or
three-bedroom apartments renting for US $3000 to $4000 a month. In addition,
a medium-sized office and residential building was being leased by a foreign
shipping company at about US $400,000 a year (observations by author at
Sekondi-Takoradi, June 2012). Rent in Sekondi-Takoradi rose by 100 percent,
and “some property owners demanded rent in dollars,” to be paid
several years in advance (Resource Watch Agenda 2011a)

Rent and landed-property-value creep, defined as excessively
escalating cost of housing and land, result from the sudden infusion of oil
cash into Sekondi-Takoradi, areas that have become the OG hub in Ghana.
Landlords are demanding higher rent for residential property and converting
residences into offices to earn more. These developments have become
gentrification forces, displacing poor and low-income residents into less
desirable housing, which is becoming expensive. One informant described how
his workers complained that property owners were asking for more rent and
threatening to eject them if they could not afford to pay (information from
author’s tour of Sekondi-Takoradi, July 2012).

High prices in the oil districts are raising the cost of living,
in some cases exceeding the rate prevailing in Accra, known for being
expensive. On November 8, 2011, for example, this author spent a dollar
(almost two cedis at that time) on a can of cocoa drink at Takoradi that cost
US $0.75 (one and a half cedis) in Accra. High rent and prices beyond the
reach of most residents of Sekondi-Takoradi could lead to social tensions
caused by economic inequality.

Traces of economic apartheid are visible in the Western Region,
even before Ghana becomes a full-blown oil producer. During fieldwork in
Sekondi-Takoradi in 2011-12, this author recognized signs of economic
apartheid: widely diverging income levels reflected in the luxurious
residences on Beach Road and expensive hotels and eating places, such as
Akroma Mall in Takoradi, and the paucity of Ghanaian patronage. Prices in
these luxury hotels and eateries were beyond the incomes of most Ghanaians,
in particular the servers, cleaners, “garden boys” (groundkeepers),
drivers, and security guards employed by these establishments. (10)

What Can Academia Do to Manage Ghana’s Petroleum Resources
Better?

Former presidents J. A. Kufuor and J. Atta-Mills may be commended
for pledging to put Ghana’s petroleum to good use (Amoako 2007;
Atta-Mills 2010); however, more is required to translate their wishes into
practice. Both the NPP and NDC governments have created documents and
proposed OG bills that have not yet become core EDP and environmental laws.
Hence, the nation depends on outmoded laws, notwithstanding the passage of
the Local Content Act, PLCLPR LI 2204, in November 2013 and other statutes,
such as the PRMA and the PC Act for petroleum revenues and production,
respectively.

Even if Ghana passes the necessary LIs, the nation will lack two
major ingredients for successfully managing OG resources: a well-articulated
vision for overall development, coupled with what this study calls a smart
plan, a road map to guide the nation to utilize hydrocarbons as a
transformative asset. (11) This means not treating OG as a cash cow for
meager revenues from crude exports but effectively using such a resource as a
lever for development through value addition, such as processing into
expensive consumer and industrial products.

Since 1983-86, when Ghana increasingly fell under the influence of
IMF, World Bank and other donors, the country has been lulled into a false
sense that national vision, planning, and systematic development efforts are
nonessential. This ideology has been reinforced by the erroneous view that
with the end of the Soviet empire, planning has become obsolete. Thus, though
Act 815 mandates the uses of Ghana’s petroleum revenues to conform to a
national development plan, that is not happening (PIAC 2011). There is no
national plan, and the situation is unlikely to be remedied soon. The two
ruling parties–NDC and NPP–resort to short-term plans, such as IMF and
World Bank-sponsored poverty-reduction strategy papers and Vision-2020 types
that have proliferated in Africa (IMF Ghana 2012; IMF Zambia 2007; National
Development Planning Commission 2010; National Planning Commission 2009;
Oporanya 2012). Both parties use partisan manifestos and uncoordinated
projects to win elections or stay in power without tackling fundamental
weaknesses in the economy and society (Prempeh and Kroon 2012).

Instead of a carefully thought-through, fully researched, and
fact-supported agenda leading to what this study calls smart and diligent
planning, Ghana in the last four decades has cobbled together a patchwork of
development initiatives (Ministry of Energy 2010, 2011a, 2011b, n.d.;
Ministry of Environment, Science, and Technology 2011; Ministry of Trade and
Industry n.d.). Even if some of these bear the title “Development
Plan,” careful review reveals that these are not full-blown plans that
can help resolve Ghana’s or other African nations’ development
challenges. Instead, they are mostly isolated documents initiated and funded
by external donors without appropriate domestic coordination or input
(Osei-Amponsah, Anaman, and Addo 2006). On top of these problems, as the
Ministry of Energy’s Ghana Energy Development and Access Project
(n.d.:23) confirms, some are even written by donors. The Ghana Energy
Development and Access Project states that it “is a multi-donor funded
project involving the World Bank-IDA Global Environment Facility, African
Development Bank, [and] Swiss Agency for Development and Cooperation,”
and the projects end when donor funds finish.

To rectify the problem of “buying the horse without a
barn,” academics from universities in Ghana should contribute to
fashioning a comprehensive national development vision and blueprint in which
oil and other factors for development, such as education and human capital,
industrialization, information and communication technology, energy, and
agriculture mesh. For a national vision and plan to work, they must have
certain features. They need careful conception and well-articulated parts,
which are systematically linked to genuinely holistic, comprehensive, and
realistic targets. They should not be faddish, or, as Ghanaians say, a
nine-day wonder, but must be designed to endure over time while nimble enough
to reflect changed circumstances to ensure success.

With regard to OG, a viable vision should lead to a plan that is
practical and entails realistic, carefully articulated objectives, stating
precisely what Ghana wants to achieve with its petroleum, now and in the
future. Issues requiring competent management include what roles this
resource plays in industrialization, energy production and usage, employment
of nationals, local business participation, financing, and broader
development concerns, such as food insecurity, dependency on raw commodity
exports, and the low deployment of technology. Related documents and
institutions should be coordinated to work toward identified short-, medium-,
and long-term goals. Last, policies, resources, programs, and legislative
instruments should be aligned carefully with clear purposes.

Conditions critical to the successful roles of academics need to
be laid out. First is creativity, because Ghana’s vulnerabilities do not
permit mimicking what other countries have done. Being creative means
developing the capacity to study astutely both the uses and abuses of OG and
other resources by countries in and out of Africa and applying pertinent
lessons faithfully. Second, academics should root their roles and base policy
recommendations on lessons from both successful cases, notably Norway and
South Korea, and unsuccessful ones, notably the Democratic Republic of Congo,
Nigeria, Angola, and Equatorial Guinea. Ghana should not merely replicate
Norway’s petroleum savings fund: as Erna Solberg, Norway’s prime
minister, has indicated, even Norway needs to change its approach to oil
revenues because times have changed (Mohsin 2013). With respect to
Ghana’s petroleum funds, a cost-benefit analysis of investing in
Euroclear bonds earning low interest (PIAC 2011) versus using some of
Ghana’s petroleum funds to train more youths for OG and other jobs or a
massive infrastructural buildup should precede decisions to spend or save
petroleum incomes. Ghana should not simply imitate Norway because a critical
factor for its success–high interest on savings–no longer exists.

As much as attention ought to be paid to enabling Ghana to make
“long-term development and expenditure plans and address issues of
governance to successfully manage” revenues and expenditures relating to
OG (Institute of Economic Affairs 2009:3), the limitations inherent in such
emphasis need to be stressed. There has been an almost exclusive focus on
managing revenues and not on the fact that revenues have so far been anemic.
This lopsided approach must be rectified to allow Ghana to improve OG revenue
inflows while simultaneously monitoring how funds are spent. Excessively
generous terms for MNOCs in existing oil leases have kept the nation’s
earnings low. Hence, academics, in establishing their new their roles, need
to consider ways to help the country to boost earnings and improve revenue
usage.

Using Petroleum as a Transformative Resource

Academics need to give much weight to the socially and
economically transformative roles of petroleum through industrialization,
agricultural diversification, the powering industry, food production,
fishing, and animal husbandry to generate jobs, raise productivity and
incomes, and assure food security. The development and use of appropriate
technology and human capital through the creation of a pool of talent for OG
and other new sectors, such as real manufacturing, should assume priority if
Ghana is to end the prevailing economy of “buying and selling assorted
imported consumer goods,” which quickly depletes the nation’s
foreign reserves and cannot generate good paying jobs. Led by public
universities, Ghana should create a new industrialism using oil to transform
society into one that deploys effectively science, technology, engineering,
and mathematics (STEM).

There is the additional urgency to launch suitable financial,
legal, and environmental regimes to ensure optimal outcomes for the people of
Ghana. Because the financial and environmental regimes described in this and
other studies (Institute of Economic Affairs 2010; Panford 2014) are weak,
academic researchers in Ghana should lead in finding solutions before these
deficiencies contribute to wasting the new petroleum resources and destroying
the oil-abutting areas. It is necessary for academics to start consultations
with the country’s other untapped valuable resource: Ghanaians in the
diaspora who are well versed in the OG industry. If tapped effectively, they
could assist the GNPC, TOR, MOEP, PC, GRA, Ministry of Finance and Economic
Planning, Bank of Ghana, and other public agencies in managing the
country’s petroleum resources.

Roles of Specific Academic Institutions

Deficiencies in Ghana’s petroleum sector make the roles of
academia more compelling. The start of this new sector is the most opportune
moment for all concerned to gear up for active engagement to identify
problems and be equally concerned with producing solutions. It is
particularly essential that those in academia who advocate social development
put their thinking caps on to facilitate creating appropriate visions and
plans suitable to Ghana’s conditions. (12) This is necessary to ensure
maximum benefits for Ghanaians, who, the 1992 Constitution and the MPA
stipulate, are the bona fide owners of all the country’s natural
resources. A specific important anomaly could be a test case for
academics’ new roles. The National Development Planning Commission
(NDPC), currently under the Office of the President, is not an autonomous
engine for development, despite the Constitutional Review Committee’s
recommendation to make it independent (Amenuveve 2012; Osei-Amponsah, Anaman,
and Addo 2006). Academics should rally stakeholders–including workers’
associations, think tanks, and the AGI and other civil society groups–to
advocate for the NDPC to be made autonomous and reconstituted with members
who in all respects qualify as development experts. Achieving this could mark
the beginning of serious efforts by Ghana to effect real and sustained
development.

Concerning the participation of Ghanaian academics and other
elites (for this study, mostly professionals, managers, senior clergy,
business leaders, trade unionists, and senior university administrators and
faculty), as a Ghanaian adage goes, the news is not palatable. Comments from
the audience after presentations by the author (13) suggest that elite
involvement in, and concern for, OG matters is low. The country apparently
lacks a critical mass of citizens needed for broad-based watchdog activity
and effective advocacy for OG issues, and some elites fail to read publicly
accessible OG documents to become well informed. Examples of such documents
are MPA (2000), PIAC (2011), and the PRMA posted on the Internet. Similar
concerns affect African universities and their lack of engagement with
development processes generally (Mamdani 2011).

Existing trends do not bode well for countering the resource curse
because the assumption behind most of Ghana’s current measures,
including the creation of the PIAC and its annual reports on oil revenues, is
that citizenship engagement will lead to transparency, which will in turn
reduce corruption and mismanagement. This assumption will not hold if
academics and other elites do not read pertinent documents and do not set the
agenda for substantive media coverage and public analysis of OG matters, as
has been the case so far in Ghana. The author recorded for this study
interactions with individuals and groups of Ghanaians at home and abroad,
including some with postgraduate degrees, who did not read important OG
documents, such as oil leases and PIAC reports. Some took fascinating
positions, varying between extreme optimism and extreme pessimism. The overt
pessimists, without proof and not being fully aware of what is happening,
insisted that the nation’s OG had already been sold to foreign interests
and the proceeds chopped–pocketed–by Ghanaian officials. Academics should
produce rigorous, fact-based research, conclusions, and policy
recommendations. Their work will have the desired effects if they first get
involved with relevant processes and institutions and become familiar with
current developments in OG in Ghana and then make their findings public and
engage policymakers and politicians.

In relation to establishing a solid industrial base to add value
to Ghana’s petroleum as the Ministry of Energy (2010, 2011a, 2011b)
claims it desires, academics may assume responsibility for providing research
evidence that can be adapted to suit Ghana’s peculiar conditions in a
manner similar to what Hong Kong, Japan, Malaysia, Singapore, South Korea,
and Taiwan have accomplished. This includes steadily applying well-fashioned
strategies to create durable manufacturing through appropriate investments,
talent development, and the use of STEM. (14) Academics should focus
especially on how previously poor countries combined high technology with
appropriate education and workforce development to overcome underdevelopment.
The NDPC, for instance, confirms that fatalism hinders Ghana’s progress
(Prempeh and Kroon 2021). This is a challenge that academics have to assist
Ghana to overcome as a prelude to the widespread application of STEM and
methodological approaches to development.

To help Ghana adopt industrialism as a mode of life, academics
should fashion practical means to transform the country’s raw OG into
products and byproducts, ranging from kerosene (the poor person’s fuel),
gasoline, bitumen/asphalt, aviation fuel, lubricants, fertilizer, cosmetics,
plastics, and car tires to additional chemicals with other byproducts–jelly,
wax, candles, paint, and additives to aerosols. Adjaye (2010) lists more
products that can be made to add value to petroleum resources, create jobs,
engender wider opportunities for further development, and help Ghana avoid
exporting crude for meager foreign exchange, providing few benefits that
last.

This last section reiterates practical measures that higher
education can initiate immediately and additional steps to assume leadership
to turn the country’s raw petroleum into blessings and steer the country
away from the hornet’s nest it is heading for. Vice chancellors of
universities should lead higher-learning institutions to urge, inspire, and
create avenues for their faculty and staff to become engaged in all phases of
Ghana’s OG industry. Both public and private universities should
spearhead collaborating with polytechnics and technical training institutes
to turn out more industry-ready skilled and semiskilled workers. To ensure
the steady supply of labor-market-ready trainees, the education curricula
should be geared at achieving competency and skills that can be certified to
guarantee jobs, especially in OG and new related industries. This will
satisfy MNOCs’ requirement that because of insurance and other risks
they can employ only those whose talents are certifiable, that is, with
proven qualifications and skills. Institutional collaboration, as between
universities and polytechnics, can start with institutions near Jubilee and
other oil fields; Takoradi and Cape Coast Polytechnics and Kikam and Cape
Coast Training Institutes are good examples. These technical institutions,
assisted especially by the six public universities, can be used to upgrade
instructors’ skills and curricula to boost the skills of tradesmen and
train new students in occupations pertinent in OG (Panford 2014).

Academic units that should be involved include IDS; the newly
proposed Institute for Oil and Gas Studies at UCC; University of Ghana’s
Institute for Statistical, Social, and Economic Research (ISSER); the Center
for International Law and Diplomacy (LECIAD); the Petrochemical and
Engineering Departments at KNUST; schools of law and business; and units of
engineering, oceanography/fisheries, geology, seismology, environmental
science, and other disciplines at public and private universities, including
All Nations at Koforidua, Eastern Region. Concretely, KNUST’s Petroleum
Engineering Department should use the GNPC’s oil rig, the North Sea
Pioneer, which sits idle at the Sekondi Naval Base, to equip trainees with
practical skills from a real-life oil rig. This would contribute to solving
one of the banes of training and education in Ghana and the employment of few
Ghanaians in OG: a shortage of skilled indigenous workers.

UCC and University of Ghana as their contribution may specialize
in the legal and business aspects of OG, while KNUST and All Nations focus on
the natural, physical, and engineering dimensions. KNUST and UCC could lead
the nation’s polytechnics and technical institutes to design new
curricula and train trainers to develop a workforce that is labor market
ready to meet MNOCs’ demands. The new law school at UCC, with its
intended emphasis on natural resources, environmental law, and community
engagement, (15) should be aided to position itself to assist the EPA to
bolster its capacity to protect the physical environment near oil
installations and communities. Faculty roles at the law school could be
enhanced by its proximity to Ghana’s offshore oil fields at Saltpond and
near Cape Three Points, Western Region. Higher educational institutions may
assume responsibility for crafting strategies to avoid calamities on- and
offshore by facilitating mutually beneficial dialogue among local fishermen,
communities, MNOCs, government officials, and other interested and affected
parties. With respect to no-go or exclusionary zones and corporate social
responsibility, these academic institutions can contribute to reducing
conflicts emanating from the natural resource curse by forming advocacy,
research, and consultancy groups to protect local communities’ interests
by anticipating conflicts and devising strategies to end them before they
become disastrous. The Fisheries Department at UCC, for example, could
investigate the application of technology that leads to less obstructive
barriers that protect both fishermen and oil installations in the no-go zones
(information from discussions at IDS, UCC, June 2012). Two more areas that
deserve special attention are land tenure and chieftaincy, subjects that if
neglected could spark major and even deadly conflicts. Research may be
conducted with the aim of preventing future disputes that could spark
intractable social and even political problems as OG activities are
intensified on shore.

It is necessary to stress the urgency for systematic reviews and
robust public discussion of critical areas and the roles of OG regulatory
bodies to determine the extent to which they affect the interests of
Ghanaians and guarantee optimal outcomes. Significant research questions to
guide Ghanaian institutes, such as IDS, LECIAD, ISSER, and others, may be
whether oil leases provide adequate revenues, to what extent the PIAC and IAC
ensure revenues are invested judiciously, and whether the GRA, PC, and EPA
have the resources–personnel, technology, equipment, and budget–needed for
their statutory functions. Concerns raised in this study about severe revenue
shortfalls prompt a key query: to what extent can the GRA ascertain the
business expenses of MNOCs and their tax liabilities? Responses to these
questions are crucial in determining whether Ghana’s oil governance is
strong enough to banish the resource curse.

Concluding Note

This study shows that Ghana has not earned projected revenues from
existing oil leases; meanwhile, the country shoulders a heavy financial
burden in the form of lost revenues from corporate taxes and unwitting
subsidization of oil companies, coupled with potential damage to communities
and the physical environment abutting oil fields. Law, business, and other
educational institutions must therefore be involved in remedying these
conditions. The country should motivate education and training institutions
through appropriate incentives, including funding to deliver services that
bring in more revenues, add value to natural gas and crude petroleum, and
protect oil communities and the environment. To attain such goals, rewards in
the form of pay and career structures at relevant institutions to promote
hard work, diligence, and creativity should be adopted, and rewarding almost
exclusively long-term service should cease. Using long-term service as the
main or sole basis for promotions could stifle innovation and prevent
Ghanaian academics from seizing the unique opportunities that new OG
resources present for them to contribute more to the nation’s
development.

As a final practical matter, academics should be ingenious in
helping Ghana leverage certain advantages into better oil leases. These
advantages could be converted, as it were, into bargaining chips to secure
better leases. Among these are the sweet and light nature of the
nation’s oil–dubbed the Mercedes Benz of crude because of its desirable
qualities–and praises heaped on Ghana for being a stable and successful
democracy (Diamond and Mosbacher 2013; World Bank 2010). In addition, since
separate institutions and groups need to collaborate to ensure success, it is
essential to coordinate the required different activities using a plan that
is comprehensive and guided by a well-thought-out vision. Without a vision
and a plan that works, Ghana’s situation, with respect to petroleum in
particular and development in general, will be analogous to a rudderless ship
lost at sea.

ACKNOWLEDGMENT

The author acknowledges the financial support of the Fulbright
Fellowship Program during more than a year’s fieldwork for this article
and expresses deep appreciation to the anonymous reviewers for their helpful
comments.

REFERENCES CITED

Ablordeppey, Samuel D., and Jessica Acheampong. 2011. IMF Urges
Government to rake in More funds. Daily Graphic, october 26.

Adjaye, Robert. 2010. Opportunities in Ghana’s Energy Oil and
Gas Industry for Local Participation. Accra Private Enterprise Foundation.

Adu-Gyamera, Emmanuel. 2012. 1,500 Jobs Created in oil and Gas
Sector. Daily Graphic, June 6.

AFREN, CRES, Undr and Unitar. 2008a. Skills Shortages in the
Global Oil and Gas Industry: How to Close the Gap. Part 1. AFREN, CRES, UNDP,
and UNITAR.

–, –, –, and –. 2008b. Skills Shortages in the Global Oil and
Gas Industry: How to Close the Gap. Part 2. AFREN, CRES, UNDP, and UNITAR.

Agyeman-Duah, Baffour. 1997. Managing Chieftaincy and Land
Conflicts: Traditional or Modern Mechanism Governance. Institute of Economic
Affairs 4(2), October.

Aklorbortu, Moses D. 2011. Jubilee Partners to Rehabilitate
Shippers Roundabout. Daily Graphic, November 15.

Akpomuvie, Orihoghene B. 2011. Tragedy of Commons: Analysis of Oil
Spillage, Gas Flaring, and Sustainable Development of the Niger Delta of
Nigeria. Journal of Sustainable Development 4(2):200-210.

Ali-Nakyea, Abdallah. 2011. Petroleum Taxation, Depletion, and
Welfare in Developing Countries. Economist, November 26.

Amenuveve, Vincent. 2012. Government to Set Up Committee. Daily
Graphic, July 9.

Amoako, Samuel. 2007. Ghana Strikes oil at Last. Ghanaian Times,
19 June.

Asafu-Adjye, Nana B. 2012. Paper presented at the 63rd annual New
Year School and Conference, University of Ghana, Legon, January 9.

Atta-Mills, John. 2010. State of Nation Address to Parliament.
Accra: National Parliament.

Auty, Richard. M. 1993. Sustaining Development in Mineral
Economies: The Resource Curse Thesis. London and New York: Routledge.

Ayensu, Edward. 1997. Ashanti Gold. Accra and London: Ashanti
Goldfields Corporation.

Bagaji, Ali S. Y., Joseph O. Achegbulu, Abu Maji, and Natala
Yakubu. 2011. Explaining the Violent Conflicts in Nigeria’s Niger Delta:
Is the Rentier State Theory and the Resource-Curse Thesis Relevant? Canadian
Social Science 7(4):34-43.

Biryabarema, Elias. 2012. Tullow Agrees Deals for Uganda Oil
Production. The Scotsman. http://www .scotsman.com.

Boohene, Rosemond, and James A. Peprah. 2011. Women’s
Livelihood and Oil and Gas Discovery in Ghana: An Exploratory Study of Cape
Three Points and Surrounding Communities. Journal of Sustainable Development
4(3):185-93.

Bruce, Michael S. 2011. US $4bn Needed to Develop New Oil
Discoveries. Business and Financial Times, November 28.

Business and Financial Times. 2013. Jubilee Close to Peak
Production. January 14. http://www.ghana
web.com/GhanaHomePage?n=NewsArchive/artikel.php?ID=262071.

CSIR SINTEF-STEPRI. 2010. Annual Report. Accra.

Daily Business News. 2013. Ghana’s Oil Production Hits
115,000 Barrels. October 5. http://radioxyzonline .com.

Daily Graphic. 2007a. Chieftaincy Problems and Security. November
7.

–. 2007b. Ghana Finds oil. June 20.

–. 2007c. More oil. Editorial. August 24.

–. 2013. Ghana Earns $933m from Petroleum. august 2.

Diamond, Larry, and Jack Mosbacher. 2013. Petroleum to the People:
Africa’s Coming Resource Curse– and How to Avoid It. Foreign Affairs,
September/October, 86-98.

Economist Intelligence Unit. 2012. Country Report: Ghana.

European Commission. 2011. Transfer Pricing and Developing
Countries: Appendix C: Country Study (Ghana) Final Report. Pricewaterhouse
Cooper, June. http://ec.europa.eu/taxation_customs
/resources/documents/common/publications/studies/transfer_pricing_dev_countries.pdf. Gelb, Alan H. 1988. Oil Windfalls: Blessing or Curse? New York:
Oxford University Press.

Ghana Business and Finance. 2011. Jubilee Field Produces 22
Million Barrels of Oil in November. December.

Ghana Government. 2004. Petroleum Agreement among Ghana National
Petroleum Corporation, Kosmos Energy Ghana HC, and E. O. Group in Respect of
West Cape Three Point Block Offshore Ghana. July 22.

–. 2006. Petroleum Agreement among Ghana National Petroleum
Corporation, Tullow Ghana Limited, Sabre Oil and Gas Limited, and Kosmos
Energy Ghana HC in Respect of the Deepwater Tano Contract Area. March.

Ghana News Agency. 2012. MOTI to Revive Assin Bamboo Factory. May
5. http://www.ghheadlines .com/news/20120505/page/11.

Ghana Oil and Gas Online. 2012. Tullow Refinances.
http://ghanaoilonline.org/2012/11/tullow -refinances.

Ghana Statistical Service. 2005. Ghana 2000 Population and Housing
Census. Accra.

–. 2012. Ghana 2010 Population and Housing Census. Accra.

GNPC. 2008. The Upstream Petroleum Industry in Ghana: Oil and Gas
Exploration, Development, and Production. GNPC Tema, January 22.

–. 2011. The Upstream Petroleum Industry Involves Exploration,
Development, and Production of Petroleum (Oil and Gas) Resources. GNPC Tema,
November 22.

Griffith, Bill. 2013. Hyundai Offers Free Fuel as Incentive to Try
EVs. Boston Globe, December 15.

Hilson, Gavin. 2004. Structural Adjustment in Ghana: Assessing the
Impacts of Mining-Sector Reform. Africa Today 5(2):53-77.

Hobenu, Jacob. 2011. The Second Opinion: 90% Local Content in Oil
and Gas by 2020: Strategic Review. Ghana Oil Watch.

IMF Ghana. 2012. Poverty Reduction Strategy Paper. IMF Country
Report 12/203. Washington, D.C.: International Monetary Fund.

IMF Zambia. 2007. Poverty Reduction Strategy Paper. IMF Country
Report 07/276. Washington, D.C.: International Monetary Fund.

Institute for Development Studies. 2010. Oil and Gas Exploration
and Production: A Socio-Economic Baseline Survey of Six Coastal Fringe
Districts in the Western Region of Ghana. Draft Report. Cape Coast.

Institute of Economic Affairs. 2009. Harnessing Ghana’s Oil
and Gas Revenues for Sustainable Development: Key Proposals for
Consideration. Legislative Alert, November 17.

–. 2010. Ghana’s Petroleum Industry: The Prospects and
Potential Impediments towards Good

Governance Standards. Special issue. Ghana Policy Journal 4.

Kent, Sarah, Benoit Faucon, and Justin Scheck. 2013. Shell Seeks
to Exit Violent Part of Nigeria. Wall Street Journal, October 31.

Kobbie, Ato. 2013. Jubilee field Powers Kosmos. Business Analyst,
April 3. http://www.ghanabusiness analyst.com/indexoil-gas/item278-jubil.

Krugman, Paul R. 1987. The narrow Band, the Dutch Disease, and the
Competitive Consequences of Mrs. Thatcher. Journal of Development Economics
27:41-55.

Maier, Karl. 1996. Angola Promises and Lies. Rivonica, South
Africa: William Waterman Publishers.

Mamdani, Mahmood. 2011. The Importance of Research in a
University. The Mekerere Institute of Social Research, April 21.
http://pambazuka.org/category/features/72782#.UeL4MZ8-D.

Marfo, Kwame A. 2011. Oil Discovery Brings Hope to People of
Western Region. Daily Graphic, September 9.

–, and Moses D. Aklorbortu. 2011. Jubilee Partners Launch Project
for Six Districts. Daily Graphic, July 22.

McCaskie, Tom C. 2008. The United States, Ghana, and Oil: Global
and Local Perspectives. African Affairs 107(428):313-32.

Mensah, John V., Stephen B. Kendie, and Francis Enu-Kwesi. 2009.
Re-Thinking Development Studies in Africa. Institute for Development Studies,
Cape Coast: University of Cape Coast.

Mensah, Mary. 2011. Ministry to Conduct Research into Succession
Lines in 30 Traditional Areas. Daily Graphic, November 24.

Ministry of Education. 2010. Ghana Skills and Technology
Development Project. Project information document. Accra: World Bank Skills
Project.

Ministry of Energy. 2010. Energy Sector Strategic Development
Plan. Accra.

–. 2011a. Implementation Framework for the Local Content and
Participation Policy for Oil and Gas Sector. Final Report. Accra.

–. 2011b. Local Content and Local Participation in Petroleum
Activities: Policy Framework. Accra.

–. N.d. Ensuring Secure, Reliable, and Quality Energy Services in
a Transparent, Accountable Manner. Accra.

Ministry of Environment, Science, and Technology. 2011. A
Capacity-Building, Needs Assessment, and Development Plan for Environment
Regulation and Governance of the Oil and Gas Industry in Ghana. Accra: Acorn
International.

Ministry of Trade and Industry. N.d. Ghana Industrial Policy.
Accra.

Mkandawire, Tandika. 1988. The Road to Crisis, Adjustment, and
De-Industrialization: The African Case. Africa Development 17(1):5-31.

Mohsin, Saleha. 2013. Norway Prime Minister Says Time Has Come to
Cut Oil Reliance. Bloomberg News, November 18. http://www.bloomberg.com/news.

National Development Planning Commission, Government of Ghana.
2010. Policy Framework. Vol. 1. Medium-Term National Development Policy
Framework: Ghana Shared Growth and Development Agenda, 2010-2013. Abuja.

National Planning Commission. 2009. Nigeria Vision 2020: Economic
Transformation Blueprint. Abuja.

Nyamiah. Tony. 1999. Report on Graduate Unemployment in Ghana
Ministry of Employment. Ministry of Employment and Social Welfare, Accra.
December.

Obi, Cyril. 2009. Nigeria’s Niger Delta: Understanding the
Complex Drivers of Violent Oil-Related Conflict. Africa Development
34(2):103-28.

–, and Rustad Siri Aas, ed. 2011. Oil and Insurgency in the Niger
Delta: Managing the Complex Politics of Petrol Violence. Uppsala: Nordic
Africa Institute.

Ocloo, Della R 2011. TOR Shuts Down Distillation Unit for
inability to Procure Crude. Daily Graphic, July 28.

Odio-Larbi, Stephen. 2011. Top MP defends Parliament’s Role
in Controversial oil deals, Laws. Offshore Ghana, November.

Ojambo, Fred, and Nidaa Bakhsh. 2013. Uganda Seeks investor to
Build $2.5 Billion oil Refinery. Bloomberg news, october 8.
http://www.bloomberg.com/news/print/2013-10-08.

Okpanachi, Eyene, and Nathan Andrews. 2012. Preventing the oil
“Resource Curse” in Ghana: Lessons from Nigeria. World Futures: The
Journal of Global Education 68(6):430-50.

Oporanya, Wycliffe A. 2012. The Kenya Vision 2030. Paper presented
at the London Investment Summit, London, July 31.

Ordonez, Isabel. 2011. Chevron Bears Down in Gulf. Wall Street
Journal, June 3.

Osei-Amponsah, Charity, Kwabena Anaman, and Salifu Addo. 2006.
Bridging the Gap between Policymakers and Research and Advocacy
organizations: The Challenges Facing RAos. Governance Newsletter, November.

Panford, Kwamina. 2001. IMF-World Bank and Labor’s Burdens in
Africa: Ghana’s Experience. Westport, Conn.: Praeger.

–. 2010. The Crucial Roles of Ghana’s Model Petroleum
Agreement: The Public Policy Implications and Requirements. Ghana Policy
Journal, December 4, 81-95.

–. 2012. Ghana, Labour Law, and Industrial Relations. In
International Encyclopedia of Laws. Alphenaan den Rijn: Wolters Kluwer Law
and Business.

–. 2014. An Exploratory Survey of Petroleum Skills and Training
in Ghana. Africa Today60(3):57-80.

Prempeh, Henry K., and Cindy Kroon. 2012. The Political Economy
Analysis of the oil and Gas Sector in Ghana: The Implications for STAR-Ghana.
STAR-Ghana.

Public Interest and Accountability Committee (PIAC). 2011. Report
on Petroleum Revenue Management for 2011. Annual Report.

Resource Watch Agenda. 2011a. Ghana’s New “oil
Cities.” 14th ed.

–. 2011b. Oil Rush Rendering Takoradi Residents Hopeless. 14th
ed.

Ross, Michael. 1999. The Political Economy of the Resource Curse.
World Politics 51:297-322.

Sandbu, Martin. 2009. The Iraqi Who Saved Norway from oil.
Financial Times, August 29.

Smith, Jeff. 2010. New oil–and a Huge Challenge–for Ghana.
National Geographic, December 15.
http://news.nationalgeographic.com/news/energy/2010/12/1012115-oil-ghana
-environment-jubilee.

Time. 2012. The Truth About oil. April 9.

Tullow. 2011. Ghana Jubilee Field Phase 1 Development Draft
Environmental Impact Statement. Accra: Tullow Ghana.

–. 2012. Tullow Expects Approval for TEN Field in Third Quarter.
July 5.

van Rijn, Barbara. 2013. “The Black Coast (oil in
Ghana).” January 21. YouTube video, 17:35. https://www
.youtube.com/watch?v=-HozeoeUrX8.

Ventures Africa. 2013. Ghana Spends $1m Daily on Crude Imports?
http://www.ventures-africa.com /2013/07.

Wall Street Journal. 2009. Ghana Signs Development Deal With
International oil Firms. July 26.

–. 2012. Rallies, Retreats and Round Figures. January 3.

–. 2013. US Corporations Pay 35%. October 27.

World Bank. 2009a. Ghana-IFC Investment in Kosmos Energy and
Tullow Oil. Washington, D.C.: World Bank.

–. 2009b. Ghana Skills and Technology Development Project.
washington, D.C.: world Bank.

–. 2010. Project Appraisal Document on a Proposed Credit in the
Amount of SDR 24.2 Million to the Ghana Government for Oil and Gas
Capacity-Building Project. washington, D.C.: world Bank.

NOTES

(1.) Typical audience questions for the author during the Ghana
Catholic Bishops’ Conference, Takoradi, November 8, 2011; Ghana
TUC’s national Stakeholders Conference on Petroleum, Accra, November
22-23, 2011; TUC’s executive board meeting, Tema, December 15, 2011; the
School of Business’s review of Ghana’s MPA, UCC, Cape Coast, March
20, 2012; and sessions hosted for more than 240 University of Ghana executive
masters in business students, faculty, and senior administrators at
Northeastern University, Boston, 2010-13.

(2.) Institute for Development Studies 2010.

(3.) See Panford 2010 for a review and details of Ghana’s MPA
of 2000.

(4.) Other phases are midstream and downstream. Midstream involves
provisioning EDP typically transporting–in Jubilee’s case–by sea:
water, salt, mud, and other inputs and personnel to and from the FPSO Kwame
Nkrumah. Downstream activities are transport, refining, marketing, and sale
of OG products–mostly gasoline and kerosene, engine oil, brake fluid, and
other lubricants. The latter may entail elaborate manufacture of more
products and byproducts, like plastics, chemical fertilizer, paint, and
pharmaceuticals.

(5.) Regime change and political inertia explain the absence of
up-to-date legislation. The New Patriotic Party’s (NPP) loss of
elections in 2008 prevented it from passing into law its Fundamental
Petroleum Policy for Ghana (final draft, June 2008) and the Ghana Petroleum
Regulatory Authority Bill of October 2008. In power since 2009, because of
inertia or lack of priorities, the NDC has not passed its Petroleum Licensing
Regulations, Petroleum Exploration, and Production Regulations into law.
According to a MOEP official, Parliament was expected to pass new LIs in the
first quarter of 2014 (information from Accra, October 2013).

(6.) For an elaboration on these risks, see Institute of Economic
Affairs 2010.

(7.) On the practical application of the resource curse thesis to
Ghana, see Panford 2014; for Nigeria, see Bagaji et al. 2011 and Obi 2009.

(8.) Ghana spent US $1 million daily importing crude and US $1.3
billion on foreign-refined oil products from January to July 2013 (Ventures
Africa 2013).

(9.) According to the business barometer issued by the Association
of Ghana Industries for the second quarter of 2013, a group of industries
indicated poor or high cost of power supply, limited access to credit,
depreciation of local currency, and high cost of imported raw materials as
major hurdles to business. Besides, current and past policy failures have led
to Ghana’s small industries’ranking as some of the least efficient
in the world (Ministry of Education 2010).

(10.) Similarly, local involvement in OG production has so far
meant nationals working at low-end jobs, like deckhands or roustabouts on
rigs and supply vessels (Panford 2014).

(11.) For how a clear vision and appropriate planning made a huge
difference in the fortunes of Norway, see Sandbu 2009.

(12.) The absence of a coherent vision and comprehensive
long-range planning contrasts with, for instance, how South Korea’s rise
as an economic power can be attributed to planning and diligent
implementation under visionary and capable leadership, which transformed it
from a poor country in 1962, with thatched roofs, into the world’s
leading manufacturer of high-tech products, including fuel-cell-powered
vehicles (Griffith 2013).

(13.) See note 1.

(14.) A caveat is that national vision and planning should not be
misconstrued with the defunct rigid and unrealistic (“cookie
cutter”) socialist or communist planning associated with the Soviet
empire. Instead, preference should be given to the types that launched South
Korea’s and other Asian countries’ meteoric rise as economic
powerhouses According to Yung Duk Kim, former chief executive of Hyundai USA,
South Korea’s success can be attributed to the state’s assumption
of important roles in developing human capital; he stressed that South Korea
owes its success to “smart planning and not letting events occur
randomly” (interview with author, New York City, December 27, 2011).

(15.) See the UCC website: www.ucc.edu.gh/academics/news/law.