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October 22, 2008 | News

Ghana’s Oil Find-Matters Arising


The purpose and intent of this article is not to criticize any person or group, but rather offer a critique of the Ghanaian societal system as an organism and to recommend some suggestions as to how best we can face such challenges in global economy. It is in the view of the author that such endeavor would ultimately lead to a progressive and better policy decisions by the Ghanaian private and public office holders. Spicy and flavored grammar has been avoided to aid faster digestion and comprehension!
The recent oil find being reported in Ghana in the news media has been described as a blessings o Ghanaians. The president, His Excellency John Agyekum Kuffour, did not hesitate to laud this as a blessing to the country and an indication of the favor God has shown to Ghana during his tenure as the president of the land. Many of us were happy as the numerous reports poured in on the quality and quantum of the oil find.

Okay, the dancing and praise singing is over, lets come to the specifics. Time and time again, it is not that the Ghanaian leadership does not know what to do, but how to do it. For me, the obvious negotiation disaster elaborated below reflects a larger societal problem, which is that key lessons have not been learnt in the area of commerce since we began to trade directly with our foreign friends. If we seriously want to compete in the globalised economy, our business sense should be as sharp as ever. So far we have displayed pretty lame stance when it comes to the issue of negotiations. Several examples abound. Before I go any further, let me dive into the specifics of Ghana's stake in the so-called Oil find. The Ghanaian Government being represented by the Ghana national Petroleum Council (GNPC) owns 10% of the 1,761 square kilometer (435,200 acres) West Cape three Points Block.1 The Key shareholders include privately held Dallas based Kosmos Energy-30.875%,. Anadarko WCTP Company, an affiliate of Anadarko Petroleum Corporation (NYSE: APC), has a 30.875% interest; Tullow Ghana Limited, an affiliate of Tullow Oil plc (LSE: TLW), has a 22.896% interest; the E.O. Group Limited has a 3.5% interest; and Sabre Oil and Gas Limited has a 1.854% interest in the block.

Now this is very interesting indeed! Was this the best deal that the Ghanaian people deserve-I don't think so!!! For how can one be so upbeat when the stake for 22 million Ghanaians is only a paltry 10%. Is it not funny that we are even contracting loan to buy fighter jets just to protect our so called oil interest! At least that is what I hear from my Uncle, the defense Minister. I will label this deal as fraudulent and highly unethical. It is pathetic that even religious leaders see nothing wrong and continue to whip people's hope about this oil find whiles the ordinary Ghanaian has no chance of benefiting in any way. The truth must be told, this 10% stake cannot even subsidize petroleum price for the ordinary Ghanaian and I doubt even if the government is going to use it for such a purpose. Again, even if they use the 10% to fund such a subsidy program, it means that we effectively did not profit from the so called oil find. I challenge Parliament to look into how this particular agreement was brokered. For me, this goes to show how unprepared and unserious we are when it comes to international trade and It is not about who knows macro or micro economics-go ask the Chinese, the Koreans, neither is it about who is best able to speak the queens language. Please, be humble enough to learn. Being a Minister of State or a Government Official/spokesperson does not mean one knows all.

I understand the tactics of these multinational corporations is to primarily bribe officials in developing countries. With that said, I am not in any way suggesting that the key negotiators involved in the oil deal were bribed-no evidence to suggest so, but then, it is striking how we managed to settle for such a low figure.

We should know when and what issues transcends partisan politics and really address them, for whether we like it or not, our future lies in our own hands and our children and posterity would judge us as what we really stood for. The above example is only one out of many that typifies our way of conducting business. The stereotype of dealing with a foreigner is still deeply embedded in our psyche such that we refuse to put on our thinking caps when we meet our foreign friends (be them yellow, white or even black). I know that the folks in the private sector do a far decent job when it comes to these issues, but even then the improvement is marginal.

When I talk to my colleague(mostly white) who sees Ghana as the hope of Africa and how they are closely monitoring and wishing Africa rise up, I tend to cringe within me, for how can I even tell stories like this. I would love and want Ghana to be the beacon of Africa, but if we continue in this same attitude there is no way we can get there. It is not about praying seven days a week, it is about doing the right thing and praying to God to help you succeed.

I have criticized, now it's time to offer solutions. I don't pretend to have all the answers, but it is one step further. Since the Government of Ghana is the biggest negotiator for all trade coming into the country, Experts in negotiation must be trained only for negotiations as done by Koreans and the Chinese. Their governments sponsored them to train in these western countries, specifically US and Europe. The results were that, they became equally good if not better like their competitors. You might argue that these are not democratic states or whatever, but don't forget, that when it became necessary, The UK Government recently nationalized a key bank-which is socialist. Again, even the debate about Universal health insurance is key in the upcoming US elections and this is in direct contrast to the free market philosophy which the United States has been championing all over the world. I am a believer in free market enterprise, but the bottom line is that you do whatever is necessary for the good of your people.

Secondly, the government should encourage smart people not necessarily educated. Its of little use when you surround yourself with a bunch of academicians. What ultimately results is a never ending debate. Recruitment and promotion of government officers should not be based solely on the merit the number of years on the job. Elements of creativity and innovation should be incorporated into rewarding packages as this is one way of priming people to be simply smart.

Motivational speakers like Pastor Mensah Otabil et al. should be employed to conduct self esteem and development sessions with Ministry and Governmental officials. One might think this is trivial, but it would certainly help the one person who is going to preside over the next big deal and who cannot stand up to accept his/her ignorance or naivety as of now for one reason or the other. If you think its costly to do so, think of the profit that the government and for that matter the people of Ghana stood to gain if the governments share of the West Cape three point deal was raised to even 15% or 22%.Think of it in cumulative terms in monies to be accrued over the years.

Ghanaians are naturally very defensive-I included. Even when we are caught dead wrong, people still defend. Its just incredible, we need to move away from such thinking and accept to see how the situation might look like if we had done things differently as our critics are suggesting, perhaps something useful might be evident in their suggestions. I hope no one paints this article with any political party color except the red, gold and green. I will end here but the topic will certainly be revisited. By the way, may I ask what specific program the Eurobond money is going to be used for?

1. Another Significant Oil Well Struck In Ghanaian Waters. http://www.ghana.gov.gh/ghana/another_significant_oil_well_struck_ghanaian_waters.jsp. Last Accessed March29, 2008.

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