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29 January 2009 | Feature Article

A Word of Caution to Ghana: Resources Are Not but They Become

The world's resources are seriously shrinking at an alarming rate. The recent trade war between Russia and Ukraine that made a number of East and Western European nations to endure one of the bitter cold temperatures in modern history points to this fact. While European nations have almost finished consuming their natural resources such as oil, gas, gold, diamond, tin ore, coltan, bauxite and other valuable minerals, the same cannot be said of Ghana and Africa.

Africa today is home to about 50% of the world's remaining natural resources. There are vast oil, gas, gold, diamond, bauxite, coltan, cassiterite and other metal deposits throughout the continent. This enviable position has made the continent a target for another scramble for her resources by resource strapped countries in Europe, North America and Asia. The shortages of the natural resources in the world seem to have sparked a secret war involving Europe, India, China and the US over who should have greater access to the wealth that Ghana and other African countries hold. These super powers are everywhere investing and buying oil and other natural resources to feed their industries.

Unfortunately, these vast deposits of minerals and other vital resources have not made Ghana and the countries on the continent any better rather poverty and underdevelopment is deep-rooted and rife in these countries. Whereas industries in Europe, America, China, India, Japan, Korea and Taiwan are booming with raw materials from Ghana and other African nations, the Ghana can barely boast of any viable manufacturing and industrial base beyond raw material production and agro processing.

Why is this situation so in Ghana and Africa?
There are many who argue that Africans seem not to know what to do with their vast mineral, oil and gas wealth. The arguments continue that these resources rich countries like Ghana seem not to value the strategic economic and political importance of what they have. Others have argued that Africans traditionally are not capitalist oriented and tend to be satisfied with what they get on the surface than beneath. As a result there is little or no enthusiasm to investigate to find solutions to common problems. This lack of enthusiasm to investigate according to the argument also explains why Africans prefer not to exploit their vast mineral wealth to benefit themselves but rather choose to export raw materials for peanuts instead of adding value to them before export.

I beg to differ from the opinions expressed above regarding Ghana and Africa. It is not true that Ghanaians do not appreciate the economic value of the resources that they have. Neither is it true that they are not enthused to have the resources exploited to benefit themselves. The problem regarding Ghana's rich resources and her poverty has to do with the question of how to convert the resources into finished products on a large scale to benefit the people and not lack of enthusiasm. It is also the question of what to convert the resources into in other words what use to put the resources into so as to let the people benefit. It is a question of ability to convert the resources into consumables and what consumables to put the resources into (diversification) and not lack of interest in capitalism as some expert would want us to believe.

It is true Ghana and for that matter Africa is rich in minerals, timber, oil and gas and has the answer to a number of resource need questions facing the world today. However, it is equally true that resources are not but they become. That is to say the availability of natural resources alone does not make a country and her people rich or better. It is rather the ability to convert these resources into finished and semi finished goods on a large scale and making them accessible to the people that brings development and prosperity.It is the capability to make sense the existence of the wealth that count and not just the mere presence of the wealth. Having vast mineral deposits is a potential or a launch path to economic and social development but having potentials alone is not enough to alleviate poverty. It is the ability to find uses for these resources that bring benefits to the people and help alleviate them from poverty and underachievement.

Unfortunately and very sadly such abilities and talents do not exist in Ghana and Africa. Ghana does not have the human expertise, the technology, the know-how and the infrastructures needed to tap these accumulated resources to benefit her people. Converting natural resources into finished and semi finished products is a process. It requires having deep knowledge and understanding about the methods, the technology, the know-how, the expertise and the engineering capacity needed to get the process running. It also requires having a system of infrastructures in place to make the process work. But unfortunately such conditions and requirements do not exist in Ghana.

It is very common to hear Ghanaians say we have gold, diamond, timber, cocoa, bauxite, manganese or Nigerians say we have oil and gas but few can tell what these resources are used for. How many Ghanaians or South Africans know that gold is used by industries such as medicine, computers, dentistry, electronics, Jewellery, coins, space, art, and how many of these industries are in Ghana and South Africa? Despite being the giants of gold producers in the world these countries receive peanuts, because their exports consist of gold in it natural form not the jewellery that brings in the tens of billions of dollars and create millions of jobs. Ghanaians have recently been celebrating the finding of crude oil in the country but the question is with whose technology and expertise were the oil found? And are they also going to export crude oil too? I hope not but sorrowfully it will soon be yes.

A coltan miner in Walikale, DR. Congo was asked whether he had any idea what the mineral he was mining was used for. He stood for a while, blink his eyes for some seconds, shook his head and said, 'I have not a slightest idea'. Coltan is a mineral found in every mobile phone and a number of electronic devices around the world. Although he mines the mineral he could not tell what it is used for. And this miner is not alone is his lack of knowledge. In fact, few Ghanaians and Africans know what uses are derived from the many resources that are found in the continent. The inability to find uses for these resources to benefit the people means that Ghanaians and Africans have had to export the resources as raw materials and nothing else. And how much revenue will raw materials bring? Or how many jobs will raw material export create?

Ghana and Africa have not been able to use the resources to benefit their people because the technology and expertise needed are absent. For example a great number of the natural resources in Ghana and Africa are found in very obscure places and require highly sophisticated engineering work in order to mine or drill them. Some of the resources sit deep beneath the ground. Some are found in mountains. Others are found deep beneath the ocean floor. And to have access to these resources you must have the knowledge, the know-how, the expertise, the infrastructures and the financial resources to successfully harness them but sadly all these are lacking in Ghana and Africa. The absence of such technologies and expertise in Ghana explains why raw materials dominate her trade. The absence also explains why hunger and poverty is prevalent in the mist of abundance of natural wealth. The absence also explains why the oil and gas industry for example is dominated by ExxonMobil, Texaco, Total, BP and Shell all of them foreign owned. The exploration, production and export are all done by these foreign companies because they have the technology, the human expertise and the know-how to make sense the existence of the oil and gas. The same is true for mineral production in Ghana and Africa. It is also dominated and controlled by foreign companies because they have the means to make the stones useful resources not to Africans but to Europeans.

There are few or no diamond and gold cutting firms in Ghana because the technology and the expertise do not exist. As result diamonds are exported in their natural octahedral state to countries that do not produce the gem but have the technology and the expertise to polish it. Most of these countries are in Europe, America and Asia. These uncut diamonds are sold at relatively cheaper prices in Europe and the cut diamonds are imported back to Ghana and Africa at highly unattainable prices. What a sad story! How do we fight unemployment and put money in people's pocket when we export diamond and gold in their natural state? The negative impact of absence of technology in Ghana is all true clear when we consider Japan.

Japan in relative terms has no natural resources of her own yet it is the world's second biggest economy because she has the technology to convert the resources obtained else where into finished goods. The same is true for most European and North American economies. On the other hand DR Congo for example has all the resources you can think of yet it is one of the poorest in the world because she does not have the technology to tap the resources to benefit her people. In some cases she does not know she has the resource until told by people with the expertise.

So Ghana and other African nations may be resource rich but will continue to be poor at least for now, because they do not have the technology, the expertise and the supporting infrastructures to convert these natural resources into finished and semi finished goods that will benefit the people and help lift them from poverty and underdevelopment. Of course Ghana has the resources but she does not have the capability to make them consumables. She does not have the knack to convert them into finished and semi finished goods. She does not have the human, financial and technological resources needed to transform the resources into products that directly benefit the people.

Therefore for the people to benefit from the true value of these rich natural resources, Ghanaians and Africans must look beyond just mining stones and drilling crude oil for export and begin to think about how to convert these stones and metals into uses that directly benefit the people. This calls for the establishment of well funded specialised research institutions that will be able to research and come up with ideas that will make these resources beneficial to the people. Until such ability and talents are developed, Ghanaians and Africans will continue to export raw materials, receive peanuts for their effort and remain poor and underdeveloped.

To the Ghanaian he has resources but to the European, American, Japanese and Chinese the resources are not but they become.

Lord Aikins Adusei

quot-img-1Do a Buhari! Declare your assets politician!

By: Prof Lungu quot-img-1
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