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Economy & Investments | Jan 31, 2005

Oil Workers' Strike Could Harm Ghana's Economy

Public Agenda

A threat by Nigerian oil workers to go on strike could spell doom for Ghana's economy. This is because Ghana's economy depends on Nigeria for than 60 percent of oil supply. Not only does Nigeria supply the oil, she also provides 60 days grace period for payment, the best deal ever for Ghana on the international oil market.

Trouble started when workers at WASCO, a Malaysian-owned oil services firm based in Port Harcourt, launched a strike to demand the resignation of two expatriates who they alleged had maltreated the local staff.

Although the stoppage is still confined to WASCO, the two unions - NUPENG and PENGASSAN have threatened to extend it to other foreign oil companies in Nigeria, Africa's largest producer and the world's sixth biggest exporter if the dispute is not resolved urgently.

Last Thursday a meeting to avert the potentially damaging strike was said to have ended without agreement. "We are continuing with the meeting this morning after adjourning last night," General secretary of the white-collar oil workers union PENGASSAN Mojibayo Fadakinte told Nigerian journalists.

The meeting, which began in the southern oil city of Port Harcourt last Tuesday, was called by the labour ministry to avert a strike that could disrupt Nigeria's exports of some 2.5 million barrels of crude oil per day. At press time last Friday, the signals were not clear.

An oil sector strike in Nigeria is bound to put further pressure on the international oil price, already hovering around 50 dollars ahead of the Iraq elections and ongoing northern winter supply concerns. For Ghana, high Inflation could well bounce back, as fuel price increases loom.

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