Ghana

Just Another Stage in Ghana’s Long Walk to Transformation

Dec 15th, 2010 5:26 PM UTC
By Joseph Powell

Today marked an historic moment for Ghana as it joined the ranks of oil producing countries. President Atta-Mills oversaw the opening ceremony and told his people that the find “should be a blessing and not an oil curse”. Production will initially be around 55,000 barrels a day. ONE is currently campaigning to ensure that all revenue received by Ghana and other countries will be published, empowering civil society with the information they need to hold their leaders to account.

To mark this occasion ONE invited Bright B. Simons – a researcher at the Accra based think-tank ‘IMANI’ – to write a guest post on Ghana’s economy and the impact the oil discover may have.

As we turn over to a new decade, a new story beckons for Ghana – that of oil.

The insights that the telecom transformation of the 90s and the financial sector transformation of the 2000s bring to bear on the new oil era are especially poignant.

In the 90s, wise reforms saw the liberalisation of the telecom sector through the strengthening of independent regulators and marrying of private incentive with national interest, with the eventual result that access to telephony increased from 1 in 300 persons in 1994 to more than 1 in 2 persons today. Similar policies saw the blossoming of the financial sector in the 2000s. Private investment surged into insurance and pension funds. Private equity became almost mundane, as the likes of Ghana’s DataBank led the drive to buy into the moribund erstwhile state-owned manufacturing sector, albeit with mixed results. And by the end of the decade, the number of banks operating in the country had grown in number from just about a dozen to more than 27.

If oil is to become the new growth pole in Ghana’s economy, then similar attitudes to disciplined and innovative policymaking must be embraced, especially, by the political elite.
This morning, the Ghanaian President symbolically turned on the taps for oil to begin flowing from Ghana’s first significant commercial oil find – the Jubilee field.

The “program of field development” leading towards this day has been available to the government in various formats for more than two years. Yet, the updated laws and regulations to govern the nascent production stage of the program are still being fiercely contested in Parliament. More critically, the Ministry of Energy is still in charge of the sector as the de facto regulator.

There is anything but clarity about several key aspects of the industry. The policy process is happening in the context of a transparency vacuum that frightens social activists and public interest analysts. Revenue analysis for policy planning purposes remain superficial because there is still no official view on how much it would cost to produce a barrel of oil from the field.

Of the other two key parameters that would determine the likely revenue inflows, only the estimated average price of a barrel of oil in the coming fiscal year (presumably discounted to North Sea Brent since the new oil is “light sweet” crude) has received official treatment. Anticipated average volume of production is only murkily appreciated. The reason being that in the name of “fast-tracking”, the original plan that called for the development of more than two dozen production wells was pared down to one in which less than half of this expected number was drilled. Pipelines to cart away gas associated with the oil to power onshore power-plants and feed fertiliser factories, amongst other hopes, won’t be on stream for at least 18 months.

In the specific case of the gas infrastructure, even though the political elite would be hard put upon to concede, the truth is that the financing was mired in confusion, with rival companies laying claim to the technical contract, because government argued that all the gas ought to be provided to the state for free. They should have, as in the case of the telecom liberalisation of yesteryear, married national interest to private incentive. Today it is still not clear whether the associated gas shall be flared, used in place of crude to power the converted vessel that is serving as the production platform, or injected into the field. While the oil companies have at several points indicated that injection was the most viable compromise (and had even drilled wells for this purpose), it now appears that this approach could endanger the integrity of the field, and that one of the gas-injection wells have actually not been completed.

The companies say there shall be “operational flaring” of the gas (a practice abhorred by environmentalists), and that this is permitted by incoming regulations. The government says there shall be no flaring. As usual, you can’t make head or tail of it.

The oil find, impressive though it is, does not change the fact that Ghana’s proven reserves and production volumes are puny compared to what pertains in places like Angola and Nigeria, where the force of oil has been substantial enough to knock out of place several important systems. The real choice is not so much as between “curse” or “blessing” but actually one of oil becoming either a “catalyst” or simply “stuffing”. A catalyst would generate multiplier effects across the economy. Stuffing, on the other hand, will create the bloated impression of plenty, leading to reckless spending decisions and creeping fiscal irresponsibility.

Wisely, however, the government has begun to dampen some of the excesses of enthusiasm that had begun to build up around the oil. It has revised anticipated oil revenues for 2011 from $1 billion to a conservative $400 million. This is very prudent since revenue forecasting for policy planning purposes, in direct contrast to revenue forecasting for commercial public relations purposes, should be conservative.

When the revenues start coming in, whatever the quantities might be, it would be important to recognise that oil is a finite resource, and therefore rather than using the funds to prop up the current wasteful structures of public spending, in which only 12% of the national budget goes into actual investment, it would be important to create a separate investment vehicle with independent managers accountable only to Parliament. The mandate of these managers would be to invest in “successor areas” in anticipation of the close of the oil era within a generation. It is the revenue from these vehicles that must be spent strictly on investments in health and education in order to enrich the human capital of Ghana. Only therein lies hope for this country.

As you watch Ghana’s political elite, decked in blue jumpsuits branded by one of the 5 private companies in the consortium that developed the Jubilee field, sauntering through the steel maze of the production vessel’s deck on national TV, the image seems very apt. They are still finding their way through the labyrinth.

For all our sakes, I hope they make it.

Bright B. Simons is a public interest researcher at IMANI Center for Policy & Education. The opinions expressed in this guest post are the author’s alone, and do not necessarily reflect the views and opinions of ONE.

Global Fund and (RED) Provide Hope at Tema General Hospital in Ghana

Mar 17th, 2010 5:39 PM UTC
By Christy Turlington Burns

ONE is embarking on a listening and learning trip to Senegal, Ghana, Mozambique and Kenya with members of our board and other supporters. Christy Turlington Burns checks in:

I met an inspiring woman a few days ago in Accra, Ghana. Her name was Elizabeth*. She is a mother, a widow and she is HIV positive. This may sound pretty grim, but what I learned from spending some time with her is that Elizabeth and her two-year-old daughter Abigail* are getting the care they need here at the Tema General Hospital.

Elizabeth learned about her HIV positive status when she came here to be tested after her husband died a few years ago. She was pregnant at the time, which was actually a blessing, because it enabled her to begin antiretroviral treatment at a critical time for Abigail. Abigail takes a prophylactic drug to prevent infection of the AIDS virus.

I also spent some time with the nurses here who counsel the families who come into the clinic from up to a 15 kilometer radius to be tested. They shared other stories like Elizabeth’s, where women sought them out to be tested and then treated if their results were positive. When mothers have access to ARVs, they use them. And when they use them the chances of vertical transmission (when the virus travels inadvertently from the pregnant mother to her child) are minimal. At Tema, a mere 4% of babies whose mothers have begun treatment test positive. I was told that just a few years ago things were not nearly as hopeful.

Before the Global Fund and (RED) started distributing money to treat and prevent AIDS, there was very little incentive for the poor in Ghana to test because having HIV was a virtual death sentence.

Dr. Patricia Nsamoah, a senior medical officer and HIV focal person at TEMA, told us about the state of the clinic before they received Global Fund (RED) money.

“We’ve been testing HIV for a very long time, but basically people just didn’t know what to do if they tested positive for HIV,” Dr. Nsamoah said. “So when ARVs came, the Global Fund made it possible for us to have access to ARVs. You can at least see a patient, treat opportunistic infections, test for CD4, and at the point when they need the ARVs it is available and you can have a success story. Previously if you were working in the fever unit as the doctor in charge, what you did at the beginning of every morning was to sign death certificates because overnight by the time you came people had just died. But now a lot has changed… I’m telling you the clinic just grows bigger because people do not die.”

Today, Tema serves more than 2,200 people infected with HIV/AIDS in Ghana. These families are thriving and they are hopeful despite all they have endured. Abigail is a beautiful, curious little girl. She is confident with wise eyes that have seen the future.

*Elizabeth and Abigail’s names have been changed to protect their privacy.

Obama Just Spoke in Ghana

Jul 11th, 2009 2:55 PM UTC
By Virginia Simmons

US President Barack Obama just finished speaking in Ghana and I wanted to share a few key quotes:

I am speaking to you at the end of a long trip. I began in Russia, for a Summit between two great powers. I traveled to Italy, for a meeting of the world’s leading economies. And I have come here, to Ghana, for a simple reason: the 21st century will be shaped by what happens not just in Rome or Moscow or Washington, but by what happens in Accra as well.

I do not see the countries and peoples of Africa as a world apart; I see Africa as a fundamental part of our interconnected world – as partners with America on behalf of the future that we want for all our children. That partnership must be grounded in mutual responsibility, and that is what I want to speak with you about today.

…we must first recognize a fundamental truth that you have given life to in Ghana: development depends upon good governance. That is the ingredient which has been missing in far too many places, for far too long. That is the change that can unlock Africa’s potential. And that is a responsibility that can only be met by Africans.

As for America and the West, our commitment must be measured by more than just the dollars we spend. I have pledged substantial increases in our foreign assistance, which is in Africa’s interest and America’s. But the true sign of success is not whether we are a source of aid that helps people scrape by – it is whether we are partners in building the capacity for transformational change.

Across Africa, we have seen countless examples of people taking control of their destiny, and making change from the bottom up. We saw it in Kenya, where civil society and business came together to help stop post-election violence. We saw it in South Africa, where over three quarters of the country voted in the recent election – the fourth since the end of Apartheid. We saw it in Zimbabwe, where the Election Support Network braved brutal repression to stand up for the principle that a person’s vote is their sacred right.

Africa doesn’t need strongmen, it needs strong institutions.

People everywhere should have the right to start a business or get an education without paying a bribe. We have a responsibility to support those who act responsibly and to isolate those who don’t, and that is exactly what America will do.

With better governance, I have no doubt that Africa holds the promise of a broader base for prosperity. The continent is rich in natural resources. And from cell phone entrepreneurs to small farmers, Africans have shown the capacity and commitment to create their own opportunities.

Aid is not an end in itself. The purpose of foreign assistance must be creating the conditions where it is no longer needed.

Africa gives off less greenhouse gas than any other part of the world, but it is the most threatened by climate change.

Wealthy nations must open our doors to goods and services from Africa in a meaningful way. And where there is good governance, we can broaden prosperity through public-private partnerships that invest in better roads and electricity; capacity-building that trains people to grow a business; and financial services that reach poor and rural areas. This is also in our own interest – for if people are lifted out of poverty and wealth is created in Africa, new markets will open for our own goods.

When children are being killed because of a mosquito bite, and mothers are dying in childbirth, then we know that more progress must be made.

With strong institutions and a strong will, I know that Africans can live their dreams in Nairobi and Lagos; in Kigali and Kinshasa; in Harare and right here in Accra.

Read President Obama’s full speech after the jump.

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Obama to travel to Ghana in July

May 17th, 2009 10:10 AM UTC
By Virginia Simmons

As released from the White House yesterday, Obama will visit Accra, Ghana, on July 10 and 11. It will be his first trip to the sub-Sahara Africa as U.S. president. (His first trip to the African continent as U.S. president will be to Egypt in June.)

From the May 16 “White House Release on Upcoming Obama Travel:

“The President and Mrs. Obama will visit Accra, Ghana, from July 10 to 11. While in Ghana, the President will discuss a range of bilateral and regional issues with Ghanaian President Mills. The President and Mrs. Obama look forward to strengthening the U.S. relationship with one of our most trusted partners in sub-Saharan Africa, and to highlighting the critical role that sound governance and civil society play in promoting lasting development.”

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Making Aid Work Better

Aug 31st, 2008 2:17 PM UTC
By Katy.Cronin

Hello from Accra, Ghana, where ONE is taking part in major meetings about aid effectiveness this week.

A team from our London and Nigeria offices is here, joining hundreds of others from government and civil society from around the world, to make aid work harder in the fight against poverty.

We know that effective aid is improving the lives of millions of people, but a slowing global economy and rising food and fuel costs makes it all the more important that every cent is spent well.

There are many ways to improve aid effectiveness. ONE, as part of a new group called “Publish What You Fund,” is concentrating on improving the quality of information on aid spending.

Without good information, planning for schools, hospitals, roads, sanitation and the other elements of development is extremely difficult. Citizens also find it very hard to hold their governments accountable. And without good information, it is impossible to be sure that resources are being used well.

In many very poor countries, up to half of spending on donor-funded development projects is done outside government. This is sometimes necessary if local systems aren’t in place, but this can also lead to a lot of duplication and waste of resources.

At the High Level Forum on Aid Effectiveness in Accra this week, (more…)