14 February 2011

Ghana: Making Judicious Use of the Oil Revenue


Last Thursday, just as this paper prepared to go to bed, news filtered through of an additional new oil field discovery. Tullow Oil Plc announced significant oil and gas finds at a location not very far from the Jubilee Oil fields at Cape Three Points. The initial estimate is that the new field could hold up to 200 million barrels of oil and gas.

For a nation that is so financially challenged that $11 million dollars earned by the Black Stars in their sterling display in the 2010 World Cup in South Africa has been lodged with the Ministry of Finance, instead of the accounts of the Ghana Football Association, the discovery of another oil field should be music in the ears of the shapers and movers of the state economy.

With exploratory work still on-going in the Volta basin and some locations within the Volta Region and other places within the Western Region, indications are that this nation could become a major player in the oil industry in the near future.

More oil finds would help ease the burden on the cedi, which is slipping badly against the major currencies. The cedi was quoted at almost one to one with the dollar, when the nation went to the polls in December 2008.

It dropped sharply against the major currencies when the then incoming Trade Minister, Ms. Hannah Tetteh, dropped her infamous 'Ghana is broke' bombshell. The cedi then rallied, according to an official pronouncement, "as a result of prudent" economic measures put in place by the government.

It is beginning to look like the measures are no more holding. At the last count, the cedi was being exchanged for the dollar at GH ¢1.53, an indication that the national currency has depreciated by about 30 percent in recent times.

The economic squeeze has also translated into higher prices of goods and services, in spite of Ghana Statistical Service indicators, singing lowering inflation songs.

While the government trumpets its 'Better Ghana' agenda, translating into commissioning of projects, many key projects like the Achimota-Ofankor and the Nsawam-Apedwa stretches of the Accra-Kumasi Highway, and the Tetteh Quarshie Interchange-Adenta section of the Accra-Aburi Highway, all appear to have been abandoned. In Kumasi, the Sofoline Interchange has seen no construction work on it for sometime.

It has got to the point when ordinary Ghanaians are beginning to wonder whether political allegiance is beginning to influence the way development projects are distributed in this nation.

In all these, The Chronicle would like to believe the bottom line is that the economy is too fragile to fund development projects all over the country.

There are indications though, that the various oil finds would help address the infrastructural deficiencies, as well as make it possible for the average Ghanaian to lead a meaningful life.

It is reason enough for the authorities to make whatever is earned from the black gold go round. Our oil should be a blessing, not a curse!

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