Oil, Ghana and 'Democracy'

The flavour of the month in Ghana is oil. A few months ago, the UK-based company, Tullow Oil, announced the discovery of 600 million barrels of light oil offshore from Ghana. The response from a jubilant President Kufuor was that, ‘Ghana is an African tiger…[that] even without oil, we are doing so well, already. Now, with oil as a shot in the arm, we're going to fly’. Indeed, the discovery of oil – or more specifically, the hype surrounding its discovery and the potential for there being even more reserves – has been a major coup for the ruling NPP party, which should ride this hype, secure external monies for their upcoming election campaign, and crush any competition from the challenging NDC party at the ballot boxes.

In reality, though, the oil reserves discovered in Ghana are not much to speak of. A colleague tells me that there is only four and a half years’ worth of oil here, which is nothing when compared to the proven reserves in the nearby Niger Delta, or the region’s ‘up and coming’ petro-states like Chad and Equatorial Guinea. All of the hype, however, centres on the question of ‘what if?’ Officers at Tullow claim that there is significantly more oil offshore, which would put Ghana right in the thick of things with the other major oil producers in Africa. What if they are correct? If they are, then all eyes will certainly be on Ghana.

We are all well aware of the corruption that plagues the petro-states of sub-Saharan Africa. Donors try and convince us that initiatives like the EITI will lead to improved governance in these states, in turn, enabling poor people to benefit from the huge sums of money generated from increased oil production. But we are well aware that neither Chad, Equatorial Guinea nor Cameroon has the institutional machinery in place to manage petroleum revenues effectively. In an effort to explain the abnormally poor economic and social performance of these, and other, oil economies in sub-Saharan Africa, political scientists and economists point to, inter alia, the propensity for rulers to ‘rent-seek’ and consequent grievance-based insurgencies. Simply put, oil breeds corruption. The imperialists and neo-liberalists always point to Norway as a success story and something for these countries to work toward – that with hard work and commitment, oil-rich countries in sub-Saharan Africa can also achieve high levels of economic performance. But does Norway have sparring tribes? Has it been decimated by slavery? Has it had an exploitative colonial history? In such an environment, the leaders of oil-rich states are only concerned with enriching themselves, their families, and occasionally, their tribes.

So where does this leave Ghana, which, for reasons unexplained, continues to be portrayed by the West as the beacon of post-independence sub-Saharan Africa and a ‘success story’? Because it has not had a large-scale genocide, has fewer tribal frictions, and no HIV/AIDS epidemic, it is a success story? Indeed, when compared to the likes of the Democratic Republic of Congo or Rwanda, Ghana is, as the president put it, ‘doing so well’: it has a free press, has had two fairly free democratic elections, and there are no coup d’etats looming on the horizon. But let us not forget that the country suffers from widespread poverty, has alarmingly high levels of corruption, and has serious power problems. Judging by what has unfolded in neighbouring petro-states, the discovery of significant amounts of oil will not correct any of these problems.
Any additional discovery of oil will indeed put Ghana’s so-called democracy to the test.