The first barrel of oil: 15/12/10 - Ghana joins oil states of Africa

As of 10:06am today, Ghana has officially opened the valve to pump Ghana’s first oil and has put this country on the map, irrevocably as an oil producing country.

As I write this, my Ghanaian colleagues are huddled in the boardroom, in front of the TV sharing their reactions to the live program broadcasting the ceremony, where Ghana’s President Mills did the honours of turning the valve.



Many are excited. It’s palpable. What could this new beginning mean for Ghana? What possibility, opportunity, future is held in the frightening prospect of becoming Africa’s next big oil producer?

Being the skeptic that I’m apt to be after my 15 years in Africa, I think of the dangers. Oil in Nigeria virtually destroyed the agricultural sector — which now contributes only two percent of foreign exchange earnings. The same expansion of oil led to inflation and the growing culture of corruption. Ghanaian leaders are proving they are definitely not immune to such temptations…

David Throup of Online Africa Policy Forums Blog points out that:

Ghana urgently needs to improve its infrastructure: it needs new sewers and water pipes and ring-roads in Accra, a revamped electricity grid, improved generating facilities at Akosombo, improved rail-links from Accra to Kumasi and Tamale and on to Burkina Faso, and a renewed and extended network of secondary and tertiary feeder roads through the rural hinterland.

Others will argue for improving educational and health facilities. Such development spending would generate employment in construction and ancillary services, and hopefully promote sustained economic activity and growth. In a society where 60-70 percent of the population depends on smallholder agriculture for their livelihoods and 90 percent of the population in urban areas depends on the informal sector, such job-generating spending could be beneficial. But the money must be spent wisely and over a number of years if it is not to exacerbate inflation and exceed Ghana’s capacity to absorb the spending.

These are the first days of the rest of Ghana’s life. Ghanaians are proud and hopeful. The flag is flying high and the children are so full of possibility.

These are the days where the integrity of the politicians and the maturity of the decision makers will be tested. The results will follow in years to come. The judgments must be left to posterity.

Ghana - Gateway to the World's Worst Economies

I hate to be a party-pooper, what with all the hoopla around the World Cup, and the great cohesive vibe it creates, but it has come to my attention that outside the football stadium, all the recent great press about Ghana, and it's potential is just that - words. Empty, disappointing and ultimately false.

Ghana has been called 'the Gateway to Africa' and Wikipedia's Ghana article even states that:

"The economy of Ghana has a diverse and rich resource base, and as such, has one of the highest GDP per capita in Africa"


Apparently, Wiki along with alot of others have their facts wrong.

Why is the average Ghanaian poorer now that they were a few years ago? Why is there no manufacturing here? Why is the country still heavily dependent on remittances from Ghanaians abroad, and on the macro level from various Governments and NGOs?

The sad news today is that Forbes have published this year's list of the WORLD'S WORST ECONOMIES. And our beloved Ghana, the star of Africa is on that list.

Forbes clarifies the criteria for their selection as follows:

"All the countries on this list have at least one trait in common: Their governments discourage private investment--and economic growth--through policies of crony capitalism, expropriation or arbitrary enforcement of the laws. That makes it difficult to generate hard currency to pay off government debt and discourages citizens from investing in education to improve their own economic lot."

This does not sound like the Ghana that is promoted by the development community and the politicians alike. This does not sound like the Ghana my fellow bloggers embrace and adore. This sounds like the harsh reality of numbers. The fact that corruption, at the end of the day, cannot be hidden completely. This sounds like the day of reckoning, when all the political dogma and happy clappy optimism flies out the window and is replaced by cold hard facts.

Here is the description of Ghana from Forbes article:

"GDP per capita: $671
Inflation rate: 16%

Bauxite, the world's largest manmade lake, a 1-gigawatt hydroelectric plant and now offshore oil. Ghana's got it all, except a functioning economy. Persistent electricity shortages have sidelined the massive Valco aluminum smelter and the government of Ghana must privatize several money-losing state-owned enterprises to reduce its budget deficits, which run close to 10% of GDP. Oil revenues are expected to flow next year from offshore fields, being developed by Anadarko Petroleum and others. Perhaps the government will use the money to stabilize its finances instead of launching another spending binge."



Ghana is accompanied by countries like Liberia and Sierra Leone, ravaged by decades long civil wars, and Zimbabwe - a country crippled under the world's most evil dictator. 9 out of the 10 countries are African.

I was surprised to see Ghana on such a list. Afterall, we've had decades of peaceful leadership, numerous democratic elections, natural resources in abundance - from bauxite to gold and now oil... What is Ghana's excuse?

The overwhelming message from this report to Ghana is simple mismanagement. The problems, it states, are mostly homegrown. We can't blame the world for our troubles Ghana - this embarassing state of affairs must be dealt with and faced. Otherwise, next year's oil payload will most definitely lead to more greed and mismanagement, and Ghana may slip further instead of shining as it should - as the star of this floundering continent...

China Colonialises Ghana over fois gras

As we pulled into the tiny obscured driveway of our favourite restaurant in Ghana the other night for a predictably lovely supper, we were flanked on both sides by two heavily armed, camouflaged soldiers.

We didn’t expect that.

We also didn’t expect the four police cars and long black limos with tinted windows that filled the parking lot with their ominous presence and a disturbing but electric energy. The feeling that something important was about to happen.

As a sliver of gravel was found by the security guards for our car, we emerged hesitantly, and noticed the suited Chinese robot-types standing strategically around the lot. It was like an Asian replica of an American presidential security force.

It turned out that Ghana’s Vice President was meeting some Chinese foreign officials for a discussion over supper, and they happened to have good taste.

They dominated the space and the energy of the evening, as politicians and others with overblown egos tend to do – the entourage on both sides, ensuring their heavy presence was known and felt.

So throughout our supper, between my goat cheese and honey rocket salad and peppery yet creamy Portuguese chicken livers, I pondered the three Chinese guys standing outside, through the window in the front garden.

I thought about what the supper on the other side of the dining room really meant. I wondered what deals were being sealed over Cabernet Sauvignon and sole meuniere. I also thought it strange – important men from two cultures, both with strong and defined cuisines, choosing to dine together in another totally foreign restaurant…

Witnessing that meeting just brought home to me what I’ve been reading about and seeing from afar for years in Ghana – the slow undercurrent of Chinese stronghold in Africa. The new colonization in progress.


I thought it strange, when a few months ago we noticed the team of labourers who were busily erecting the colossal new Ministry of Defense building (funded entirely by a $50m grant from China), in Accra. They were all Chinese! In Ghana! Pushing wheelbarrows and heaving loads of cement.




You had to ask yourself why on earth there would be a need to import unskilled Chinese labourers to do grunt work in a developing country where the unemployment rate hovers around 71%!!!

A few years ago, China fronted $622m for the Bui Dam project in Ghana - and imported 500 workers from China at that time as well.

The stories about China’s extreme generosity toward Africa and specifically Ghana are abounding.

But the real question is what lies behind the grants and loans and projects.

The truth is that China stands to benefit, and indeed is already benefiting far more than Ghana. Government policies are bent and stretched and molded to facilitate China’s aims.

Ghana currently imports more from China than any other country in the world.
“From 2000 to 2008, China’s exports to Ghana increased manifold from $93 million to $1,512 million.” Something like 1500% increase?! I sense a trend here…

In terms of trade, Ghana exports raw materials like cocoa, gold cotton and timber at less than $50m per annum to China, while imports of cheap Chinese electronics, textiles, plastics etc. flood the market and threaten the precarious position of local manufacturers and merchants.

And China’s eye is on the big prize. Oil. China is only second to the USA in terms of oil consumption in the world, and large offshore deposits of oil have been discovered off Ghana’s coast in the past few years… a match made in heaven?

Recently a consortium of Chinese companies (CNOOC) out bid Exxon Mobil for a share in Ghana’s oil exploration. They allegedly added a $2billion concessionary loan to the Ghana Government, to help increase it’s infrastructure in gold exploration.

So they have secured their place and guaranteed China’s position to reap the rewards as the oil starts to flow.

Ghana’s professor George Ayittey, interviewed this week on TV3, warned that:

“Barter deals with China - in which China sets the rules - have a huge potential for graft and corruption. Everybody should be able to see exactly how much Africa is getting from the deal.”

Despite CNOOC’s dismal track record for human rights, environmental protection and general lack of experience, they now have a foothold and Ghana’s new oil business.



I wonder if the Vice President, having shaken hands with his Asian counterparts, then washed his French supper down with the bittersweet wine of his country’s impending colonialization.

Toilet Politics, Oil and the Malibu Mansion

I was going to write the other day, on World Toilet Day – which was on Thursday. Not because I wanted to highlight the sad reality that a vast number of people on the continent where I live have no access to proper sanitation, including toilets…

I was going to write on that day because I heard, on the same BBC radio broadcast, another story about yet another massively rich, corrupt African stashing his billions abroad.

In other news, yesterday I heard the flabbergasting news that the EU is donating $1 BILLION to Nigeria, to help with corruption…

HUH? To help WITH corruption. Why does stuff like this still surprise me?
Right. A bit of background…

In the first story, our reluctant hero is Mr. TN Obiang, the Minister of Forestry and Agric. (and the son of the President) of Equatorial Guinea.

His country is the third richest in oil in Africa, just below Angola and Nigeria. There is a tiny population of half a million people. In 2007, the government sold USD$4.3 Billion in oil. Yet 90% of the 500,000 inhabitants live on less than a dollar a day.

This leaves quite a few billion for the government guys…

The news story goes on to explain that Mr. Obiang travels freely between his little country and the USA, to his Malibu Mansion, commonly carrying millions in cash each time he enters the states(normally punishable by a 5 year prison term), despite supposed laws in the states that deny entry to corrupt foreign officials. He keeps quite a few millions in bank accounts in America as well.



These laws are enforced, when it comes to guys like Mugabe – Zimbabwe’s tyrannical despot.

Why the double standard then?

Oil. And America’s interest in it.

Which brings us to the second story. The EU working with the Nigerian government, globally renowned for corruption, by offering them USD$1 Billion to assist…

Other African countries are up-in-arms about the choice of this massive donation to the richest oil country in Africa, eighth richest oil country in the world.

But that is the point really.

Oil. And the EU’s interest in it.

In the BBC story, the reporter asked so many of the questions I was squirming in my seat, itching to ask.

“Why Nigeria? With it’s vast oil reserves and billions in annual income from oil?”

“With the Nigerian government’s dismal track record for corruption, surely the EU is somewhat concerned that the funds will not be used as per their intended aim?”

etc. etc. etc.

The answers from the EU press officer were wishy-washy, non-committal. No surprise.

What makes my blood boil is that the bleeding heart Americans and Europeans don’t put all these facts together.

NGO’s grow and collaborate and fundraise, and promote guilt and scrape like finger nails on the thin raw skin of western conscience, to help, help, help! These helpless Africans.

Meanwhile the Western governments condone, concede, support and feed into the corruption.

When Mr. Obiang is welcomed at LAX, whisked over to his Malibu mansion in the stretch limo, darkened windows, cool aircon and refreshments in the back seat, there is a directly proportionate mass of slum dwellers back home, robbed of the basics of sanitation, housing, education, clean water, electricity. Babies are born and die the next day in a pool of their mother’s blood where the midwife couldn’t save their lives in the corrugated iron shack amid the thousands in a shanty.

I read further that despite his official salary of $6000 per month, he bought his mansion for $26million cash. Plus three Bugatti Veyron sports cars at £1.2million each.

The proceeds from just one of these cars would have bought enough mosquito nets for every child in his country, where malaria is the number one childkiller.

So the next time a campaign to end poverty in Africa comes my way, I’ll give them the address of T N Obiang in Malibu. I doubt he’s given yet.