The Black Gold: The Mixed Blessing of Oil and Gas in Ghana

In 2007, UK's Tullow Oil discovered about 600 million barrels of light oil off Ghana's shores. Since then, Ghanaians have been teetering between optimism and fear - cautiously awaiting what will result from the extraction of this much sought-after resource.

Yesterday, I attended a meeting at NETRIGHT (a member-based umbrella organization of women's organizations in Ghana) on "Gender Issues in Oil and Gas Exploration." NETRIGHT has organized a committee to address issues that have emerged from the oil and gas extraction from a gender-based perspective. This committee, comprised of a small number of national & local NGOs including ABANTU, is seeking to establish itself as a lobbying group and a mouthpiece for those communities most affected by the oil and gas extraction - communities whose voices are often neglected.

Much of the media buzz on Ghana's oil has remained optimistic. Many are anticipating widespread job creation and a hefty new revenue stream that will help fund all sorts of national programmes in health and education and ideally improve infrastructure. However, amidst the widespread giddiness over the potential boost to the economy, apprehension and fear are just as strong as many are all too familiar with oil's nasty reputation for destruction. Ghanaians need not look any further but to their (almost) neighbour Nigeria - a country where the oil industry has caused one nightmare after another.

Environmental degradation, the illegal usurping of land and subsequent destruction of farmers and fishermans' livelihoods have plagued Nigerians surrounding the oil regions. In addition to these issues, Nigerians have witnessed widespread human rights abuses, terrible corruption and an increase in violence (including the murder of Nigerian activist Ken Saro-Wiwa) all due to the oil industry in the country. Needless to say, the majority of Nigerians have yet to see the benefits of their country's valuable natural resource. For more information on oil issues in Nigeria, take a look at this link: http://www.globalissues.org/article/86/nigeria-and-oil.

The purpose of yesterday's meeting was to brief committee members on the socioeconomic issues that we can anticipate from the oil extraction in Ghana, using countries like Nigeria and Equatorial Guinea as examples. Through awareness campaigns, activism and lobbying, members of this committee hope to get policies in place that will prevent oil's destructive patterns.

Dr. Akosua, one of the committee members, initiated the meeting with a thorough literature review on the impacts of oil and gas on local communities. She also reviewed a recent study conducted by Dr. Rudith Kings on the impact of oil on the livelihood of citizens in Ghana. It was a fascinating albeit frightening introduction to the issues that we can anticipate in the communities where oil and gas extraction will occur. In some cases, we can already see the impacts taking place on local environments and economies. I'd like to summarize some of the key issues that Dr. Akosua touched upon.

For many African countries, Dr. Akosua reminded us, natural resources are a curse rather than a blessing. Take, for example, the mining of gold or diamonds. History has shown us a solid link between countries rich in resources and conflict - particularly with oil. Dr. Akosua sited a UNEP 2009 study that reported "since 1990, 18 violent conflicts around the world were fuelled by exploration of natural resources." Conflicts arise for a number of reasons - control over the resource itself, the depleted economy that results from the destruction of land, the displacement of indigenous people, the lack of transparency in government spending, human rights abuses, child labour, exploitation... am I depressing anyone yet?

Whereas one would expect that a country lucky enough to house such valuable natural resource would be just as lucky as to reap the rewards of said resource, unfortunately this is rarely the case - even for countries outside of Africa. As it turns out, most oil producing countries see a decline in their living standards even as their GDP sky rockets. What is more, countries sitting on oil rarely see a decline in their country's oil and gas based products like fuel for cars and cooking. This is because these countries often do not have the technological or financial capacity to refine the oil themselves in which case they must outsource this job to foreign corporation. Once the oil is refined by a third party, it is subject to the prices set by the global market.

Unfortunately the financial rewards of oil and other commodities are usually seen only by corrupt government officials and the foreign corporations contracted to extract the oil. Rarely does the general population see the oft-promised increase in spending on health and education or the influx of jobs on the labour market.

One of the tenets of oil optimists here in Ghana that Dr. Akosua was quick to refute was that of mass job creation. Sure a ton of jobs will open up, but who exactly will be filling these positions? If other African countries are any example, many of the jobs created will be filled by foreigners as they will be the only ones with the necessary qualifications and credentials.

Okay, so Ghanaians may not get the higher-paying positions and may not get as many jobs as initially thought - but what about the surrounding economy in the oil and gas towns? Surely the local markets, restaurants and other enterprises will benefit from an influx of foreigners and newly-employed Ghanaians? Well, perhaps. But Dr. Akosua warns that the influx of foreigners (particularly western foreigners) often leads to gentrification of the area. European expats, homesick for their creature comforts, tend to forgo the wooden stand at the side of the road for a drive to the nearest western-style grocery store where they can load up on overpriced imports from home (I found a box of Corn Flakes the other day for 8$ Can.!!). When the demand for these shopping centres becomes high enough, a savvy entrepreneur will eventually takes the leap and open a "Shoprite" or "Max Mart" in the mining or oil town whose economy was once fuelled solely by agriculture.

Dr. Akosua also reminded us that the jobs created are almost exclusively filled by men, thus turning oil towns into a haven for lonely single men (or married men who left their families to take up a job). This often leads to an increase in commercial sex work, rape and violence against women which then leads to increased rates of HIV/AIDS and other diseases.

The list of potential problems that oil can bring is quite numerous and daunting. Too numerous to go through all of them here. The committee at NETRIGHT was adamant about educating and preparing the communities that will be the most impacted by the extraction of oil for the potential problems coming their way. Many of these communities are already quite poor with low levels of education and poorer health as compared to the rest of Ghana. Their livelihoods are inextricably linked to the land and sea - many of them are farmers and fisherman. Oil and gas extraction will have grave consequences on the ecosystem in these areas if the government does not do everything in its power to perform the extraction carefully.

The meeting left us with a better sense of what Ghana will have to deal with, and there are definitely many likeminded groups lobbying the government to do this oil thing right. However, upon leaving the meeting, my supervisor gave voice to what I believe was the general consensus in the room: "I wish they would just leave that stuff in the ground."