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OIL: “A New Ghanaian Century” or A new century of Corruption

  • SOURCE: | qwesa2big
  • Three years ago Ghanaian officials announced with euphoria the finding of off shore oil and gas in commercial quantities. Indeed, officialdom in Accra has the right to be happy; the oil funds, if well managed, would increase the country’s revenues, reduce Ghana’s dependence on foreign capital, reduce Ghana’s over reliance on agricultural exports, increase the size of the economy, and increase the country’s international leverage. To officials in Accra, 2010 and beyond is almost “the new Ghanaian century.” Many Ghanaians envisage a century of prosperity and hope for all.

    How would “the new Ghanaian century” be different from Nigeria of the 1960s and 70s? Nigeria in the late 1970s and 1980s was like the Europe of today, at least to Ghanaian travelers to that country. Many Ghanaians returned from Nigeria with a lot of goodies. In fact the influx of Ghanaian migration to Nigeria during the same period was largely determined by Nigeria’s economic strength at the time, and oil played a very critical role. Yet, the commodity has since corrupted the Nigerian government, and as a result pitched Nigerians against themselves. Because of oil, many Nigerians are living in poverty, their lands are confiscated from them, and they don’t receive any assistance from the state or the oil companies.

    These Nigerians don’t have the right to protest against their state of affairs. As result as they picked up arms and started fighting against the very people whose responsibility it is to protect them against some of the worse environmental practices of the international oil companies.

    The very existence of the corporate entity called Nigeria is threatened to the extent that certain ethnic groups in Nigeria are systematically and symbolically banned from holding the country’s highest office. Was the oil find good for Nigeria? Your guess is just as right.

    It will not be valid to propose that what is happening in Nigeria and other oil producing African countries will play out in Ghana in the same proportion. The reason is that the international dynamics as well as the periods of discovery are different. But why would Ghana’s oil experience be different from Nigeria’s? There are two schools of thought that attempted to answer this very important question and both argument fall flat on their faces, in view of recent experience. The first group is led by the Castle and some think tank in Accra. It seems both the NPP and NDC administrations have imbibed and sometimes articulated the same argument.

    They contend that Ghana is a democracy, lead by a new group of African leaders who eschew corruption, and with the right legal and institutional framework, it could evolve creative methods of revenue sharing, and environment protection. These, they argue, will eliminated corruption in the sector and thus reduce the tendency for sectarian violence.

    Yet, Ghana will start receiving revenues from the oil export this year, but it does not have, the much talked about frameworks in place. As times pass, and people do not raise any objections, the process get forgotten and the corruption starts.

    Besides, even if Ghana created such a framework, it does not guarantee the system against corruption, insides deals and foreign influence. A case in point is the Ghana Telecom and Vodafone deal. Osei Boateng wrote an excellent piece published in the New Africa Magazine of January this year titled “How the British got Ghana Telecom for Vodafone.” Osei argued that despite the Divestiture Implementation Committee (DIC) and it rules, the British government was able to twist the arms of the Kufour government, forcing the administration to bypass Ghanaian laws and institutions to sell Ghana Telecom to Vodafone.

    Even when Vodafone was out bided by Telekom South Africa and was withdrawn from the competitive process prior.

    “The DIC was elbowed aside by President Kufour and his office in a blatant disregard of the divestiture laws,” Osei wrote.

    The article described the numerous meetings held behind closed doors between President Kufour and British officials. It also explained how the chairman and the secretary of the DIC were dragged to sign a Sale and Purchase Agreement, to totally disguise the involvement of the ruling government in the deal. In opposition, the NDC promised to take a second look at to the Vodafone deal or even abrogate the deal altogether, but the party reneged on this promise after pressure from the head of the Trade and Investment at the Foreign and Commonwealth office in London.

    It seems the new NDC government is not interested in meddling itself in a controversy it did not create. Hence, the NDC started signaling that it is not interested in abrogating the Vodafone deal even if the process with which the company secured the deal stinks.

    Vodafone has come to Ghana to stay, no matter what anyone says, and with time Ghanaians would forget the process with which the company came to the country. Corporations don’t care about process; they care more about their profit margins.

    These kinds of external pressure on African governments to do wrong will happen even more rampant when it comes to oil companies because the stakes are high, and the financial benefit is huge. Ghanaians are yet to see the framework that both governments promised to establish before the oil revenues. But the tendency for official in Accra and elsewhere in the country to be corrupt is always there, regardless of which party is in office. The argument that because Ghana is a democracy, the tendency for corruption in the oil industry will be reduced stands up to neither logic nor historical precedent. In the 1980s several democratic government in oil producing Latin American countries were even more corrupt than undemocratic governments in the same region.

    Besides, the current political and media climate in Ghana is more prone to corruption and back room deals than most would anticipate. The reason is the narrow partisan nature of Ghana politics.

    It is safe to argue that, for now, Ghana is a two party state. Since 1992 no political party, other than the NDC and the NPP, is able to secure more than 10% of votes. Over 80% of Ghana’s voters are loyal supporters of the two leading parties in the country.

    Leaving only about 20% in the middle, about 8 percent of which supports the smaller parties in the country. Ghana is a very partisan country, party allegiances determine which news papers are read, and the kind of friends to hangout. Ghanaians will defend the party they support even if the party position is totally out of line.

    It is therefore very easy for the global oil empire to control the political system in Ghana. Like the Game theory’s Prisoner’s Dilemma, all it has to do is create an artificial dilemma by spending enough money on the two leading parties as to discourage them from defecting and point accusing fingers at the other. It then becomes a disincentive for both parties to campaign on issues detrimental to the corporation’s interest because doing so would mean exposing themselves too. There are countless examples of this scenario for a simple piece to contain.

    The Country’s partisan nature is even more pronounced in the media than anywhere else. Apart from a very few individual media houses in the country, the rest are either pro-NPP or pro-NDC news papers, radio stations, or TV stations. The crack between the pro-NPP and pro-NDC media is so deep that all of them are willing to do whatever it takes to defend their respective parties. A typical example is the Kufour hair salon loan. Even thought all the evidence pointed to the fact that the government made serious mistakes, and as a result the state lost some money. It did not prevent Kwaku Baaku, and the pro-NPP media from projecting the position of the Kufour administration as if it were the only truth. Control the two leading parties in Ghana, and you have the majority of the media under your armpit.

    Ghana’s very loose political party financing laws make this scenario a possibility rather than a remote hypothesis. Parties will always find ways to finance their campaigns. This will provide an opening for the oil corporations to invest and later entrench their power position.

    Corporate control of political process is not a new phenomenon. Even in advanced democracies with a very independent and sophisticated media, corporations have often been able to use its lobbing powers to control certain government agenda. It is very easy for international oil corporations or even foreign governments to control a country’s resources by simply controlling its political players; thus creating a reverse Neocolonialism, a government by the people but for the masters. Democracy, it seems, could turn out to be the very reason why the oil find that has the potential of creating “A new Ghanaian Century,” could as well be a rational for a century of corruption of unimaginable proportions. ….to be continue

    Abdul Sidibe


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