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New Trends in Ghana’s Oil Printer friendly page Print This
By Mateo Pimentel, Axis of Logic
Axis of Logic exclusive
Thursday, Jun 5, 2014

After working in many eager nations with diverse economies, Jose-Pablo Buerba, a professional political economist from Mexico City, emphasizes a general hypersensitivity to geographic location. Buerba consults with manifold heads of state and ruling political authorities, working closely with Ghana. His experience indicates that Ghana, as it rides the cusp of an economic upsurge, is particularly “location-aware.” Moreover, hydrocarbon-rich Ghana is especially cognizant of its geopolitical nexus because of its proximity to Nigeria, a nearby country that exports millions of barrels of oil on a daily basis. 


Despite some shameful amounts of looting, kidnappings, pipeline sabotage, etc., Nigeria continues to grow and to benefit from its already groomed oil production. This has also had an encouraging effect on Ghana, which understands its own potential as a major hydrocarbon producer and supplier. Ghana’s oil amounts to perhaps 7 billion barrels, securing it a spot among the world’s top twenty-five proven oil reserves. Additionally, some reports indicate that Ghana houses several trillion cubic feet of natural gas. These resources and their numbers present quite the emerging market.


Due to its resources, private, rich world oil firms are making their presence in Ghana known. They represent an added variable for Ghanaians and the future of their economy. Said firms obviously want to explore ways in which they might induce and usher in the exploitation of potentially large quantities of oil and gas stores. They are also on site so that they can be the first in line to put in bids for government contracts. Buerba suggests that one major obstacle, which nations in Ghana’s position face, is the financial accountability vis-à-vis government contracts with private firms. Ghanaians need to take good care to see that the decisions their government makes favors their long-term economic growth—not simply the profit of foreign firms.   


One Ghanaian economic advisor, Dr. Derrick Owusu-Ampofo, pleaded a year ago that the government reserve approving proposals to privatize the Ghana Oil Company—a completely state-owned company. In a 2013 article published on, Owusu-Ampofo signaled that foreign multinationals control the “upstream sector” in the oil industry. He claimed it would be very problematic for Ghanaians to therefore “hand over the downstream.” He also implored that Ghanaians seek to co-operate the economy by actively controlling strategic investments, citing that the “retail sector must be protected for the indigenous people…” Owusu-Ampofo then closed by railing against foreign interest: “If God has blessed us with one cash cow, we must keep all of it at home…!”


The critical awareness that Ghana has about its oil, gas and location bespeaks another important element of international relations, politics and current trends in economic development. After witnessing the growth and economic boom that can give rise to a city like Lagos, in Nigeria, it becomes very clear to a country like Ghana that petroleum, and the production of its feedstock, can support one of the world’s fastest growing cities, driving the economy seemingly skyward for a time. What ensues may seem to be a mad rush to advance the exploitation and extraction of petroleum, while it is still so highly commodifiable and valuable to US consumers. Of course, it is no secret that this drive can also make for easy entry with many multinational oil companies, especially in countries whose governments may relax laws and undergo great deregulation in order to seem friendly and inviting to foreign firms. After all, they have supplies that they envision competing globally in order to meet growing demands.


Something must be said of the oil multinationals like the ones in Ghana, which often promise to help countries capitalize on their natural resources by facilitating extractions, or by proffering partnerships. While some businesses report compliance with the promises made to many international governments, helping them to extract oil and refine it, there is always the risk of the unexpected consequences which have the power to alter the very politics of a country outside democratic mechanisms already in place. Private firms, it is understood, obey profit, but not necessarily the wellbeing of a nation and its people.


Buerba admits that Ghana can hope to eventually compete with a petroleum power like Nigeria. By selling its oil competitively, and thereby experiencing an increase in wealth spread across a much smaller population than that of Nigeria, Ghana may seriously alter its economic landscape. It could be very empowering; distributing wealth in such a way as to elevate per capita purchasing power parity (PPP) and its nominal gross domestic product would greatly benefit Ghanaians and their economy. Still, the choice to privatize presents Ghana and its people with quite the hurdle, not to mention securing its reserves from the kinds of problems that surround Nigerian oil extraction and manufacture.



Mateo Pimentel lives on the Mexican-US border, writing for many alternative political newsletters and Web sites. Much of his work can be found on Axis of Logic, CounterPunch and Dissident Voice.

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