Ghana Takes Strides to Localize its Petroleum Industry

John Atta Mills, former president of Ghana, turns on a valve at the Jubilee offshore oil fields.

John Atta Mills, former president of Ghana, turns on a valve at the Jubilee offshore oil fields.

The discovery of vast oil reserves in Ghana in 2007 and the beginning of commercial production by Tullow Oil in 2010 have provided a significant boost to the nation’s economy and opened up a host of new opportunities for both domestic growth and foreign investment.

 

Floating storage production storage vessel the Kwame Nkrumah

A Tullow oil rig in the offshore Jubilee oil field.

 

Many have posited that Ghana is better-positioned than other oil-wealthy nations to manage their petroleum resources well because they do not rely on oil exclusively for national income. The newly discovered oil reserves are significant, but the revenue they generated still only represented 6% of GDP in 2010, as Ghana also earns significant portions of GDP from gold and cocoa production.

There is a potential for thousands of new jobs within the industry, but previously, many had gone to foreigners. To remedy this, the Petroleum Regulation on Local Content and Participation was entered into force on February 1st, 2014.  Under this new legislation, Ghanaian companies must have a 5% stake or higher in every contract with foreign investors, and Ghanaian businesses are given priority in applications for petroleum licenses. Foreign investors will also need to use predominantly local resources and services for all of their operations. The legislation also includes provisions requiring companies to invest in research and programs to facilitate technology transfer and foster greater local capacity for industrial development.      The country experienced an unprecedented 13.4% growth rate in 2011, but greater local participation in the industry would mean that this growth directly impacts more Ghanaian citizens rather than foreign investors. This bill is the first step in a long-range program to transition to predominantly local participation in and administration of the industry, with an ultimate goal of 90% Ghanaian participation by 2020.

 

A man fill a truck with diesel fuel at a gas station in Accra, Ghana

 

However, in order for this to be a smooth and successful transition, comprehensive capacity-building and human resource development strategies must also be initiated, as local industry expertise remains in short supply. Currently, many Ghanaian firms related to different stages in the petroleum production industry are small, and most of them tend to specialize in on-shore services. A few capacity-building plans that have been suggested are for international contractors to subcontract more tasks to local firms, and for small, highly specialized firms to join forces to be able to take on larger jobs.

Potential problems include government corruption, appropriation of resources for sale on the black market, and several negative impacts on fisheries–from pollution at drilling sites, sound pollution that drives fish away, and a danger to fishermen when nets or boats are pulled under near drills. However, steps are being taken to address these issues at both the grassroots and the governmental levels, and Ghana is optimistic that this localization of the petroleum industry will translate into an economic boost that will have a positive impact on many in the country.

 

 

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Ghana Celebrates its 57th Birthday

Fifty-seven years ago today, on March 6th, 1957, Ghana became the first sub-Saharan African country to gain independence from colonial rule. Dr. Kwame Nkrumah, later hailed as “Osagyefo,” or “redeemer” in the Ghanaian Akan language, was released from a jail term for anti-colonial civil disobedience to accept his election to form a new government in February of 1951. He became prime minister of the new government the following March, and five years later in 1957, he declared Ghana’s independence from the United Kingdom.

Dr. Kwame Nkrumah

Dr. Kwame Nrumah with Rev. Dr. Martin Luther King, Jr. in Accra, Ghana

Ghana has made great strides as a nation in the fifty-seven years since ’57.  Business and industry are on the rise, driven by Ghana’s growing dynamic community of entrepreneurs, including partnerships such as the Ghana Association of Women Entrepreneurs (GAWE), as well as programs like Ghana’s Next Young Entrepreneur (GYNE) which promote entrepreneurship in the new generation.

 

Makola Market in Accra, Ghana

Ghana has also made significant progress toward the Millenium Development Goal of eradicating poverty and hunger, becoming the first African nation to cut the number of people living in extreme poverty almost in half in 2006. Ghana has been hailed as one of Africa’s “shining stars of democracy.” Much progress has been made in the country in terms of human rights, as demonstrated by the strong and vibrant civil society that has grown steadily over the years, addressing social issues ranging from education to women’s rights to rural poverty.

Although the nation still has many challenges to overcome, they have come far and made impressive strides in  economic, democratic, and social development since gaining independence in 1957. Happy Ghanaian Independence Day!

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A Possible Solution to the Water Crisis in Ghana?

Ghana has been facing problems with lack of clean water for years. In the Northern region of the country, around half of the population living there does not have access to clean and safer drinking water. Many times, the most viable water source is a man-made trench that fills up during the rainy seasons. However, these trenches quickly become contaminated with waste, and the water is unfit to be ingested. On a university trip, a group of students from MIT travelled to Ghana to try to better understand the problem and hopefully come up with some solutions. They began a program called Community Water Solutions.

This program was designed to teach Ghanaian women- they are traditionally the ones in charge of finding drinking water- about safe ways to treat water. The students had discovered that just a few miles away from many of the small villages, there were cities that offered equipment to treat water. Unfortunately, the women of these smaller villages were completely unaware of this. The program was able to connect the women in the more rural areas to the treatment equipment from the cities. This program trained a few chosen women, who treated the water and were able to make a business out of selling the clean water.

After a few years, the results of the Community Water Solutions program are clear. It has created a new entrepreneurship business for women, while at the same time providing clean water for thousands of people. This program has inspired many other similar programs to appear around the country, and is said to have provided drinking water for over 30,000 people in Ghana.

Source: http://www.technologyreview.com/article/520186/ghanas-water-women/

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Ghanaian Government Cracks Down on Illegal Mining

A recent wave of arrests has marked an increased effort by the Ghanaian government to clamp down on foreign illegal mining. Pressure by local artisan miners, who feel threatened by the scale and veracity of the predominantly Chinese operations, together with increased concerns over the environmental effects of their mining practices have led government officials to order detentions of foreign workers throughout the country.

Ghanaian Police forces have arrested a total of 161 Chinese citizens, many of whom crossed borders from neighboring countries in order to bypass immigration authorities. The arrests were focused in the Ashanti region, long known for its rich gold deposits. The region has been mined for decades by local artisans with very little equipment and traditional, low impact methods. The arrival of the Chinese, however, has marked a shift towards medium scale operations that have a greater impact on the land and local business.

According to the Bank of Ghana, in 2011 the country made 4.9bn from gold exports. The economy as a whole has been growing at one of the fastest paces on the continent (7.9 % in 2012). The arrests, which aim at protecting the interests of the local miners, are creating a bitter dispute  with workers of one of Ghana’s most important trading partners. The Chinese, who are keen on maintaining a privileged trading status with the African country, have already agreed to pay bail and fines for breaking the country’s immigration laws. Authority’s in the Guangxi region, where many of the Chinese workers reside, are currently urging people not to go to Ghana to work in Gold mines.

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Earthmoving equipment at a mine in Africa. Photo: AFP

In general, Chinese authorities are urging Chinese workers to respect the laws of the host country and are determined to work with Ghanaian authorities to settle the issue.

While Chinese officials are keen on maintaining good relations with Ghana, the arrested workers have been more outspoken in regards to the nature of their arrest. Ghanaian policeman have been described raiding camps, mines, hotels and any place where the foreign workers gather. In the opinion of the workers, their methods have not been ‘gentle’. Many of the arrested Chinese citizens have described the process as hastened and in some cases coercive, alleging to stolen cash and stolen car keys.

Nonetheless, the clampdown has earned the Ghanaian government praises from Global Rights, a leading global human rights organization. According to the NGO, Ghana’s recent crackdown on illegal miners, particularly the foreign illegal ones, was a step in the right direction. The Global Rights’ Country Director for West Africa, Mrs. Abiodun Baiyewu said the arrests ” Will create a comprehensive atmosphere for trade and investment in Ghana thereby boosting investor confidence. The VPs will further ensure constant dialogue among extractive host communities, the government, and the mining companies thereby ensuring that the interests of all stakeholders are protected”.

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Wife of Ghana’s Former Leader Disqualified From Elections

The wife of Ghana’s former leader, Jerry Rawlings, has been disqualified from running in the current election.  Ghana’s election commission has stated that Nana Konadu Agyemang Rawlings’ nomination forms were not properly completed.

She had originally wanted to run on the National Democratic Congress (NDC – the party that her husband founded) party’s ticket, but was defeated in a primary election.  She then helped to form a rival party, the National Democratic Party (NDP) on which to run.  There had been much speculation regarding which party the former President, Rawlings would support. Mrs. Rawlings is said to be very upset about her disqualification and is  not offering statements to the press.  Currently, the main opposition candidate is Nana Akufo-Addo of  the New Patriotic Party.

http://www.google.com/hostednews/afp/article/ALeqM5jeFiNkst_AnmsWw0jHEJQSBNBsZw?docId=CNG.6c06c78a766713f7ddf6732486f2d624.1e1

Nana Konadu Agyemang Rawlings

Ghana Improves in Some Business Ratings – Drops in Others

Hannah Tetteh, Trade and Industry Minister

The World Bank recently released its “Ease of Doing Business” Report for 2013, in which Ghana improved in three out of ten areas.  Ghana received good ratings in categories including: getting electricity, resolving insolvency, and extending credit.

Ghana was ranked 5th on the African continent, behind only Botswana, Rwanda, Mauritius, and South Africa.  They are ranked 64th out of all 185 countries for which data is gathered.

Ghana did not rank as well in categories including: starting a business, protecting investors, trading across borders, and the payment of taxes.

Of course, all of these rankings simply refer to the ease of doing business and must be appreciated in a much wider context.  Singapore topped the global ranking with the United States coming in at 4th place.

http://www.dailyguideghana.com/?p=65104

President of Ghana Dies at Age 68

John Evans Atta Mills, the President of Ghana dies after a short illness at the age of 66. This is a sad moment for all Ghanaians, most especially the family of the president.  H.E John Evans Atta Mills came into power in 2009 in a run off election after losing the seat in two consecutive election years (200 and 2004). The president was just months away from a re-election. Ghana is a highly democratic state and one of the most peaceful nations in Africa. We all share the grief of such a legend, a great leader and a mentor. H.E. John Evans Mills was such an intelligent leader who carried on gracefully the peace and stability that Ghanaians enjoyed and boasted off. Our deepest condolences to people of Ghana as they go through such a difficult time. More on the death of the President of Ghana in the link below.

http://rss.cnn.com/rss/cnn_latest.rss