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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Fish Farming to Revitilize Economy and Fight Youth Unemployment in North-Eastern Nigeria

Nigerian Wetland Fishermen

Nigerian Wetland Fishermen

Bauchi, Nigeria – During a workshop organized by the Hadejia/ Jama’re Komadugu Yobe Basin Trust Fund, Dr Hassan Haruna Mbildya, head of the organization, identified fish farming as a way to revamp a stagnating economy and to fight poverty amongst unemployed youths in Nigeria’s Northeastern region.

Dr. Mbildya said “The fishery sector of the economy has a lot of potentials that has not been utilized, that is why the trust fund has brought these participants and consultants together to brainstorm on how to revitalize the regional economy through fishing business”

The workshop organized by Dr. Mbildya’s fund aims at providing knowledge and technical assistance to participants that are interested in updating the industry and creating new employment opportunities for the young and unemployed. The fishing industry currently employs over a million people and the money turnover is significant. Even the smallest markets, like the one in Gadar Maiwa, employ over a hundred workers and realize more than a million naira per week. The Komadugu Yobe river Basin alone, Dr. Mbildya claims, is home to at least a hundred of these markets and the total sector turnover amounts to more than a billion naira. The project to revitalize the industry aims at  increasing the total turnover of the sector, and most importantly, fighting poverty by employing the region’s growing youth.

The workshop organized by the Yobe Basin Trust Fund takes place within a broader regional effort to increase the size and efficiency of the fishing industry. Three West and Central African countries (Nigeria, Cameroon, and Sierra Leone) have already agreed on two three-year fishery and aqua-culture projects starting in January 2012. The projects cost 500,000 US dollars each  and are funded by the West and Central Council for Agricultural Research. Because the sub-sector contributes three percent to regional GDP and is one of the leading export markets, revamp projects like Dr. Mbildya’s workshop are crucial to the future of the regions economy and a vital aspect of the fight against poverty.

Sources: http://allafrica.com/stories/201306131516.html -http://www.google.com/hostednews/afp/article/ALeqM5gzSvBVKbWgBRfqs_EiyX_JF70U2g?docId=CNG.35938e723ad2fcbcb70c6292de0e98b4.571

South Korea and Dubai May Help Curb Malawian Unemployment

Recently, the government of Malawi has been taking active measures to combat the 85% youth unemployment in the nation. The young Economic Planning Minister Ralph Pachalo Jooma and his counterpart form the Trade and Industry Ministry Sosten Gwengwe say that this is one of the initiatives being taken to address this major issue.

The government is advertising job opportunities for Malawian youth in Dubai, and has a plan to send 320 young workers to South Korea for unskilled labor.

Critics argue that this initiative is too little—saying that sending a small population of unskilled labor abroad will not produce any real effect on the country.

Despite the naysayers, youth from all sides of the political divide are gathering together to solve this problem and jumpstart economic development. This congregation is called the Zomba Youth General Assembly, and it is organized by aspiring Member of Parliament for Zomba Central constituency, Joseph Chikwemba, who called it “groundbreaking”.

It will be interesting to see where this initiative will go from here.

See the following link for more information: http://www.nyasatimes.com/2013/04/30/south-korea-dubai-jobs-to-end-malawi-unemployment-ministers-tells-zomba-youth-assembly/