Is Ghana An Oil-Rich Nation Facing Penury?

Precious few Ghanaians are aware that their country sits atop of oil and gas deposits worth some U.S.$160 billions. And at a time when so many of them are experiencing hard times,  one wonders what ordinary people in Ghana would do, were they to discover,  that over a 30-year period, Ghana will receive only a paltry U.S.$20 billions out of those U.S.$ 160 billions -  because their ruling elites signed what are said to be some of the worst oil agreements in modern history.

Incredibly, under that unspeakable abomination of an oil agreement - the royalty/tax system - the  foreign oil companies are investing less than U.S.$10 billions,  to lay their  hands on U.S.$140 billions worth of Ghanaian oil. Unbeknownst to our ruling elites, Tullow Oil was happy to sign a production-sharing agreement with the Canadian oil company, Africa Oil, to work its Kenyan concession - so why don't they  sign one with Ghana too?

The tragedy for our nation, is that we are losing a once-in-a-lifetime opportunity  to improve  and expand our infrastructure from our own resources, because a few clever individuals deliberately signed agreements that gave away wealth that can transform our nation - and give its citizens one of the highest standards of living in the world. The question we must ponder  is: ultimately, do the ordinary people of Ghana, in whom sovereignty lies, not have the right to repudiate those  inimical agreements that a few greedy and selfish officials signed - because it was in their own interest to do so?

Why should we accept this one-sided outrage, when our nation's circumstances could change dramatically - for the better - if Ghana had a fair share of those U.S.$160 billions? The government of Ghana must persuade the oil companies that it is in their own long-term interest to  accept that the present agreements are untenable - and that they must be replaced with  production sharing agreements in which Ghana gets 70 percent, whiles 30 percent of the proceeds go to the oil companies, whenever  oil is lifted.

If that were the case today, and a production sharing agreement was in place, we would not be  an over-leveraged nation beholden to tightfisted and  canny bankers in China,  but would rather have the wherewithal to transform our nation  into an African equivalent of the egalitarian societies of Scandinavia - blessed with well-equipped hospitals in every district capital; have free education from kindergarten to tertiary level for the younger generations;  have well-designed and well-built housing in well-planned new green cities  that millions of  ordinary people could afford to purchase houses in.

 Were the situation,  in which an oil-rich nation and its citizens face penury,  because a few selfish and greedy individuals signed what are inimical agreements with foreign oil companies, to persist, it could lead to the demise of Ghanaian democracy - and the emergence of a Colonel Gaddafi-type leader: who will tear up those inimical agreements. Under King Idris 1,  Libya's oil deposits benefited the king personally, and the  foreign oil companies: not the Libyan people and their nation.

That is why Gaddafi became a hero to Libyans when he overthrew King Idris in 1969. An African  democracy that fails to produce ordinary citizens' share of the democracy dividend, faces a shaky future - as poverty and democracy do not  make good bedfellows. Our hard-of-hearing and self-seeking ruling elites,  who take a lot for granted, have failed to grasp this.

Ghanaians - particularly the younger generations - are an aspirational people.

 They want to live as well as the ordinary people of oil-rich nations such as Dubai, Kuwait and Saudi Arabia do. And why not?  It is instructive that all the above-mentioned nations  have service agreements (a 'type' of production sharing agreement in which the foreign oil company does not have an equity stake in the oil and gas deposits,  but is paid for funding and bearing the risk involved in exploration  and production) in place for players in  their oil and gas industries.

One hopes that  the foreign oil companies now busy ripping Ghana off will come to understand that Ghanaians will not remain passive about those one-sided agreements forever - especially as their nation faces penury despite sitting atop of oil and natural gas deposits  worth some U.S.$160 billions. They had better watch out - Solomon Kwawukume's book ("Ghana's Oil and Gas Discoveries: Towards Maximum Benefits")  is reaching many of the younger generations:  and they feel scandalised to learn that their ruling elites foolishly  agreed  to give away their birthright in opaque transactions, without consulting the people of Ghana.  A word to the wise...