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Page added on July 30, 2007

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Ghana enters oil age with wary eye on neighbours

For years the question has puzzled Ghanaians: surely, in a region awash with oil, their country had some black gold of its own? Last month they got their answer. Ghana does have oil, and lots of it.

Tullow Oil, a UK-listed company, announced in June it had found up to 600m barrels of oil in the deep waters off Cape Three Point. If the results are proven – exploration companies believe the estimates may be conservative – Ghana will join the swelling ranks of African oil producers, netting billions of pounds over the next decade or two.
But as the euphoria dies down, people are debating whether oil is really the economic injection their country needs. After all, the other countries along the Gulf of Guinea that have discovered significant deposits – from Angola to Equatorial Guinea and the Democratic Republic of the Congo – have sunk rather than flown. And Ghanaians need only travel a few hundred miles east to discover why oil is considered a curse in Africa rather than a godsend.

“Nigeria has oil in abundance, yet the local people have nothing,” said George Moore, a 29-year-old restaurant worker in Axim, a fishing village near Cape Three Point. “Is that what is going to happen here?”

Others say Ghana’s economy, which relies mainly on gold, timber, cocoa and a budding IT sector, is already doing well without the easy money that oil will provide. Since the near collapse of the economy in the 1980s, economic growth in Ghana has averaged about 5%, climbing to 6% in each of the past three years.

Poverty levels have dropped from 52% in 1990 to 29% today, according to the World Bank, making Ghana one of the few African countries on track for the main Millennium Development Goal of halving poverty by 2015. Compare that to Gabon, which has been pumping hundreds of thousands of barrels of oil a day for more than 30 years and where two-thirds of the population still lives on less than a dollar a day.

“Our country works, but the idea of us producing oil still scares me,” said Kofi Bentil, a business lecturer at Ashesi University in Accra. “It will totally change the structure of the economy. It could push us into overdrive, but it could also lead us to self-destruct.”


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