Ghana aims to avoid the 'oil curse'
President John Kufuor says he will put safeguards in place to ensure that newly discovered oil reserves will not be mismanaged.
from the August 6, 2007 edition
Page 3 of 3
Mr. Shaxson says other countries have tried to use a similar safeguard known as an oil fund to keep the money outside their borders in order to prevent misuse. That works better in theory than in practice, he says, because it creates a tempting pot of money for corrupt politicians.
His advice is simple: "Cancel the oil development or delay it so that production starts up very slowly."
That way, Shaxson says, there will not be a sudden inflow of money to distort the country's politics and to turn people's hopes into despair.
Ghana has a few things going for it
Several factors may help Ghana avoid the oil curse, analysts say.
The first is the quantity of Ghana's discovery: if the forecast of up to 600 million barrels is accurate, then those reserves are a fraction of Nigeria's 35 billion barrels and Angola's 10 to 12 billion barrels.
It is arguably small enough to prevent oil from getting too tight a grip on the economy, which would lead it, Shaxson says, to overpower other sectors of the economy, causing them to wither away.
What also favors the country is its sense of national unity, often missing in its regional neighbors who have been blighted by civil wars.
Kojo Pumpuni Asante of the Center for Democratic Development, a local think-tank, says ethnicity here is not as deeply ingrained or divisive as it is in countries like Nigeria or Rwanda.
This relative unity can be a bulwark against what Shaxson describes as the erosion of a shared sense of nationhood that often occurs after an oil discovery, leading to factional politics where officials scramble to line their own pockets and share the spoils only with cronies within their own ethnic group.
Hammond exudes optimism that Ghana will not succumb to the oil curse.
"It shouldn't be difficult," he says, "knowing where the money is sitting and knowing that the money is judiciously dispersed for the development of the country."
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