As Ghana begins oil production, Ghanaians worry about 'oil curse'
Although Ghanaians are excited by commercial oil production, there is concern that Ghana isn't prepared to handle oil revenue properly.
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By early 2011, estimates are that Ghana will be producing approximately 120,000 barrels of oil per day. The Jubilee field has 500 million barrels of proven reserves and a potential for over 1 billion barrels. The production rate is expected to supply more than $400 million to the government’s 2011 budget and around $1 billion per year into the country in the early years. Promising indications from adjacent exploration oil wells could mean even higher levels of production and reviews in the next few years.
David Throup of Online Africa Policy Forums Blog points out that:
Ghana urgently needs to improve its infrastructure: it needs new sewers and water pipes and ring-roads in Accra, a revamped electricity grid, improved generating facilities at Akosombo, improved rail-links from Accra to Kumasi and Tamale and on to Burkina Faso, and a renewed and extended network of secondary and tertiary feeder roads through the rural hinterland. Others will argue for improving educational and health facilities. Such development spending would generate employment in construction and ancillary services, and hopefully promote sustained economic activity and growth. In a society where 60-70 percent of the population depends on smallholder agriculture for their livelihoods and 90 percent of the population in urban areas depends on the informal sector, such job-generating spending could be beneficial. But the money must be spent wisely and over a number of years if it is not to exacerbate inflation and exceed Ghana’s capacity to absorb the spending.
In her post, "Let it flow, Let it flow, Let it flow: Oil pumping starts in Ghana today," Abena Serwaa expressed her opinion on what needs to be done.
Despite my skepticism, if we have the right policies in place governing how we handle our oil, we could potentially reap positive benefits from this gift. The question is: do we have policies already in place?
Do you see the first oil as a blessing or a curse to Ghana? Do you think Ghana is fortunate in terms of this first oil? Which areas do you think the oil revenue should be used in developing Ghana? What are your general views on this subject?
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