Oil wealth and the well-being of the subaltern classes in Sub-Saharan Africa: A critical analysis of the resource curse in Ghana
Based on:
Journal Article (2014)
My understanding of development is that it should promote the well being of ordinary people, those at the lower ranks of society. How can Ghana’s oil wealth promote this kind of development?
Brief by:
Content
Bad governance and institutions are viewed widely as the threat to the development prospects of Ghana’s oil wealth. My research demonstrates that good institutions alone will not solve the “resource curse” problem in Africa. It is the dynamics of the capitalist global economy which interact with bad governance to deprive ordinary Africans the benefits of their natural resources. This research shows that the capitalist global economy is ruled by racial capitalism, which is not concerned about the welfare of Africans.
Key findings
Ghana has been exporting natural resources like gold, timber, and cocoa since independence 65 years ago.
This hasn't brought about improvement in the wellbeing of ordinary Ghanaians: poverty is still widespread, the infrastructure is poor, and the country hasn't advanced in terms of industrialization. Ghana is still an underdeveloped country.
Oil in commercial quantities was discovered in Ghana in 2007, and production started in 2010.
There was euphoria about the development prospects of oil, and many Ghanaians hoped that they will benefit from it. However, the history of minerals extraction in Ghana shows that this was a pipe dream.
The foreign companies that have been mining gold in Ghana for decades are only interested in making profits.
The gold is exported raw abroad, leaving Ghana as an exporter of raw materials. The oil companies are doing the same thing, so oil will never improve the wellbeing of ordinary people.
Proposed action
The state of Ghana carries a big responsibility because oil wealth is vested in the President, on behalf of the Ghanaians
The government should also make sure that foreign companies do not just extract the oil and export it to the Western world to be processed, leaving Ghana with only a fraction of the oil wealth that it gets through royalties and taxes
Most importantly, the political class must be less corrupt and have the interests of the people at heart
A special fund for promoting the welfare and development needs of the coastal communities close to the oil industry must be established, and both the government and oil companies should contribute 1% each of their revenues to this fund
If all the above cannot be done, the oil and gas should left buried underneath the ocean, unexploited, and thus spare the people leaving close the industry the environmental pollution and dispossession they suffer
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Acknowledgements
Special thanks to Smaranda Bob for preparation assistance
We would like to extend a special thank you to Smaranda Bob, for their invaluable contribution in assisting the preparation of this research summary.
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Oil wealth and the well-being of the subaltern classes in Sub-Saharan Africa: A critical analysis of the resource curse in Ghana
Cite this brief: Ayelazuno, Jasper Abembia. 'Oil wealth and the well-being of the subaltern classes in Sub-Saharan Africa: A critical analysis of the resource curse in Ghana'. Acume. https://www.acume.org/r/oil-wealth-and-the-well-being-of-the-subaltern-classes-in-sub-saharan-africa-a-critical-analysis-of-the-resource-curse-in-ghana/
Brief created by: Dr Jasper Abembia Ayelazuno | Year brief made: 2023
Original research:
- Ayelazuno, J. A., ‘Oil wealth and the well-being of the subaltern classes in Sub-Saharan Africa: A critical analysis of the resource curse in Ghana’ 40 (pp. 66–73) https://doi.org/10.25676/11124/14104. – https://doi.org/10.1016/j.resourpol.2013.06.009
Research brief:
My understanding of development is that it should promote the well being of ordinary people, those at the lower ranks of society. How can Ghana’s oil wealth promote this kind of development?
Bad governance and institutions are viewed widely as the threat to the development prospects of Ghana’s oil wealth. My research demonstrates that good institutions alone will not solve the “resource curse” problem in Africa. It is the dynamics of the capitalist global economy which interact with bad governance to deprive ordinary Africans the benefits of their natural resources. This research shows that the capitalist global economy is ruled by racial capitalism, which is not concerned about the welfare of Africans.
Findings:
Ghana has been exporting natural resources like gold, timber, and cocoa since independence 65 years ago.
This hasn’t brought about improvement in the wellbeing of ordinary Ghanaians: poverty is still widespread, the infrastructure is poor, and the country hasn’t advanced in terms of industrialization. Ghana is still an underdeveloped country.
Oil in commercial quantities was discovered in Ghana in 2007, and production started in 2010.
There was euphoria about the development prospects of oil, and many Ghanaians hoped that they will benefit from it. However, the history of minerals extraction in Ghana shows that this was a pipe dream.
The foreign companies that have been mining gold in Ghana for decades are only interested in making profits.
The gold is exported raw abroad, leaving Ghana as an exporter of raw materials. The oil companies are doing the same thing, so oil will never improve the wellbeing of ordinary people.
Advice:
The state of Ghana carries a big responsibility because oil wealth is vested in the President, on behalf of the Ghanaians
- This means that the President and the government should manage the oil – from signing contracts, to the oil revenue that they get – in such a way that the welfare of Ghanaians is prioritized.
The government should also make sure that foreign companies do not just extract the oil and export it to the Western world to be processed, leaving Ghana with only a fraction of the oil wealth that it gets through royalties and taxes
- The government must make sure it fully implements its local content policies to ensure that the oil industry is linked to and mutually beneficial to its non-oil sectors. The crude oil should be refined and used to meet the energy needs of Ghanaians and their local industries.
Most importantly, the political class must be less corrupt and have the interests of the people at heart
- As this is not an inherent character quality of most members of the capitalist class, for this to happen, grassroots organizations must be at the front and center of activism, and hold the government and oil companies accountable.
A special fund for promoting the welfare and development needs of the coastal communities close to the oil industry must be established, and both the government and oil companies should contribute 1% each of their revenues to this fund
- It should be managed by people chosen by members of these communities.
If all the above cannot be done, the oil and gas should left buried underneath the ocean, unexploited, and thus spare the people leaving close the industry the environmental pollution and dispossession they suffer
- This will also spare Ghanaians in general the looting and thievery of the oil companies and the Ghanaian political class.