Abstract
Even without oil, we are doing well…with oil as a shot in the arm, we are going to fly…we are going to really zoom…you come back in five years, and you will see that Ghana truly is the African tiger, in economic terms for development…oil is money, and we need money to do the schools, the roads, the hospitals . . . I assure you that if others failed, Ghana will succeed because this is our destiny to set the good pace for where we are. So, we are going to use it well.
The above quote in the book summarized the expectations of the average Ghanaian upon the 2007 announcement of the country as a petroleum rich country. More than a decade after commercial oil discovery, the book explored the experience of Ghana in managing the new oil wealth, in its quest for inclusive economic growth. The book covered the evolution of the regulatory, legal, institutional, fiscal and governance structures of the petroleum industry in Ghana and its economy in the first 10 years after oil discovery. One interesting part of the book I like is that some of the chapters were authored by direct participants in the petroleum industry at the time of the discovery of oil in 2007.
The book is in four parts with eighteen chapters: Part one deals with the regulation and management of Ghana’s upstream oil and gas industry, consisting of Chapters 1–6; Part two focuses on oil and gas in Ghana’s economy, with Chapters 7–11; Chapters 12–15 form the third part, which examines oil and gas governance in Ghana and the lessons learned; and finally, the last part focuses on international perspectives of the petroleum industry and conclusions, consisting of Chapters 16–18.
In the first chapter of the book, Thomas Kojo Stephens and Seyram Dzikunu outline Ghana’s Petroleum Act of 2016 (Act 919). The Act established new rules that govern and regulate the petroleum industry’s exploration and operations, which are well described in the book with the aim of ensuring the smooth operation of Ghana’s oil and gas sector. The existing regulations and legislations described by the authors, if well implemented, will promote allocative efficiency in the Ghana oil industry.
Tsatsu Tsikata, in the second chapter, addresses the role and contributions of the Ghana National Petroleum Corporation (GNPC) in stimulating oil exploration and production activities. The author provided an elaborate discussion of the corporation’s key objectives, and the various successes recorded in the oil and gas exploration activities. The author submits that the GNPC would have performed even better with less interference from the government.
John Agyekum Kufuor, Ghana’s former president (2001–2009), presents in chapter 3 the policies and actions taken by the government of Ghana between 2001 and 2008, which led to the discovery of the country’s first commercial oil well. The former president acknowledges the importance of the policies implemented by his administration as well as other administrations after him in the successes of Ghana’s oil and gas sector so far.
In chapter 4 Kwaku Boateng, one of the pioneer staff of the Petroleum Commission of Ghana, presents firsthand information about the establishment, functions, policies, guidelines, and regulations of the Petroleum Commission, established by the Petroleum Commission Act of 2011 (Act 821) to regulate, and manage the use of petroleum resources in the upstream sector as well as to coordinate policies related to the sector’s activities. Looking at the success so far, the author is convinced that the Petroleum Commission has not derailed in its duty to ensure optimum and efficient exploration in the petroleum industry.
Fui S. Tsikata in chapter 5 describes the tribunal hearing of the maritime boundary dispute between Ghana and Cote D’Ivoire before the International Tribunal of the Law of the Sea. The author, a member of the team in charge of the case, presents in detail the arguments of both parties, the provisional order of the tribunal, among other events that transpired during the hearing including the tribunal’s decision, which was in favor of Ghana.
Pierre Klein in chapter 6 corroborated the point made in the previous chapter on the importance of teamwork and interaction in the management of the maritime boundary dispute between Ghana and Cote D’Ivoire. The teamwork between members of the internal team and external team delivered the success recorded by Ghana in the boundary case.
Theophilus Acheampong and Abdullah Ali-Nakyea in chapter 7 evaluate the fiscal regime of the oil and gas sector of Ghana using cash flow modeling. The authors agree that compared to other regional peers, the fiscal regime is competitive. Joseph Kwadwo Asenso and Ishmael Ackah examine the importance of fiscal policies in managing the resource curse phenomenon in chapter 8. They acknowledge that while the Petroleum Revenue Management Act of 2011 ranks well with respect to transparency and accountability, it is insufficient to overcome the resource curse. They argue that the oil revenue should be linked to formal economic plans, while unsustainable borrowings and high interest payments should be discouraged.
Chapter 9, written by Seth E. Terkper, reviews how petroleum revenue is managed, placing special emphasis on the function of the Petroleum Revenue Management Agency in assigning and dividing the proceeds from the petroleum industry, to stabilize the budget, save for the future, and invest in developmental projects. The author recommends that Ghana should preserve a substantial amount of heritage funds, with a portion of the interest earned by the government used for investment purposes. This is similar to the role of a sovereign wealth fund in many oil-rich countries.
Austin Dziwornu Ablo and William Otchere-Darko in chapter 10 examine the success and challenges of Ghana’s Local Content Law (LCL). They listed the success of the LCL as increasing employment, business growth, and technology transfer; however, it faces challenges such as a lack of transparency, inaccurate data on contracts, and low level of local employment. There is a need to broaden the LCL achievement beyond the oil industry alone, to include the general economy and the oil value chain.
Benjamin Boakye in chapter 11 focuses on how government policies and actions have aided in optimizing the natural gas sector, as well as the achievements and challenges that impede the growth and development of the gas market after a decade. As part of the accomplishments, the author recognizes the use of gas in power generation and industrial use, as well as a reduction in environmental impacts and a lower and more stable price of gas in comparison to liquid fuels. The chapter identifies three major challenges impeding the growth of the gas market: delay in investment execution, excessive power play or ad hoc political manipulations that undermine established policies and laws, and supply planning and implementation effects. The author recommends the passage of a gas act that will optimize gas resources through investment incentives to produce for both the domestic and export markets.
Ferdinand D. Adadzi, Nana Serwah, Godwin-Amamoo, and Jemima Nunoo provide an overview of the Ghana petroleum sector’s governance regime, discussing its evolution, reforms, and relevance, as well as the efficiency and sustainability of the reforms in chapter 12. The chapter evaluates the institutional structure and the measures put in place to ensure good governance and improve industry performance. The authors listed several challenges facing the petroleum sector in Ghana. They include lack of political consensus, low level of inclusion, poor community relations, corruption, lack of robust law enforcement, and limited capacity among local businesses and entrepreneurs. They recommend a proper diversification strategy to connect the petroleum value chain to other sectors of the economy. These are all typical of challenges of the oil sector in Africa.
Steve Manteaw and Emmanuel Graham in chapter 13 investigate the role of public interest organizations such as Civil Society Organizations, (CSOs) the media, Public Interest and Accountability Committee (PIAC), and Ghana Extractive Industry Transparency Initiative (GHEITI) in improving oil and gas governance in Ghana. The chapter discusses the Public Interest Organizations (PIOs) successes and challenges. The chapter reexamines the resource curse theory and how national consensus on resource governance has contributed to the prevention of resource-centered conflict. The challenges of the PIOs include limited access to information, and inadequate technical knowledge and skills. The authors assert that the importance of these institutions in the oil industry of Ghana cannot be overstated, and therefore call for the government to address the identified challenges to ensure continued transparency and accountability in the governance of the oil and gas sector.
In chapter 14, Jasper Abembia Ayelazuno, and Ishmael Ayanoore expose the social injustice present in Ghana’s oil and gas industry at the national and local level using both quantitative and qualitative data sources. The first injustice and inequalities are between the oil-rich communities, Foreign Oil Companies (FOC), and national oil companies. The second instance of injustice and inequality involves the FOC and the national oil firms. The FOC often enter into contracts that benefit them more than the resource owners. The chapter recommends that higher oil rent shares be pushed forward in future negotiations, that the current fiscal framework be improved to reduce the profits accruing to the international oil companies, and that policies to safeguard the economic, social, and environmental interests of people living in oil-producing nations be implemented.
Chapter 15 written by Kwamina Panford focuses on how oil benefits can be distributed equally and inclusively. The chapter notes that Ghana’s neoliberal approach to oil and gas exports—opening the economy to free trade and investment, especially foreign investment—at the expense of, or complete disregard for local businesses’ participation in capital formation—is not strong enough to support an equitable and inclusive distribution of the oil wealth. The author calls on the government to review its policies regarding the fiscal and non-fiscal regimes for oil exports.
Victoria R. Nalule, Pauline Anaman, and Theophilus Acheampong in chapter 16 examine the implications of the energy transition for the African oil and gas industry, as well as its opportunities and challenges. They presented lessons from regional case studies. The authors outline three opportunities for African nations to advance global transition: reliance on its abundant mineral resources, increase domestic value addition and economic diversification, and the use of alternative energy to bridge the energy access gap.
The second to the last chapter authored by Berryl Claire Asiago and Hope Wanjira Miriti compares the legal and institutional frameworks of a few African nations—Ghana, Kenya, Tanzania, and Uganda—to identify potential management strategies for their natural resources. The chapter reviews the laws governing the management of natural resources. The authors conclude that local content policies must be combined with other tools to ensure an all-inclusive resource management objective.
Thomas Koko Stephens and Theophilus Acheampong conclude the book by summarizing each chapter’s main discussion and recommendations. The final chapter claims that despite the discovery of oil and the notable success in the oil and gas sector of Ghana so far, poverty, inequality, and unemployment still exist in the nation.
The lesson from the book is that the resource curse is a serious issue for oil development in Sub-Saharan Africa. The experiences of Ghana in oil management detailed in the book show that the country has not been able to avoid the resource curse. Ghana has yet to achieve the vision stated in President Kufuor’s quote cited at the beginning of this review. However, the vision is still achievable if the policies recommended in the book are duly implemented.
Overall, this book is a rich compendium for those who are interested in the petroleum industry of Ghana, and for those who would wish to compare the oil sector of Ghana with that of other countries. The book assesses the industry critically whilst providing recommendations that, if followed, will put the oil industry in Ghana on the right path, even in this era of the energy transition. It is a beautifully written book by key actors in the Ghana’s oil industry. The chapters complement each other to provide a broad description of the Ghana’s oil industry, highlighting the achievements made, stating the weaknesses and failures, as well as providing useful recommendations to bend the learning curve. I strongly recommend this book for policymakers and researchers of Africa’s energy sector.