Africas natural resources and underdevelopment how ghanas petroleum can create sustainable economic prosperity

This was, in particular, the case with sections on policies to place Ghana on the right path to ensure that its petroleum resources yield widespread and optimum economic prosperity to av

AFRICA’S NATURAL RESOURCES AND UNDERDEVELOPMENT

How Ghana’s Petroleum Can Create Sustainable Economic Prosperity

KWAMINA PANFORD

Africa’s Natural Resources and

Underdevelopment How Ghana’s Petroleum Can Create Sustainable

Economic Prosperity

ISBN 978-1-137-54071-3 ISBN 978-1-137-54072-0 (eBook)

DOI 10.1057/978-1-137-54072-0

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Northeastern University

Boston, Massachusetts, USA

Coast and Nyamoransa (Ghana) led by Double Knight Sir Nana Kodwo Panford, Obaa Panyin Efua Atta Abokoma Panford and John Graves Panford; to the memory of Madam Kate Bampoe of Elmina and Koforidua and Auntie Maggie of Cape Coast and to my wife, Naana Panford, and

my grown-up daughters, Araba and Esi Panford.

As most of the readers of this book will know, the academic enterprise

is never the effort of a sole individual Although this book is single authored, its main theme, the need to manage Ghana/Africa’s natural resources well, itself required me to collaborate with many colleagues both within and outside of Ghana and the US. I utilized the theoretical and practical insights of several colleagues who were so generous in many respects

This book is the culmination of a journey which started at the Institute for Development Studies (IDS), University of Cape Coast (UCC) in 2009 I joined researchers embarking on an exciting jour-ney: documenting socio-economic, political, and physical conditions in Ghana’s six oil districts before commercial oil production commenced

In 2011–2012, I returned to IDS as a Senior Fulbright Scholar to conduct additional oil-related fieldwork in Cape Coast, Accra, Tema, and Sekondi–Takoradi, Ghana’s emerging oil hub I continued this research until June 2015, when I moved to the Sociology Department, University of Ghana, Legon as a Carnegie-University of Ghana Fellow Thus, I am grateful to the US Fulbright Scholar Program, the Carnegie Corporation, and the University of Ghana Diaspora Program; col-leagues at IDS/UCC; the Sociology Department, Legon and Ghana Government Ministries/Departments and agencies that provided crucial institutional context and support to allow me to observe first-hand and also participate in phenomena linked to Ghana’s budding oil and gas industry Important among such unique opportunities was

Preface

my participation in drafting Ghana’s petroleum revenue management and local content (local employment, the use of local supplies, and the involvement of Ghanaian businesses) laws, policies, and practices I had many more privileges to be actively engaged in Ghana’s unfolding oil scene.

In February 2012, I led the team of consultants that wrote one of the few reports (Public Interest and Accountability Committee (PIAC’s) Report of 2011  in which Ghana declared data/information on how much oil was produced, income earned, and how the incomes were being utilized This report could be one of the first, if not the first, in all

of Africa and a rarity in other parts of the world despite the global push for transparency in the oil business As the Lead Technical Consultant,

I obtained from the Bank of Ghana data such as the price which Ghana received for its crude oil and the exact types of investments made with the nation’s petroleum funds The Ghana Trades Union Congress (TUC) furnished me with avenues to learn and apply new expertise I addressed the TUC’s Executive Board, and participated in educating workers about international oil intrigue while I completed an inventory

of oil skills and training in Ghana as at 2012 This study was sponsored

by the Ghana TUC and Norway’s LO. I then spearheaded the crafting

of the TUC’s Oil Policy Paper of May 2012 This paper is expected

to guide Ghana’s main labor federation in its deliberations, programs, activities, and policies relating to oil I even dialogued with the Ghana National Catholic Bishops’ Conference at Takoradi on 8 November

2011 to allow me to gauge the extent of civic knowledge, commitment, and participation as one of many crucial elements for insuring success-ful use of Ghana’s newly-found oil At UCC, from 2009 to 2014, I had

a unique practical experience that informed my approach to the roles

of Ghanaian tertiary institutions in the proper management of oil and other natural resources in this book As a key resource person, I literally sat at the table at which Ghana’s first public university- affiliated oil and gas studies institute was created: the Oil and Gas Studies Institute at UCC. To cap my activities at UCC, the Vice Chancellor and University Libraries invited me to present my research on Ghana’s oil to launch UCC’s Oil and Gas Studies Institute I rely on some of these and other real-life experiences, especially academic exchanges on controversial issues such as whether or not there is, in fact, a resource curse in Africa

to write this book This was, in particular, the case with sections on policies to place Ghana on the right path to ensure that its petroleum resources yield widespread and optimum economic prosperity to avoid disasters that have been created in other African countries such as the four discussed in this book—Nigeria, Equatorial Guinea, Angola and

Many of my students and colleagues at Northeastern University, UCC, and the University of Ghana encouraged me to finish this book while some helped with word processing and research assistance To my young scholars, I say thank you While writing this book, I experienced

a serious leg injury Thus, I would also like to thank the orthopedic and physio teams at Beth Israel Deaconess Hospital and ATI Physical Therapy, Boston for making it possible for me to finish this book under such daunt-ing circumstances

Since this book is about implementing the right public policies and practices in Ghana, the rest of Africa and even the developing world with respect to natural resources and oil in particular, and to create more economic prosperity, I acknowledge the achievements of pre-mier Ghanaian/African nationalists and Pan-Africanists whose lives and achievements made it possible for me as a child in post-colonial Africa

to use publicly funded education and training to acquire the edge and experience to generate the public policies proposed in this book Foremost among these figures are: Tweneboa Kodua; Paa Grant; Kobina Sakyi; Kwame Nkrumah; Casely Hayford; Nana Kwamena Ansah; Yaa Asantewa; Nana Agyemang Prempeh I; J. R Asiedu; Ako Adjei; Kwegyir Aggrey; Joe Fio- Meyer and John Tettegah of Ghana; Nnamdi Azikiwe of Nigeria; Patrice Lumumba of DR Congo; Chief Lobengula of Zimbabwe/South Africa; Marcus Garvey of Jamaica; Sylvester Williams of Trinidad; King Chaka of South Africa and WEB Dubois of the US. Besides their commitment to their citizens’ welfare,

knowl-these and numerous others inspired and fought for Africa’s liberation and taught me two valuable lessons:

1 Africa today is stuck in the rut because most, if not all, contemporary

leaders have stopped caring for their citizens and

2 They give the hope that Africans too, with perseverance, diligence and

careful and smart planning, can deploy their vast natural resources, including petroleum, to generate shared economic and social prosperity.

Kwamina PanfordBoston, MADecember 2016

ACEP Africa Center for Energy Policy

AGA AngloGold Ashanti

AGC Ashanti Goldfields Corporation

AIP American Petroleum Institute

Bod Barrels of Oil Daily

BoG Bank of Ghana

CEPA Centre for Policy Analysis

CIDA Canadian International Development Agency

CNG Compressed Natural Gas

CPP Convention People’s Party

CRI Cocoa Research Institute

CSIR Council for Scientific and Industrial Research

DFID Department for International Development (UK)

EAC East African Economic Community

ECOWAS Economic Community of West African States

EIU Economic Intelligence Unit

EPA Environmental Protection Agency

ERP Economic Recovery Program

EU European Union

FDI Foreign Direct Investment

FTSE Financial Times Stock Exchange

GDP Gross Domestic Product

GGC Ghana Gas Company

GH TUC Ghana Trades Union Congress

GIHOC Ghana Industrial Holding Corporation

List of abbreviations

GIZ (GSFIO) German Society for International CooperationGNGC Ghana National Gas Company

GNPC Ghana National Petroleum Corporation

GRA Ghana Revenue Authority

GSE Ghana Stock Exchange

GSS Ghana Statistical Service

IAB Investment Advisory Board

IDS Institute for Development Studies

IEA International Energy Agency

IFC International Finance Corporation

IFI International Financial Institution

IMF International Monetary Fund

ISSER Institute for Statistical, Social and Economic ResearchKNUST Kwame Nkrumah University of Science and TechnologyLPG Liquefied Petroleum Gas

MNC Multinational Companies

MNC Multinational Corporation

MNOCS Multinational Oil Companies

MOE Ministry of Environment

MOFEP Ministry of Finance and Economy Planning

NDC National Democratic Congress

NDPC National Development Planning Commission

NOC National Oil Company

NPP New Patriotic Party

NYSE New York Stock Exchange

OG Oil and Gas

PIAC Public Interest and Accountability Committee

PNDC Provisional National Defense Council

PNDCL Provisional National Defense Council Law

POB Personnel on Board

PRMA Petroleum Revenue Management Act

PSDI Petroleum Skill Development Institute

R&D Research and Development

SAP Structural Adjustment Programs

SHE Safety Health and Environment

SME Small and Medium Sized Enterprise

SOE State-Owned Enterprise

SSA Sub-Saharan Africa

TUC Trade Union Congress

UCC University of Cape Coast

USAID United States Agency for International DevelopmentVAT Value Added Tax

VRA Volta River Authority

WB World Bank

WTI West Texas Intermediate

1 Introduction 1

2 The Paradox of Africa’s Natural Resource Wealth 13

3 Can Natural Resource-Related Social and Economic

Maladies Be Avoided in Africa? 33

4 Ghana’s Petroleum: Will the Myth of Ghanaian

Exceptionalism in Africa Be Sustained or Broken? 75

5 Petroleum Production Challenges in Ghana 121

6 Actual and Potential Conflicts Off- and Onshore in

Ghana’s Oil-Producing Region 145

7 Policies for High-Value Contributions of Africa’s

Resources to Sustainable Development 161

contents

8 Summary and Conclusion 193 Bibliography 205 Articles 209 Index 233

Ghana’s discovery in June 20071 of one of the most important reservoirs

of both crude oil and associated gas has created a new and formidable potential hornet’s nest comprising political, economic, social and even governance challenges State officials, public policy makers, practitioners, academic leaders and indeed the Ghanaian public need to take these issues serious and, as it were, nip them in the bud before their detrimental effects spiral beyond control These challenges are pressing because of rising expectations and excitement among Ghanaians who believe the country has struck it rich by hitting a jackpot of “black gold” that will mean more jobs, higher incomes and overall better quality of life The high sense of

euphoria is succinctly described by Chuck Neubauer of the Washington

Times: “… Ghana … hit the mother load—a vast reservoir of oil.… The

extraordinary find was among West Africa’s largest, promising to make a fortune for Ghana … and flaming the possibility of turning the famous Gold Coast into a multimillion-barrel spigot of black gold.”2

Many observers, including Ghanaians, have, however, expressed ervations like the Venezuelan Oil Minister, Alphoso about escaping the proverbial “resource curse” that emanates from oil, minerals, and other plentiful natural resources This famous Venezuelan minister, after being exasperated by the failure of the black gold to deliver on its promise of unlimited development, referred to it as “the devil’s excrement” (Ross 1999) Ghanaians are apprehensive about the negative socio-economic

res-and political outcomes afflicting their African neighbors—Nigeria, Angola, Democratic Republic of Congo (DR Congo), Equatorial Guinea and many others.

The resource curse and its purported related phenomena (although, upon closer examination, may be revealed to have deeper historical roots such as colonialism, the role and impact of the Cold War, neocolonialism plus neoliberal policies) became popular when Richard Auty (1993) used

it to attempt to explain why mineral-rich countries exhibited strange or counterintuitive characteristics: Third World and mostly African countries with abundant minerals were observed to be not only underdeveloped in terms of economic growth, but were also deemed undemocratic, unstable politically, and associated with civil strife and or high incidence and inten-sive violence

This book therefore,  deals with  how Ghana,  one of Africa’s est producers of crude oil and gas (OG) is managing these popular and controversial natural resources which collectively are called petroleum or hydrocarbons It also addresses whether or not the resource curse and its associated theories and phenomena such as the “Dutch disease,” the paradox of plenty, the enclave effect; the lack of democracy and rising political instability, or even violence, are responsible for the dearth of eco-nomic growth and development, as purported by Auty (1993) and other protagonists of the resource curse theory Opponents of resource curse orthodoxy—Hill (2006), Rodney (1982) and Wallerstein (1967)—take the position that resource curse theories need to be placed in their proper historical contexts That for example, the European colonization of Africa (1870s–1960s) and dependence on the export of raw commodities lead

new-to what Hill refers new-to as “the commodity trap.” Hill alludes new-to the notion

that the export of cheap, unprocessed raw materials per se is one of many

root causes of the poverty in developing nations including those in Africa.This book identifies two more crucial factors to explain the existence

of the resource curse if it happens in Africa: The differential roles and impact of the Cold War and neoliberal economic packages in Africa that  contrast with the experience of South East Asia This study shows that whereas in South East Asia, typically, South Korea, Singapore, Taiwan and Malaysia, as a result of the Cold War, the US, in particular, and other western industrial nations supported economic growth, and hence devel-opment, through deliberate policies to counter communism, in Africa, the situation was contrary to what occurred in the successful nations of Asia For instance, aside from horrible and extremely exploitative Belgian

rule, Cold War-induced political instability and decades of civil war plus political machinations stirred up by the US, Belgium, France and the UK contributed to the Democratic Republic of the Congo (DR Congo) being one of the least developed nations in spite of immense natural resources with both commercial and military uses—cobalt, uranium, gold, copper, and diamonds Uranium from the Congo was used in the bombs that the

US dropped over Japan in World War II (Cohen 2003, 1)

This book assesses whether or not the proverbial resource curse and related phenomena are applicable or not to Ghana and, if not, then how will the “exceptional Ghana” case be explained Ghana is selected for three main reasons among many:

1 Two past presidents, John Agyekum Kuffour (ruled 2001–2009) and his successor, John Evans-Atta-Mills (ruled 2009–2012), liter-ally vowed to ensure that the nation’s oil benefits the citizens rather than becoming a curse.3

2 Prior to commercial oil discovery in June 2007, Ghanaian leaders and international donors, primarily the International Monetary Fund (IMF), the World Bank (WB), the US Government and the

US Agency for International Development (US AID), the British, French, Japanese, Canadian, Australian and German governments, together with their international development partners, constituted

a single bandwagon that continuously sings the praises of Ghana even when conditions in the nation deteriorate Kelsall (2013, 74) summarizes accolades the international community heaped on Ghana for being deemed exceptional:

It has been growing quiet rapidly over the past decade, poverty reduction has been strong and in 2011 the Overseas Development Institute hailed it as

a developmental “star performer” (Overseas Development Institute 2011)4

1 Ghana is highly esteemed in international circles because it is deemed:

(a) One of West Africa/Africa’s leading nations transitioning to democracy;5

(b) A stable and peaceful country in a region gripped by conflicts and long civil wars;

(c) A highly successful economically adjusting nation, one of the IMF and World Bank’s model successful nations in Africa and the rest of the world;6 and

(d) Ghana, since it became a commercial oil producer, seems to

be taking measures that could potentially steer it away from the resource curse, including:

(i) Ghana Extractive Industry Transparency Initiative (GEITI) for which it achieved compliance on 19 October 2010 This initiative has been extended to oil and gas production and is aimed at transparency

in managing resource revenues(ii) With the passage of Exploration and Production Bill August 4 2016 by the National Parliament, the coun-try has a full slate of pertinent petroleum laws such as local content, revenue management and for the establishment of a Petroleum Commission.7

(iii) Following the passage of important legislation, vital public agencies that oversee petroleum production and revenues and how they are spent including the Public Interest and Accountability Committee (PIAC), the Petroleum Fund’s Investment Advisory Board and the Petroleum Secretariat of the Bank of Ghana (BoG), the nation’s central bank, are all cur-rently in operation

(iv) A Heritage Fund and Stabilization Fund have been created and housed at the BoG’s Petroleum Secretariat

(v) Two times in a year, the PIAC produces reports for the National Parliament and the general public; the BoG and the Ministry for Finance and Economic Planning (MOFEP) publish audited statements cov-ering Ghana’s Petroleum Funds which are submitted

to Parliament and published in two national daily

newspapers—Daily Graphic and Ghanaian Times (Daily Graphic April 24 2015, 56).

Notwithstanding such important provisions, a central theme of this book is evaluating whether and under what conditions the resource curse

and related social ills can emerge in an African country such as Ghana Since Ghana is a new OG producer, my attention is on the kinds of pre-emptive policy measures that are being instituted to manage the following

to make the oil benefit more Ghanaians:

1 The incoming revenue side of OG finances—how much exactly is the state receiving in actuality from petroleum receipts in taxes, fees and stakes (typically carried interest) in oil fields? and

2 Local content which in the OG business deals with the level and types of local employment and incomes and local business involve-ment Included here are two key measures: Management, technical, professional levels Ghanaians are employed at, their incomes, and responsibilities in salient not periphery or auxiliary positions critical

to EDP of OG.  Other important functions are finance and legal where decisions that impact the industry are made Substantial local business participation in all three segments of the industry (espe-cially upstream, followed by mid-stream and downstream) are important means to link the industry with the local and national economies This is essential to avoid the proverbial enclave effect Typically, the absence of vertical or horizontal integration of min-ing, timber logging or oil operations with the abutting community

or the country in which resources are extracted

3 A final and important area deserving full attention is safety, health and environment (SHE) Due to Ghana’s post-1986 disastrous gold and diamond mining8 and timber logging (tantamount to reckless disregard for the social and physical environment) there is the need

to scrutinize environment, safety and health practices and legislation that are expected to govern oil drilling A closely related matter is how the environmental impact of oil production may diminish or threaten the livelihoods of fishing and farming communities in Ghana’s 6 Oil Districts in the Western Region where Ghana’s pre-mier oil field Jubilee is located9

Even though this book is mostly about Ghana, it also includes the riences of other leading African natural resource producers: Nigeria for OG; Angola, OG and diamond; Equatorial Guinea, OG and DR Congo, copper, diamond, oil and, more recently, coltan I am principally inter-ested in how these countries have fared in either managing or misman-aging natural resources and how relevant (or not) the resource curse

expe-and other perspectives are in explaining their conditions vis-à-vis their enormous resources and the lessons new African hydrocarbon nations—Ghana, Ivory Coast, Sierra Leone, Kenya, Zambia, Tanzania, Mozambique Uganda and Liberia—can apply.

Important questions that drive the research for this book are:

1 Who are the key domestic and international actors and their interests?

2 What are their motives, incentives and positions?

3 How do these motives/interests affect their roles, the production and management of Ghana’s OG? and

4 What are the outcomes in terms of how Africa manages its leum resources using the case of Ghana’s OG and bearing in mind Ghana’s experience in the last six years with petroleum and over 100 years with diamond and gold?

petro-A significant contribution of this book is to study the nexus between natural resources and development in Africa and elsewhere and to raise questions or problematize what is becoming virtually “self-fulfilling proph-esies” by authors who subscribe fully to the resource curse theory (Gelb 1988; Auty 1993; Stevens 2003) This book also provides the foundation for an appropriate vision, or even an alternative roadmap, for new visions, policies, and practices that Ghana and other nations in Africa can use to avoid or reduce the adverse social dimensions of resource extraction One example treated extensively in this book is how Ghana and other resource producers can boost revenues by avoiding the “race to the bottom.” This occurs when nations outbid each other by offering extremely generous leases to multinational enterprises Such practices result in meager state incomes, as has been the cases of gold mining in Ghana and copper in Zambia This is also counter to many analysts’ erroneous assumption that Ghana and other developing nations remain poor because they obtain and  squander large revenues from resources which some dub “financial jack-pots” or excessive rents (Hirschman 1977)

Ghana’s financial receipts since 15 December 2010, when commercial crude production began, show that assumptions about plentiful revenues from corporate taxes do not apply.10 Contrary to earlier projections of incomes, ranging from $1.billion to $1.4 billion annually, these have been incomes paid into the national account at the BoG (MOFEP 2015; BoG 2014):

public policies and practices that work (without seeking to transplant in

toto to Ghana and other African nations other nations’ policies and

prac-tices)11 the author refers to other countries’ relevant experiences to make recommendations which, if adopted to suit local conditions and applied diligently, will assist Africa in its quest to use natural resources for devel-opment to improve work and living conditions for its almost one billion citizens

In addition to the prudent use of oil revenues, some sectors in Ghana/Africa need to be prioritized to speed up development Sectors deserving copious attention with respect to using OG as leverage for complete social and economic restructuring are not confined to education, training, skill

or talent development in conjunction with adding value to raw materials through industrialization This should be done in a manner that assures the safety, health, and wellbeing of the impacted communities while pro-tecting the physical environment from which resources are extracted These policies will work when guided by what this author calls a “smart vision” that guides diligent planning and execution backed by an alliance

of stakeholders interested in training more youth and adult in science, technology, engineering and math (STEM) fields Africans also need to boost their expertise in OG and other natural resources-related finance, accounting, law, social, and earth sciences that will be deployed in socially responsive ways to produce and use petroleum and other resources Here

a major concern is to limit the export of raw resources for little foreign exchange and promote industries that engender high local employment and incomes on a sustainable basis to ensure lasting development in not only the resource-rich parts of countries but also the poorer regions of nations through higher national revenues and value addition These are key to stemming the rising levels of poverty, unemployment, and hopeless-ness among African youth who are seeking to flee the continent through illegal migration—a process which can often have deadly outcomes

This book contrasts the situations of countries like South Korea and Singapore, which used state power and other national assets, including the educated/trained to lead monumental social and economic changes

A case in point is how South Korea in the course of just one tion (1962 to the mid-1980s) rose to become a global economic force producing leading smartphone and television brands like Samsung and

genera-LG (Dzorgbo and Tonah 2014) Similarly, South Korea’s Hyundai poration has manufactured the world’s first commercial fleet of cars using hydrogen fuel cells While most South East Asians experience improved material conditions, Africa is stuck in the rut of poverty preoccupied with vain attempts at implanting western donor-inspired neo-liberal economic policies that, among other factors, depress everyday work and living con-ditions The policies prescribed in this book, used in combination with other measures, may enhance Ghana’s capacity to translate into reality the ideals stated in the 1992 Constitution, the Model Petroleum Agreement (MPA 2000),12 and other sources that  assert that  the people of Ghana are the owners of all natural resources within its borders and waters and hence the legitimate beneficiaries of all such natural endowments, includ-ing petroleum at the Jubilee and all other fields

cor-1.1 Chapters and OrganizatiOn Of BOOk

The Introduction sets the stage for a substantive discussion of major themes covered Chapter 2 deals with a confounding global paradox: Africa is rich in natural resources and yet is plagued by daunting poverty This chapter juxtaposes Africa’s wealth and its poverty to draw contrasts between Africa’s plentiful natural resources and the plight of the major-ity of its estimated one billion people Chapter 3 provides a summary, description, and applicability of the resource curse theory and its associ-ated social maladies to Africa A key objective is to reveal the historical and contemporary factors that make some African states susceptible to

“the resource curse.” The chapter provides an overview of key trends relating to “the resource curse” and developments in major African nat-ural resource producers—Nigeria, Angola, DR Congo and Equatorial Guinea Chapter 4 examines whether or not Ghana’s acclaimed eco-nomic and political success will be a bulwark against the mismanagement

of its newly discovered oil reserves The mostly undesirable experiences with especially 120 years of gold and diamond mining are presented

as a prelude to studying the country’s experience with OG. Chapter 5

depicts current the major hurdles Ghana has to overcome to pave the way to benefit from its newly- found oil Chapter 6 then goes on to deal with the actual and potential oil exploration and production conflicts

in Ghana’s oil-producing region and the community livelihood cations It also highlights what this author alludes to as “a potentially explosive mixture” of land, chieftaincy, petroleum, and corporate social responsibility (CSR) funds Chapter 7 is about policy recommendations, including value addition to raw materials, education, and training aimed

impli-at amassing pertinent science, technology, engineering, and other nical talents plus smart vision and planning as the best antidote to the proverbial resource curse The Summary and Conclusion reiterate the key points in this book, including the non- inevitability of the resource curse and the need for Ghana and other African states to assume a new posture vis-à-vis development That is, forging developmental states willing and able to steer Africa toward well-planned and executed devel-opment plans which use resources such as crude petroleum as socially transformative assets which are not sold cheaply at commodity exchanges located in the case of OG, like the Brent in Europe, and the New York Mercantile Exchange (NYMEX) in the US. Prevailing Ghanaian condi-tions epitomize the kinds of conditions that urgently need to be elimi-nated as a necessary step toward optimum resource use: Ghana’s cocoa

tech-is dried in the sun using manual labor, bagged and shipped to the US, Western Europe, and Japan as unprocessed beans while gigantic tim-ber logs are transported through forests by road to Takoradi and then exported, by sea, without even being cut into pieces of wood to fetch higher prices Mercury and cyanide are used to separate gold from gold-bearing rocks, slightly purified and then sent as gold ore or bars to Switzerland, where they are refined, stored, marketed, and sold (Ayensu

1997, 188) Likewise, not a drop of Jubilee Field or Saltpond crude is refined in Ghana All of it is shipped to international markets in Europe and China (PIAC 2012)

2 “Ghana’s Oil Discovery Sparks Fight,” Daily Guide, 29 March 2010: 17; and “Oil Find: It’s Big,” Daily Graphic, 16 December,

2010: Front Page

3 Samuel Amoako “Ghana Strikes Oil at Last,” Ghanaian Times, 19

June 2007 and John Evans Atta-Mills, “State of Nation Address,” National Parliament, Accra, 2010 President Kuffour is reported to have toasted and declared “Ghana will fly” with its oil find

4 Even JP Morgan, a leading private US investment firm, could not resist praising Ghana (Evans, “Ghana’s Economy Still Robust: Says

CEO of JP Morgan,” Daily Graphic, 2008, 57).

5 As Kelsall (2013, 74) observes: “if anywhere on the continent proves the idea the good governance agenda is working, it is Ghana.” However, as I stress in this book, such descriptions may

be controversial and not capture fully real-life Ghanaian political processes and economic conditions (See Sect 4.1 of this book for details)

6 From May 1983 to present, Ghana has sought to implement IMF and World Bank policies called Economic Recovery Programs (ERP) or Structural Adjustment Programs (SAP) as part of a global revamping of orthodox economic polices known as neoliberalism (Panford 2001; Hutchful 1988)

7 This author reviewed and recommended changes to the draft Petroleum Revenue Management Bill He was also active in help-ing to constitute membership of the PIAC as well as the lead con-sultant who drafted the PIAC’s (2012) first report: http://piacghana.org/2012%20PIAC%20Annual%20Report.pdf He was instrumental in getting the PIAC and the Bank of Ghana (BoG) to publish petroleum income and expenditure reports in the two

national newspapers: Daily Graphic and the Ghanaian Times This

was done with the intention of widely disseminating such reports

to arouse public interest in the management of Ghana’s bon resources

8 Attention should be drawn to not only small scale Ghanaian-owned and Chinese-operated gold mines (“called Galamsey,” “get them for sale” in local dialect; Owusu Ansah 2013), but also industrial- scale operations by giant multinational mining companies (Ayee

et al 2011; Agbesinyale et al 2008; Video “Great African Scandal,” 2007)

9 The six oil districts are: Shama; Sekondi–Takoradi; Ahanta West; Nzema East; Ellembele; and Jomoro.

10 The author’s inquiries (in his capacity as the Lead Technical Consultant) from the BoG’s Treasurer and other sources show that, at most, Ghana has received less than half of the $1.3billion–

$1.4billion that it was expected to earn annually (MOFEP 2015; BoG 2014)

11 Because of differing historical experiences and changing stances, policies recommended should be sensitive to changes A good example is the fact that Norway’s oil-based Heritage Fund grew fast due to high interest rates in the 1980s and 1990s With the global post-2008 economic downturn and 33% of all govern-ment bonds having negative yields (Bartha and Whittal 2016; C1 and Letzing 2016), one should not expect Ghana to earn a lot from its oil-based funds which are invested in European bonds I therefore strongly recommend that Ghana should conduct a cost–benefit analysis of placing funds into low-interest-bearing accounts compared with investing in, for instance, social infrastructure or training the youth for OG jobs now

12 Article 257 (6) of Republic of Ghana, Constitution of 1992 and Section 1 (1) of the recently annulled Petroleum and Exploration Production Law PNDCL 84, 1984 and GNPC Model Petroleum Agreement (MPA 17/8/2000), p. 1

2.1 AfricA’s NAturAl resource WeAlth side

by side With dAuNtiNg Poverty

According to recent studies, Sub-Saharan Africa (SSA) has the highest rates of the poor and working poor and the most precarious employment situation in the world (Chuma 2015, 27) Chuma’s assertion draws atten-tion to how critical economic conditions are in Africa As the direct result

of a post-1980s phenomenon, the steadily rising number of poor workers facing diminishing prospects for well-paid jobs, the International Labour Organization (ILO) applied, for the first time, the concept “informal sec-tor” to Africa beginning with Ghana In spite of the increase in the size

of this sector, its wages, benefits, safety health and other conditions are least desirable It has grown exponentially due mostly to the widespread job destruction arising from a combination of neoliberal economic poli-cies and unprecedented mismanagement, incompetence and corruption (Africa Progress Panel 2013).1 The latter are generated in part by failed African leadership over the past three to four decades (Panford 1994,

1996, 1999; Mkandawire 1988)

This subchapter juxtaposes Africa’s abject poverty, manifested in terms

of low levels of material human development side by side with the region’s almost unfathomable natural wealth, including a population estimated at

a billion people Africa has every conceivable natural resource that could

be put to commercial and military uses, ranging from cobalt, uranium, titanium, coltan, copper, gold and bauxite to diamond and OG.2 In recent times, highly priced rare earth materials such as niobium (formerly known

as columbium) have also been discovered in Kenya in East Africa In tion, the continent has a wide range of forest and agricultural products, including timber, cocoa, coffee, tea, shea butter, coconut, and kola nuts Some agricultural products, such as sugar cane, may also be used to pro-duce biofuels On top of minerals, ores, agricultural and forests products, the continent is emerging with more discoveries which could make it the newest hydrocarbon hub of the world It is also the site for some of the world’s important fisheries (Europa Publications 2015)

addi-Despite its natural wealth, one perplexing paradox is that many sures of economic development affirm that Africa is on the bottom rungs

mea-of the global economy It lags behind Western Europe, North America, Australia, New Zealand and South East Asia and is comparable only to other poor nations in the Indian subcontinent, the Caribbean, and South and Latin America that are stuck in the poverty rut Both the United Nations Development Program (UNDP) and the ILO (1997, 3) predicted that Africa would be the only continent where the number of poor would increase at the start of the twenty-first century (Panford 1999) Other commentators on world poverty affirm this view Yueh (2015) wrote, for example, that:

Sub-Saharan Africa is the only region where the number of poor people has increased during the past three decades Even though the percentage

of the African population living in extreme poverty is slightly lower than

in 1981, population growth means that the number of poor people has actually doubled They account for more than one-third of the poor in the world, despite Africa making up just 11% of the global population.

Thus, reports on Africa’s prospects for development are not encouraging Even though the proportion of citizens categorized as poor by the World Bank fell, in percentage terms, from 56% in 1990 to 43% in 2012, the num-ber of those deemed poor shot up––from 284 million in 1990 to 388 mil-lion in 2012 (Africa Report 2015, 64–66) This could mean that, at present, approximately one in three Africans could be classified as poor (Smith 2015, 64–66) China, in contrast, has successfully lifted over half a billion citizens out of poverty from the 1980s The troublesome aspects of contemporary Africa have prompted Moyo (2009, Preface) to critique international aid not only for retarding the continent’s development but also for making

the population contend with “abject poverty and flounder in … seemingly never ending … corruption, disease, poverty and aid-dependency.”

Before elaborating more on living and working conditions in Africa, I wish to raise some caveats Nothing is “innate,” “inherent,” “endemic,” or

“chronic” about Africans or the continent that engenders the deplorable state of affairs I am referring to. By using a political economy approach,

I seek to demonstrate that challenges,3 including the proverbial resource curse, have specific human-made causes, some of which preceded Africa’s independence For instance, in 1949 US President Harry Truman started the international aid business when, during his inauguration address, he spoke of using US resources to tackle poverty in poor parts of the world (Truman 1949) The regions he alluded to included vast territories in Africa still under colonial tutelage Hence one undisputable fact about Africa is that its poverty did not begin after independence Rather, most parts of Africa were already classified as poor by 1949, more than a whole decade before most African nations achieved independence One other caveat: it

is not all and always gloom and doom in Africa It is because our focus in this book, which are the working and living conditions of people in Africa, needs improvement that I stress the undesirable features of the situation

I thus first acknowledge some bright spots or positive trends In 1994, South Africa defied great odds and much global anxiety by successfully and peacefully transitioning to a system of democratic and multiparty gov-ernance; Kenya reduced dependency on foreign aid for budgetary support

to 10%; Uganda was the first nation in the world to reduce the AIDS rate

of infection; in 1992, 1996, 2000, 2004, 2008 and 2012, Ghana had back-to-back peaceful elections that ensured the predictable transfer of power from one government to another4 On top of all this, Ghana recently confirmed its reputation as one of Africa’s nations that are staying on the path to multi-party democracy In December 2016, Ghanaians ousted the National Democratic Party (NDC) led by President John Mahama by over 9% and voted into power the Nana Akufo –Addo-led New Patriotic Power (NPP) with a whopping majority for the national Parliament Now Ghana needs to focus on job creation for especially the youth who are desper-ately seeking to flee for any country in the world outside Africa.; Malawi and Zambia, through subsidies to farmers, improved maize production and even earned foreign exchange from selling surpluses (Bennett 2007; Economist Intelligence Unit (EIU) 2013) In addition, according to the World Bank, Ghana reduced the levels of poverty from a high of 53% in

1991 to 21% in 2012 (Smith 2015, 65) A few countries also began taking steps toward weaning themselves off aid and, in 2007, Ghana sold its first

international bonds worth $750m, being followed shortly afterwards by Gabon and other nations (Panford 2001; Moyo 2009).

There are also improvements on the gender front, although there is more room for improvement across the entire continent In Angola, for example, women took 81 of 220 parliamentary seats in elections held in September 2008 The same year, Rwandese women occupied 56% of seats in the national legislature These two countries are in the top 10 countries with the highest women law makers in the world The typical average for women

is 18% (Africa Renewal 2008, 24) Ghana, Nigeria and Liberia have also

chalked some significant firsts, with women occupying key national posts: Ellen Johnson Sirleaf became the first elected woman president in 2005 and she joined the small club of women world leaders Following in the footsteps of Ghana’s first woman appointed to the Supreme Court, in the Fourth Republic, a woman was appointed the Chief Justice5 while addi-tional women were appointed as Attorneys-General and as Speaker of the National Parliament Nigeria has also had its first female Minister of Finance, Ngozi Nweala Nkonjo, who held that cabinet position on two occasions

In another example, by 2006, Liberia had women in four high-profile tions: Chief of Police, Attorney General, Finance and Interior Ministers

posi-In the technological and innovation spheres, Kenya’s M-Pesa phone banking scheme—a first in the world and an ingenious system of bank-ing—has earned Africa some respectability It is not only the world’s first but also the largest phone-based banking with, at present, some 19 million users SAFARICOM, the operator, made a quarter of a billion dollar profit

in 2014–2015 (Boston Globe 2014; K9 and CBS 2015).6

I now shift to aspects of African conditions that require immediate and massive remediation There are two categories of African societies: war- torn and those afflicted by open on-going warfare and those that though not at war or having overt conflicts, still need to tackle declining living and work conditions The first comprises DR Congo (Eastern parts); Somalia, Sudan, South Sudan, Central African Republic, Libya and, more recently, Burundi which are experiencing dangerous security situations plus undesirable human conditions But even countries, including Ghana (which is deemed to be politically and economically exceptional by western donors (Kelsall 2013), Nigeria, Zambia, Equatorial Guinea, Senegal, Cameroon and Tanzania, all exhibit clear signs of deterioration—political, social, and economic

By the start of the twenty-first century, African living conditions could

be regarded as stagnant at best if I applied the human development cators devised by the UNDP and anecdotal evidence from a variety of

indi-sources, including the author’s observations from fieldwork and actual ing and working experiences over many decades It is ironic, but true, that Africa improved its conditions in the first 10 years of independence— the period up to the mid-1970s Even Ghana, which was the trailblazer during this earlier phase, has not escaped a decline in the post-1980s decades.7The World Bank reports Ghana loses 420m Ghana cedis a year due to malaria while few Ghanaians use proper toilets (Ghanaweb.com 2013).

liv-In several parts of Africa, sanitation and water-borne illnesses—malaria, bilharzia, typhoid and cholera—that were almost eradicated or brought under control by the 1970s, are coming back strongly In Ghana, a person dies every three hours (Daily Graphic 2013, 15) and the average Ghanaian has a 9.6% chance of being attacked by malaria (Rogers 2012) As if these challenges were not severe enough, AIDS has hit Africa’s southern nations hard In Zambia, 16% of the most economically active population (ages 15–49 years) were HIV positive or AIDS-infected (Mwenechanya 2009, 12) Even after decades of AIDS/HIV hitting Africa hard, there has not been a total reprieve, as is shown by the experience of South Africa: It has the largest number of HIV/AIDS-infected patients with 6.19 million in

2015, up from 5.48 million in 2011 In addition, in 2015, 162,445 ple, 30.5% of all deaths in South Africa, was caused by AIDS and related opportunistic illnesses (Kanabus 2016) These have culminated in con-

peo-ditions across Africa, and Lesotho in particular, being depicted by The

Economist (2012, 49) as:

… life for most Basotho is hard Over half the population lives below the poverty line Three-quarters of homes lack electricity, a third are without running water or sanitation Apart from diamonds and textiles, there is no industry Lesotho also has the world’s third-highest rate of HIV/AIDS, affecting one in four adults

The downward trajectory in living conditions in Africa, such as the increasing number of poor, are attributable to factors both within and outside the continent In relation to shrinking economic growth, because

of declining employment and low productivity, whether intended or not, neoliberal policy packages have accentuated the devastating effects of colonial rule, neocolonialism and the Cold War (Rodney 1982; Keller and Rothchild 1996; Mkandawire 1988; Panford 1994, 1999, 2001; Opoku 2010) With the demise of the Soviet Union, African states have abstained from appropriate national planning and abdicated such important duties

to western donors who since the mid-1980s, have become the de facto managers of African economies.

The absence of pertinent national vision and the dearth of diligent and creative planning and approaches to Africa’s challenges have combined with neoliberal economic practices to generate massive unemployment and the ballooning of the informal sector.8 It is this new class of unemployed

or working poor that are rapidly populating some of Africa’s exponentially expanding poor neighborhoods, such as Agbobloshie (in Accra) Ghana and Kibera (near Nairobi) in Kenya The former is Africa’s (and one of the world’s) leading e-waste and toxic dump sites The latter is fast becoming Africa’s (and one of the world’s) leading poor habitats Both lack basic necessities, including appropriate sanitation, and solid waste disposal and personal safety and security Supplies of social amenities, particularly water and power, are grossly inadequate Most dwellers are, technically speak-ing, “squatters” who due to low wages or unemployment are unable to access either regular housing or other infrastructural services

With regard to international trade, an important source of national wealth, Africa’s performance and outcomes are substantially inadequate and in large part explain why Africans are poor in spite of an abundance of natural resources In terms of both international trade and finance, Africa

is highly marginalized Whereas prior to the 1980s, Africans’ share value

of world trade was 3% by 2009, it shrunk:

Africa’s relationship to the global economy … presents acute challenges,

as evidenced by its lack of influence within the World Trade Organization Although the continent is home to 13 percent of the world’s population, it commands less than two percent of world trade and less than one percent of global investment These disparities reflect not only the small scale of many

of our national economies, but also severe inequalities and exploitative tionships embedded in the global economy (Trust Africa 2014, 4) 9

rela-The small percentage of the FDI that goes to Africa is confined mostly to extractive industries—timber logging, mining and crude petroleum—and

to a few states (AU 2011, 42):

Foreign investment in Africa is still heavily concentrated in 10 countries— South Africa, Egypt, Morocco, Algeria, Tunisia, Nigeria, Angola, Kenya and Ghana that have collectively attracted more than 70 percent of new FDI … over the period 2003–2010 … The majority of investments are still mainly directed toward extractive industries ….

I might add, FDI directed at extractives have not only failed to spur lasting economic growth but also wreaked severe environmental damage in many African countries as demonstrated in Sect 3.1 of this book Furthermore the AU (2011, 42) notes that:

… although the African share of global FDI has expanded greatly over the past decade, Africa is still not necessarily receiving a degree of investment that accurately reflects the increasing attractiveness of the continent—one supported by one of the fastest economic growth rates and some of the highest returns on investment in the world.

The latter is attested to by the fact that, by 1999, although the Ghana Stock Exchange paid the world’s highest rate of return on investments, Ghana did not become the preferred destination for FDI (Panford 2001) Instead, its role in the global economy remained the supplier of raw cocoa beans, gold ore, uncut/unpolished diamond and timber logs fresh from its rapidly dwindling forests

As stated already, extractive industries not only pose severe mental hazards but also do nothing to mitigate the continent’s mammoth unemployment situation.10 As if the burdens from global trade and finance were not heavy enough, “of all the economic activity and total money gen-erated by mining, agriculture and industry in Africa, less than 10% … goes into the hands of … Africans” (Iweala Nkonjo 2007, 2) Equally impor-tant, Iweala Nkonjo (2007, 2) demonstrates the real-life implications of Africa’s vulnerability in global trade:

environ-… Africa generates tons of oil for export, yet has no fuel to run their cles, generators and other … equipment Africa generates tons of rubber, yet Africans do not have access to … rubber condoms, gloves and other rubber products for their own medical needs Africa generates tons of lumber for export, yet Africans cannot make a stool to sit on.

vehi-As a consequence, gross domestic product (GDP) per capita for most non- oil- exporting nations hovers around $250–$500 This is coupled with phenomenally high and rapidly rising income inequality never experienced before on the continent Key areas—health, water, power/energy, educa-tion, training, science and information/communications technology (IT,

or ICT as it is known in Africa)—illustrate why Africa may be the last tinent to emancipate itself from excruciatingly painful poverty and hard

con-labor A Herculean bottleneck to development is the large infrastructural deficit of close to $100 billion (Daily Graphic 2009; Gentile 2010) There

is much evidence of not only declining health services but also utter crisis This is not confined to nations at war (Somalia, Central African Republic,

DR Congo (eastern parts) and Sudan/South Sudan), but also occurs in a nation like Ghana, deemed a model of success and in other countries, such

as Tanzania and Zambia (Pooley 2000)

Owing to an emaciated health care infrastructure, manifested by few doctors, nurses/midwives, pharmacists, laboratory technologists and ane-mic drug and other medical supplies (now popularly called “consumables”), most African health indicators are on the low side One result is that life expectancy in Africa is short, 40–50 years on average In China, Europe, Japan, the US, and Canada, it is, on average, 70–80 years and increasing Africa’s infant mortality (deaths among children under a year old) was 183 per 1000, maternal deaths (number of women who die from child birth) was 92 per 1000 (UNESCO Institute for Statistics (UIS), Accessed 20 November 2015)

In 2008, 80% of deaths from malaria happened in Sub-Saharan Africa among children 5 years or younger While, every three hours, a Ghanaian succumbed to death caused by malaria (Daily Graphic 2013, 15) and the average Ghanaian having a 9.6% chance of being afflicted by malaria (Rogers 2012).11 Nigeria and India are responsible for almost 30% of global child mortality, with Angola experiencing the world’s highest rate:

167 deaths per 1000 This is 84 times more the rate in Luxembourg (which is 2 per 1000) SSA’s average is estimated to be 15 times more than that of western industrialized countries (Gladstone 2014) AIDS/HIV are two health areas where Africa urgently has to cover lost ground quickly According to the Economist Intelligence Unit (EIU 2012), 69%, 23.5 million of 34 million AIDS fatalities occurred in Sub-Saharan Africa

The 2014–2015 Ebola outbreak in the three hardest-hit nations—Sierra Leone, Liberia and Guinea—depicted the vulnerability of health systems in West Africa The outbreak also demonstrated clearly that the health care systems themselves are in acute states and required urgent care.12 They also exposed the potent negative outcomes of a combina-tion of IMF–World Bank policies and prolonged civil turmoil The African Development Bank records that, for a population of 4.19 million, Liberia had 51 medical doctors, 978 nurses/midwives, and 269 pharmacists Meanwhile, similar to Ethiopia,13 77% of Liberia’s trained doctors work in

the US. Sierra Leone’s situation is not better: for a population of mately six million citizens, it had 136 doctors, 1017 midwives/nurses and

approxi-114 pharmacists (Tafineryika 2014, 10–11)

With regard to social infrastructure so crucial to development and nomic productivity—education, training, research and knowledge-driven technology—Africa’s record is poor and getting worse This is so essen-tial because it affects the continent’s ability to innovate, absorb, and use new technology Without these, Africa cannot develop or apply technol-ogy to reduce poverty The continent faces a serious triple challenge of low rates of education, training and technology/innovation which are a long way from being tackled Of a population of one billion, a full third,

eco-350 million are young (ages 15–25) and will need jobs in the next 30 years (Smith 2015, 14) Ghana depicts the intricate dimensions of huge youth unemployment and the urgency to provide large numbers of decent jobs soon In 2015 alone, 438,030 junior high schoolers graduated—

up from 422,946 in 2014 (Daily Graphic 2015, 23) Most of them, like

their peers across the continent, will go without higher ther formal training and good jobs due to limited enrollment in tertiary institutions and the demand for employment outpacing job growth At the continental level, 15 million jobs are needed each year While local jobs are scarce, in the 1990s, the continent spent $4 billion/year on the employment of 100,000 foreign experts (Ghana News Agency (GNA) 2003) Employment prospects have been so dim that university gradu-ates have created an Association of Unemployed University Graduates in Ghana

education/fur-Several factors including a neoliberal policy regime that prefers sive foreign experts to local talent even in a country like Ghana that had

expen-a relexpen-atively good educexpen-ationexpen-al system thexpen-at produced expen-a decent number of technocrats with high international repute including but not limited to the former United Nations (UN’s) Secretary General, Kofi Annan and Robert Gardner, the first African Executive Secretary of the UN’s Economic Commission for Africa in Addis Ababa, Ethiopia This is also one of the effects of strings being attached to international aid on which Africa has become so dependent—hiring nationals of donor countries as a condition There may even be the contentious notion that African nations are devoid

of competent and dedicated technocrats, academics, and bureaucrats who can plan and execute development projects Finally, in spite of modifica-tions, most African educational systems are not thoroughly overhauled and still retain European legacies that do not make them functionally salient to

the needs of modern-day Africa, especially in the economic realm Hence much of Africa’s contemporary education shows a disconnection between the classroom, real life, work, and industry This has resulted in a seem-ingly intractable vicious cycle of a weak educational system not producing necessary skills needed to accelerate real economic growth which will then boost further economic expansion and, in turn, engender an improved and relevant education and training and better living conditions.

The education, innovation, research and development (R&D) profiles

of African nations including those of the biggest economies—Nigeria and South Africa—may also explain why the continent is faring poorly

in today’s globalized and innovation economy Too many African dren are out of school and not receiving basic education to gain a “toe-hold” on modern jobs, even if they were made available Ghana, the IMF’s

chil-“star pupil,” has 1.2 million males and 600,000 females out of school In

2011 in Angola, of 21.47 million people, 450,000 females were outside the school system and only 1.9 million were in school In Nigeria (the continent’s most populous country) 4.5 million girls and more than 8 mil-lion boys did not attend school and in 2010, of a total population of 173.6 million, only 14.7 million were in post-secondary schools For Equatorial Guinea, only 66,000 of 820,885 nationals went beyond secondary school-ing in 2013 (UIS UNESCO.org accessed 24 November, 2015)

In an era of globalization driven by the Internet, Africa lacks such a critical tool for success Starting with the dearth of telephone land lines, which is an inheritance from colonial times, it has had severe financial and technical difficulties catching up with Internet connectivity, access, usage and rates of penetration This is due to the high cost of both hardware and software, making it lag behind most continents One factor accounting for the restricted access and affordability is the use of expensive satellites by Africans—whereas the industrialized world uses cheaper and high-capacity fiber optic cables With a population of under a billion, it was estimated that in 2007 just 33 million Africans used the Internet (Internet World Statistics 2007) Thus, Africa had an Internet penetration rate of 3%—one of the lowest in the world But even where available, as is the case in Kenya, Ghana, Zambia, South Africa and Nigeria, which are among the most networked African states, access is severely hampered by unreliable power and high charges for Internet usage.14

Africa may be the very last underdeveloped frontier to exploit high technology and to benefit fully from the innovation economy and global-ization because of low literacy levels, relatively few years of schooling and

the grossly inadequate number of researchers needed to boost ity on a massive scale to accelerate job growth and achieve substantial eco-nomic advancement Except Ghana and Angola which have 70% literacy rates, Nigeria, for instance, had a low rate, 59.56% and the Ivory Coast 43.11% in 2015 and Ethiopia, a low of 38.9% in 2007 (UNIS/UNESCO.org Accessed 24 November 2015) On another measure critical to capac-ity to use technology, attracting FDI and also accumulating domestic capi-tal and savings through high earnings—years of school—Africa lies at the bottom Among the key figures are: Burkina Faso, 1.3 years of school-ing in 2006; Cameroon, 5.2 years and Ghana, 6.717 years in 2010; and Kenya 6.09 years in 2009 Even South Africa, the second-largest economy and the most technologically advanced country on the continent, has an average of only 9.9 years of education (UNIS UNESCO.org accessed 24 November 2015).

productiv-In the case of research, as with most development indices, Africa’s record also leaves much room for improvement In 2011, Angola had 1150 researchers; Ghana, 941  in 2010; Nigeria 5677; Kenya, 9305  in 2010 South Africa had the highest, 21,383 in 2013 in Africa (USIS/UNESCO.org accessed 24 November 2015) Africa’s weaknesses with respect to crit-ical development indicators, especially in areas essential to modern tech-nology, innovation, and to a more beneficial role in globalization have led the World Economic Forum (WEF 2012, 4) to make it:

… clear that many emerging economies—in Sub-Saharan Africa (SSA) particularly—require improvements across the board if they are to bolster their capacity to compete within world markets, and also achieve sustainable growth and development.

2.2 AfricA’s AbuNdANt NAturAl resources

To the uninitiated, the idea of Africa’s copious natural resources may be mere legend or pure exaggeration As this sub-chapter demonstrates, however, the continent’s resource endowment is virtually unfathomable Much more impressive is the fact that it is the least explored region for oil and gas even after a rash of important discoveries, which began with Ghana’s Jubilee Field in June 2007

Carlos Lopes, the Executive Secretary of the UN’s Economic Commission for Africa (2013, 43), provides an apt description of the mag-nitude of Africa’s minerals, mineral ores and hydrocarbon wealth:

More than 500 years after commercial exploitation of Africa’s resources began, Africa continues to host many of the large and unexploited deposits of minerals globally Africa accounts for three-quarters of the world’s platinum supply, and half of its diamonds and chromium It has up to one-fifth of the world’s gold and uranium … and it is increasingly home to oil and gas production with over 30 countries now in this category.

Africa’s prolific mineral endowment led Ghana’s President Kwame Nkrumah (Africa Progress Panel 2013) to declare correctly that “… all stock exchanges in the world are preoccupied with Africa’s gold, dia-monds, uranium, platinum, copper and iron ore.”

In addition to impressive quantities of high-quality minerals, ores, and rare earth materials, Africa generates a wide range of agricultural and for-est products Among the latter are: cola nut; shea butter; coconut (copra); rubber (latex); cocoa; groundnut (peanuts); cotton; coffee; and tea There are also plants and cane sugar that can be converted into biofuels The long shores, rivers, lakes, and lagoons of the continent yield shrimps, fresh and saltwater fish.15 Large rivers, including the Congo, Niger, Nile, Volta and many others, are being tapped or remain to be turned into hydro sources

of energy Sea waves, strong winds, and the presence of sunshine on over

300 days a year can all be harnessed for “green” energy (AU 2013) In addition, it has a population which can create a potential market of almost

a billion people who live in the most arable land in the world. Kyalangilwa (2012, 1) expressed how one single African country depicts Africa’s unpar-alleled agricultural potential: The Democratic Republic of Congo (DR Congo) “can feed all of Africa and countries of the European Union.”

We only add that currently most agricultural output, especially food, and, for example, Ghana’s annual output of a million metric tons of cocoa comes from small-scale farms without mechanically operated irrigation, soil plowing and harvesting Farming is low technology in Africa which is based mostly on a simple implement, the hoe or axe while a meager 5% of agriculture is irrigated (Chagutah 2016)

Africa leads the world in the output of many important agricultural commodities For 2010 and 2011–2012, world cocoa totals were 4,292 metric tons and 5,008 metric tons, respectively Of these two figures, Africa’s respective shares were 2,777 million and 3,107 million tons (Europa Publications 2015, 1534) with the Ivory Coast as the number one producer and Ghana being number three.16 With coffee, similarly, the world’s second most traded item (after crude petroleum), Ethiopia

ranks third in world output Africa’s agricultural resources extend beyond forest products It is also rich in marine resources such as salt, fish and shrimps from the sea and freshwater bodies, including Lake Victoria in East Africa and Lake Volta in Ghana Fishing trawlers from China, Russia and other eastern and western European countries fish for different species from the Northwest coast of Africa The continent’s immense fishing potential is illustrated by Mauritania’s sale of fishing rights to 43 European Union (EU) boats for $146m a year (Lofraniere 2008).

Although not unique, the DR Congo’s variety of natural resources resents the enormity and diversity of Africa’s natural wealth Some esti-mates value the DR Congo’s natural resources alone at over $24 trillion (Globe and Mail 2015) It is endowed with a wide array of other resources

rep-It even produces decent amounts of cocoa beans But its real potential lies in the fact that by all accounts, it is a big mineral power house, not only in Africa but also in the world Congolese uranium was used in the

US atomic bomb dropped in 1945 on Nagasaki and Hiroshima in Japan (Cohen 2003, 1) It is also a producer of copper, diamond, cobalt and gold With recent developments in high technology and electronics, the

DR Congo’s commercial and strategic relevance has soared hugely and contributed to its natural wealth being estimated as high as $24 trillion Gold for example, is essential to the production of one of the twenty-first- century automobile’s safety features—the air bag Because gold is one of the best conductors of electricity, key components of the car’s airbag such

as electrical terminals are gold plated to make them work more predictably during automobile accidents

Without key raw materials such as tungsten and colombo lite (coltan), many features of the modern “smart phone” and “smart television” would be inoperable The billion Apple iPhones and other fancy gadgets sold by 2015 would, for instance, not vibrate without tung-sten mined in the Eastern DR Congo In fact, over 50% of the raw miner-als and ores used are from DR Congo (Greenwood 2010) With respect to copper, which is so essential for conducting electricity in homes and busi-nesses and for running motors (through copper wires), Zambia is king It has the world’s largest open pit copper mine and is also one of the world’s leading producers

tanta-There are more indications of Africa being one of the most endowed continents Eleven African nations are major world suppliers of diamond They are led by Botswana,17 and South Africa, followed by Lesotho,

Angola and DR Congo Some of the most spectacular and expensive monds in the world have been found in these countries In February

dia-2016, a 404 carat, almost flawless D colored high clear quality diamond, valued at $14 million to $20 million, was discovered in Angola (CNN 2016) Another popular gem is “Lesotho Promise” found in Lesotho

It was bought at $12 million but sold later for $20 million In 2006 the Lesotho Promise was categorized as the world’s 15th-largest rough diamond (GRAFF Accessed 17 February 2016) Other important gem producers include Angola, Zimbabwe, Liberia and Sierra Leone (World Diamond Council Accessed 23 February 2016) South Africa tops the rankings for gold production in Africa followed by Ghana, which is num-ber 8 in the world

There is a new harbinger of Africa’s commercial and geostrategic evance in the sphere of energy, oil, and gas (OG) in particular This is so important because OG is not only the single largest item traded18 but also due to the fact that oil supply has profound global security, energy and enormous economic implications For the US, in particular, the 9/11 attacks and political turbulence in the Middle East have made the search for alternative sources imperative (Servant 2003) In addition, as Obeng- Odoom (2014, 52) observed:

rel-… it is not only China and the USA that are invested in oil in Africa: most industrialised countries are seeking to move away from the Middle East- centric focus in their pursuit of oil supplies (Mohan and Power 2009) Since

2007, there have been at least 41 companies, from different countries, that have applied for prospecting licenses to operate in Ghana.

Over 30 of the 55 nations (that is, around 60%) on the continent of Africa are involved in different phases of oil and gas extraction (Lopes 2013, 43)

Of these, 11 are significant producers and yet the continent is the least explored for petroleum KPMG (2013, 5) explains why and how the Gulf

of Guinea had high and significant commercial and strategic importance for hydrocarbon supplies by 2011:

…West Africa’s coast spanning more than a dozen countries, the Gulf of Guinea

a growing source of oil to world markets … continues to attract significant … foreign direct investment targeted at Africa’s hydrocarbons … includes oil pro- ducing Nigeria, and Ghana that supply European and American markets, although Angola supplies much to the Chinese as well Nigeria is the biggest

oil exporter at 2.5 million bpd in 2011 … Angola exporting… 1.84 million bpd Smaller producers include Equatorial Guinea (303,300 bpd), Congo (Brazzaville) (298,000 bpd), Gabon (244,000 bpd), Cameroon (62,000 bpd) and Ivory Coast (40,600 bpd).

The International Energy Agency (2014, 61) agrees with KPMG’s ment of the Gulf of Guinea countries’ value as OG nations It is not only the Gulf of Guinea coast in West Africa that is emerging as an important arena; East African countries are also making new and important discover-ies Even though West Africa is outproducing East Africa, Uganda discov-ered significant oil reservoirs in 2006 and Tanzania, and Kenya could soon join the roster of new oil nations Mozambique, on the other hand, has found one of the potentially largest liquid petroleum gas (LPG) reservoirs

assess-in the world: “… assess-in 2011–2012, we made the most important discovery

in our history: a gas deposit in Mozambique that on its own, could satisfy European demand for five years” (Eni 2012, 25) These developments led Eni (2012, 24) to conclude that: “In the last 5 years, Africa’s oil resources have increased 30% and its gas resources, more than doubled.”

A confluence of key developments have accentuated the importance of Africa’s oil to the world.19 As production techniques aided by advances in computing and 3- and 4-Dimensional (3D and 4D) imaging lowered pro-duction costs, an increasing number of previously unexplored regions have become accessible In addition, as oil prices rocketed and new technolo-gies made it feasible and profitable, even oil reserves in the deep Atlantic Ocean/Gulf of Guinea were brought on line for production and export

to the international oil market Up until June 2014, during a period when oil prices kept on the upswing and reached $110 per barrel,20 Sierra Leone and Liberia joined new producers, Ivory Coast and Ghana, by becom-ing prospective producers in the West African region This added to the continent’s pivotal role in energy production and related security matters

in the world For example, oil from Ghana’s Jubilee Field has aroused keen US interest (McCaskie 2008)

Commercial interests and safeguarding African petroleum supplies were the impetus for the US’s creation of AFRICOM which comprises 1,300 troops and civilians based at Stuttgart, Germany AFRICOM, which began operations on 1 October 2007, is a special US rapid response military unit designated for Africa The US is also equally concerned about using AFRICOM to counter Chinese growing influence on the continent (BBC News 2008)