News today from Libya and Ghana.
Increasing the transparency of dealings regarding the ‘black gold’ that lies beneath Libya will be essential to ensuring balanced growth and employment for the Libyan people, but this will prove no mean feat. Given that pressure is unlikely to come from external governments, the incentives and pushes for reform will have to be generated domestically through civil society and a free media.
When getting rid of Gaddafi was so important for U.S./NATO, there was much talk about his abuse of the country’s oil wealth. Now that he’s out of the picture, it’s like, “who cares?” As long as the oil flows…
This article points to some lessons that Libya may learn from Iraq — not exactly encouraging. In any case, read this as a reminder that oil will rebuild Libya for better or for worse.
In other news from Bloomberg/Businessweek, I see that “Ghana’s Oil-Driven North-South Divide Erodes Support for Mills”. This is certainly a story we’ll be hearing more about in the coming months as Ghana’s presidential election approaches. The authors, Moses Mozart Dwazu and Ekow Dontoh, write:
The [north-south] divide has been deepened by Ghana’s oil boom, sparked by the 2007 discovery of the offshore Jubilee field by London- based Tullow Oil Plc …. Mills, who started production at Jubilee in a Dec. 15, 2010, ceremony with a promise to use oil for a “major industrial takeoff,” is banking on crude to boost the country’s $31 billion economy and create jobs …. Since that day, though, oil has missed production targets. A peak output of 120,000 barrels a day from Jubilee was delayed until 2013, at least a year later than planned, because of technical issues, Tullow said Jan. 18. With less money from oil, Mills may not be able to bring development in time to win northern votes in the December contest.
Oil is also likely to be a big issue in the upcoming election in the Western Region, where, to date, the oil-fueled economic growth seems to exist mainly on paper.
Oil production can hit the promised 120,000 b.p.d.; it can increase “fivefold in five years,” as Fifi Kwetey, Ghana’s Deputy Minister of Finance and Economic Planning, recently announced. But if oil doesn’t lead to jobs and tangible improvement on the ground, it’s hardly the “blessing” promised by President Mills back in December 2010.