The media in Ghana are reporting that representatives of all the main political parties in Parliament are sufficiently concerned about the anticipated $1 billion in additional revenue in 2010 that they issued a communiqué calling for the government to stop issuing any new licenses for oil production until it can improve its regulations for the oil industry and clarify how the money will be managed.
An article in the government-owned Daily Graphic newspaper said that the members of Parliament “argued that less than one year before the drilling of the country’s oil in commercial quantities, there was not a single law before Parliament on how the country would manage the oil fields and the expected revenue as well as how to ensure that the environment was not damaged by the companies.”
The communiqué urged the government to use oil money to diversify its economy, and avoid an over reliance on oil that has been so disastrous in other countries in Africa. The communiqué also pointed out that Ghana needs to beef up its tax revenue agency to ensure oil taxes are properly collected and available for social programs to benefits its citizens. The members of Parliament called for the government to use 80 percent of oil funds to improve the “physical and social infrastructure” of the country, save 10 percent for future needs, and use the other 10 percent for stabilizing the budget.
In early 2009 Oxfam America and the Integrated Social Development Center of Ghana (ISODEC) issued a report called Ghana’s Big Test that recommended the country halt new licenses and disclose details of licenses and agreements it makes with oil companies as a means to increase transparency. Following the release of this report, Ghana’s new president John Atta Mills committed to do this, and also said the country would take steps to promote new and better regulations and foster open and public procedures for issuing licenses and setting policies.
To date, the government has not followed through on its commitments to disclose petroleum agreements, despite continued calls from civil society and parliamentarians to do so. Oxfam partner organization ISODEC has continued to promote opportunities to implement recommendations from the report. Steve Manteaw, campaigns coordinator at ISODEC, says that, “Ghana must control the pace of petroleum sector development so that it does not outstrip the capacity of the government and society to build institutions, regulations and standards.”
“The communiqué issued by the members of Parliament, cutting across Ghana’s political spectrum, emphasizes the importance of transparency and responsible management of oil revenues,” says Ian Gary, Oxfam America’s senior policy advisor and author of the Ghana’s Big Test report. “It will be vital for the government to fully consult with members of Parliament and the public at large on the legal framework for regulating the sector and managing revenues so that strong safeguards are in place before oil starts to flow.”
]]>But a hungry child exists in a larger context: if we nourish communities, they can nourish their own children.
The woman on our cover, Fatou Doumbia, and other women in her village in Mali, pooled their resources last year. They set aside nearly a ton of millet as a defense against the hunger they’d seen as food prices spiked. Hers is another face of hunger: determined, resourceful.
After the last harvest, Oxfam reached out to supporters to respond to the food crisis. We’ve devoted much of this issue to looking at what communities have done to avoid the kinds of hardships they confronted. When people living in poverty are hit by a food crisis or natural disaster, they lack resources to tide them over.
Oxfam works to help people build their resilience. Let respect and hope fuel your efforts to support women like Doumbia.
]]>Achieving farm resilience requires building up the resilience of vulnerable farmers by developing their skills, expertise and voice while supporting their use of agro-ecological farming practices. Building resilience depends not just on how farmers manage resources, but on how well local, national, and global institutions support farmers. Agro-ecological practices can empower vulnerable small-scale farmers, offering them both greater control over their lives and an accessible means of improving their food security, while decreasing their risk of crop failure or livestock death due to climate shocks. Vulnerable farmers can use agro-ecological practices to build resilient farms and improve their livelihoods, achieving multiple benefits: 1. improved food security; 2. adaptation to a changing climate; and 3. mitigation of climate change.
People-centred resilience consists of five principles which should guide how investments in vulnerable farming communities are designed and implemented. They are:
Following these principles ensures that investments support farmers in their efforts to become food-secure and adapt to climate change. Four institutions central to delivering people-centered resilience are: secure land rights; dynamic farmer associations; responsive agricultural advisory services; and public support for environmental services.
]]>“Since I started with the group, my mind is more open,” she says proudly in front of her small home of mud bricks on a warm, windy March day. “I can manage lots of different things now.”
And she does. Inside her house she has little packages of spices she sells, along with smoked fish, on the dusty streets of Domba, her town in southern Mali. Once a week she goes to the market and sells there, but she has plenty of clients in her neighborhood, and she just goes door to door.
Mariko, who is 64 and has eight children, raises and sells chickens and shea nuts (which are processed into shea butter). Since she joined her Saving for Change group, she says she manages her shea nut business completely differently. “I don’t just sell my shea nuts for whatever I can get,” she says proudly, with the air of an experienced trader. “Now I know to wait until prices are higher, and I can get more money.” She says she appreciates having money for emergencies, to help sick relatives, or to pay for weddings or funerals.
Mariko is just one of 25 women in the Saving for Change group in Domba. They named the group Ikidia, the word for harmony in the local language, Bambara. The group was established in 2007, two years after Oxfam America launched its Saving for Change program in Mali. This group, like the 7,019 other groups in 2,625 villages in Mali, is organized to help women save their own money in a safe place and make loans to each other from a common fund at 10 percent a month. Each member makes a deposit each week (it is roughly 50 cents), and the group saves, loans, and makes interest on the group funds. Since women in rural Mali rarely finish school, they don’t keep elaborate written records. Each woman keeps track of her own and one other member’s loans and payment schedule, a sort of financial buddy system. And they all remember the total in the cash box at the end of each meeting.
Once a year the amount saved plus interest earned is divided up equally among the group members. The funds are usually disbursed right before the harvest, when families in this agricultural area are most financially stressed. The Ikidia group fund disbursed about $46 to each member at the end of the first year. Soumba Doumbia, the group’s president, says she used this money to pay all the school fees and buy clothes and books for her seven children, who were just heading back to classes.
There are now 250,000 people involved in Saving for Change groups in 6,000 villages in Mali, Senegal, Burkina Faso, El Salvador, and Cambodia. Collectively, these groups have saved over $4 million, and the average participants earn 20 percent annually on their deposits.
This rapid growth, achieved in just four years, is remarkable, says John Ambler, Oxfam America’s senior vice president for programs. “A traditional microcredit institution might take eight or 10 years just to reach 10,000 borrowers,” he says. One reason why Saving for Change is taking off so quickly is because women can form groups with fellow villagers in which they save and invest their own money. The groups need not have any relationship with a microfinance institution like a bank. This is helping the program reach the poorest women who would not otherwise be able to borrow money. Most banks consider them to be too big a risk.
Once Oxfam and our partners start one group in a village, others can form on their own, with little or no outside support. On average, it only costs Oxfam about $20 per Saving for Change member to start and train a group to manage its own operations. Women who learn how to form a group can then help others in nearby villages do the same thing, at no additional cost to the program.
If Saving for Change continues to grow at the current rate, the number of participants should double in the next two years. Doumbia says the Ikidia group members are benefiting not just from increased income, easier access to credit, and all the material improvements. They are also building self-confidence and dignity. “Before this group, if we had money problems, we would ask our friends for help, but they could not always say yes,” Doumbia says. “We would have to go into nearby towns and borrow money. We had no hope.
“But now we can find money to solve our problems through the group.”
]]>"President Obama's historic visit to Ghana, so early in his presidency and on the heels of important commitments at the G8 in Italy, signals the importance of African development to US interests," said Raymond Offenheiser, President of Oxfam America. "President Obama gets it. He understands that without a strong civil society, and capable, transparent governance, efforts to fight poverty and bring about social justice in Africa will at best be incremental. Good governance and sustainable use of resources will inspire more effective international assistance and increase trade."
President Obama had several recommendations that will help Africa on the road to prosperity. Here are a few of the highlights from the speech:
"In the 21st century, capable, reliable, and transparent institutions are the key to success—strong parliaments; honest police forces; independent judges; an independent press; a vibrant private sector; a civil society. Those are the things that give life to democracy, because that is what matters in people's everyday lives." These are all important parts of a thriving democracy, and President Obama made clear in his speech that these should be a priority in Africa just as they should be on every other continent. Building strong institutions that protect the rights of citizens, and allow business and entrepreneurs to flourish, will encourage investment in Africa. Oxfam is focused on helping civil society organizations work to hold their governments accountable. Examples include our partnerships with groups promoting new laws that accord equal rights to women and girls in southern Africa, and a region-wide proposal for uniform laws governing the mining industry in West Africa.
"So in Ghana, for instance, oil brings great opportunities, and you have been very responsible in preparing for new revenue. But as so many Ghanaians know, oil cannot simply become the new cocoa... Dependence on commodities—or a single export—has a tendency to concentrate wealth in the hands of the few, and leaves people too vulnerable to downturns." Resources like gold, diamonds, and oil can bring enormous wealth and potential for development. The road to prosperity will require leaders to avoid the path of poor management, corruption, violence and war. Ghana is a promising example of what is possible: Since Ghana discovered oil near its coast, the country's President John Atta Mills pledged earlier this year to disclose all petroleum agreements, so citizens can track what money comes to the government and how revenues are spent. This pledge has not yet been turned into reality. Real transparency needs to be built into a new legislative framework for how Ghana's new oil wealth will be managed, to ensure revenues are spent on social services and poverty reduction. Oxfam is working with the US Congress on legislation to require all US and foreign companies subject to Securities and Exchange Commission rules to disclose payments to developing country governments. This will be a critically important tool for citizens working to avoid corruption and waste of natural resource revenues.
President Obama also highlighted steps that the US would take to help combat corruption, including addressing corruption in the annual State Department human rights report, a recommendation that was made by Oxfam America in its Presidential transition memos.
"Aid is not an end in itself. The purpose of foreign assistance must be creating the conditions where it's no longer needed." The United States needs to make a number of key reforms to make our foreign aid system as effective as possible in reducing poverty and creating prosperous communities throughout the developing world. The US lacks a coherent strategy for global development. Oxfam is calling on the US to keep recipient country governments and their public informed on the nature and amount of American aid, and let each recipient country lead its own development agenda. President Obama's focus on using aid to defeat poverty is on the right track—one that we hope will lead to a new strategy for global development and a reinvigorated, effective aid system that will also rebuild US leadership in the world.
"A warming planet will spread disease, shrink water resources, and deplete crops, creating conditions that produce more famine and more conflict." Climate change is already affecting the lives and livelihoods of millions of poor people in Africa, as a recent Oxfam report detailed. Tackling these impacts is essential to addressing food security and broader development objectives. President Obama must commit to help bring about a comprehensive global climate strategy that will help poor communities cope with failed crops, dwindling reserves of clean water, and displacement caused by extreme weather events. The US and other wealthier countries must curb their greenhouse gas emissions to prevent climate chaos and provide adequate financial assistance to help African countries adapt in greener and more sustainable ways.
"Now, America can also do more to promote trade and investment." The economic welfare of Americans is inextricably linked with the well-being of people across the globe. While our foreign policy seeks to address the problems of poverty, disease and lack of economic opportunity, our trade policy has often exacerbated them, by demanding greater access to export markets in the poor countries, more favorable rules for US investors that can lead to greater poverty and inequality, and limiting access to affordable medicines. President Obama must develop a new trade policy with economic development as a core objective, spreading the benefits of trade as widely as possible, in the developing world as well as in the United States. This must include focusing efforts on the multilateral trading system to achieve a successful conclusion of the Doha Development Round, while working with Congress to pass legislation providing for duty-free and quota-free market access for all Least Developed Countries (LDCs).
]]>"Much like the Cairo speech, we are hoping the Accra speech will signal a new era of engagement, respect and partnership with Africa," said Raymond C. Offenheiser, President of Oxfam America. "This historic visit, so early in his presidency and on the heels of important commitments at the G8 in Italy, signals the importance President Obama places on African development."
Millions of Africans live in extreme poverty, and are now hit hard by the global economic and climate crisis. Sub-Saharan Africa alone is expecting losses of up to $245 billion this year as a result of the global slump, which is almost seven times the amount it receives in global aid. In Ghana, a resource-rich country, the life expectancy is a mere 58 years and 70% of people in the poor northern regions live on less than $1 a day. Despite the economic crisis, Africa continues to attract large investments to extract the riches that lie below ground, producing billions in government revenues. By 2015, oil revenues in African oil-exporting countries will exceed the amount needed to meet key social development goals by $35 billion annually—but investing this money wisely is not a sure thing.
"Africa is rich in natural resources like gold, diamonds and oil, but, too often, these resources have contributed to corruption, conflict, and human rights abuses," said Offenheiser. "But important progress can be made to turn this around. President Obama can help by supporting increased transparency and the disclosure of payments from US and other companies to African governments to help ensure responsible use of billions of dollars of government revenues per year."
Oxfam praised Ghana's recent commitment to transparency in the country's nascent oil sector and urged President Obama to encourage the government to follow through on these commitments and encourage other African governments to follow the positive steps the Ghanaian government has taken to date.
Oxfam also noted that key reforms are needed to make the US foreign aid system as effective as possible in reducing poverty and creating prosperous communities throughout the developing world. The US currently lacks a coherent assistance strategy for many of the countries it is trying to help. Oxfam is calling on the US to keep recipient country governments and their public informed on the nature and amount of American aid, help the recipient country to manage its own development, and ultimately, let each recipient country lead its own development agenda.
"American generosity is undermined by a reactive approach that prioritizes relief efforts—like food aid—that saves lives, but doesn't address underlying causes of poverty and hunger," said Offenheiser. "If the US wants to use its aid consistently help the poor in countries such as Ghana, it needs a global development strategy to guide the US government's efforts to fight poverty."
Climate change is already impacting the lives and livelihoods of millions of poor people in Africa, as a recent Oxfam report details. Tackling these impacts is essential to addressing food security and broader development objectives. President Obama must commit to help bring about a comprehensive global climate strategy that will help poor communities cope with the impacts of global warming, from failed crops to dwindling reserves of clean water and displacement caused by extreme weather events.
"Global hunger and poverty is a human tragedy exacerbated by faltering investments in agricultural production and the growing impacts of climate change," said Offenheiser. "We are pleased to see President Obama follow through on his commitments to reassert US leadership and address the challenges facing the billion people around the world without enough food."
]]>West African countries produce millions of ounces of gold each year, but the region is one of the poorest in the world. Provisions set forth in a directive issued by the Economic Community of West Africa States (ECOWAS) create a basis for helping communities ensure that mining revenues will be used in ways that will reduce poverty, and that they enjoy some of the benefits of wealth produced by mining—instead of simply enduring the costs in terms of pollution, and loss of farm lands. Uniform standards across the region will help prevent destructive competition for foreign investment that force governments to relax environmental and financial standards.
Richard Ellimah, from Obuasi, Ghana, says the new mining directive is "probably the most audacious attempt by the sub regional body to address concerns of mining-affected communities... We are looking forward to using the directive to demand respect for human rights, and freedom of information."
Campaign activities during the week of action will take place in Ghana, Burkina Faso, Senegal, Nigeria, and Mali, and will include debates and information workshops to teach people in communities affected by mining about the principles in the ECOWAS mining directive. Top among those principles is free, prior, and informed consent, which will give people the right to say whether—and under what terms—mining can be carried out in their community. Civil society organizations will reach out to the press, holding information workshops for the media and interested environmental and social organizations. Organizations also plan to contact their legislatures and mining ministries to ask them to change their regulations to comply with the ECOWAS directive on mining.
Six allied organizations held a press conference following the workshop and released a statement calling on the government to revoke permits it granted Newmont Mining of Denver to explore for gold in the Ajenua Bepo Forest Reserve. "When government revokes the Environmental Permit to mine in Ajenua Bepo Forest Reserve it would demonstrate its preparedness to define forest reserves as 'No Go Zones' for mining," the statement says.
"This campaign is the next phase of the movement towards an increased citizens' participation in public policy making and better governance and regulation in the mining sector in West Africa," says Ibrahima Aidara, Oxfam America's lead expert on extractive industries in West Africa.
]]>Last month, Newmont released the results of an independent review, which provides information about the company's community relationships and important recommendations for improving operations on the ground. The review, the first of its kind by a major mining company, came at the request of shareholders, led by New York-based Christian Brothers Investment Services, concerned about protests and environmental problems at Newmont's mining projects around the world. The company will formally present the results of the report to shareholders at the annual meeting.
"We commend Newmont for conducting a critical assessment of their community relationships. As shareholders gather this week, plans for urgent action to improve relations with the communities living near its operations should be at the top of the agenda," said Raymond C. Offenheiser, president of Oxfam America.
Recommendations from the report include handling community conflicts at an earlier stage, holding management accountable for community relations, and establishing effective grievance processes at all sites. The report indentifies problems with Newmont's community interaction at several locations, including sites in Ghana and Peru.
Nearly 10,000 villagers, mainly poor farmers, were displaced by the Newmont's Ahafo mine in Ghana. The report identified the long-term success of the resettlement as one of the greatest risks confronting the project and called on Newmont to actively monitor the implementation of resettlement. Newmont and the World Bank (IFC) will be conducting an audit of the resettlement program this year. Oxfam urges Newmont to make the audit process transparent and participatory.
Newmont's Yanacocha mine in Peru has been the site of repeated protests and violence in recent years. In 2007, local mining activists were the targets of harassments and death threats.
"The report identified an atmosphere of fear and intimidation among local residents at the Yanacocha mine, who worry about speaking out against the company out of fear of harassment by the mine's security forces," said Offenheiser. "It is very troubling that people are afraid to peacefully express their concerns. Newmont must address this situation immediately."
Communities affected by mining projects should have a role in decision-making about how the project will affect their lands and livelihoods. The report recommends an action plan that includes clarification of Newmont's commitment to the principle of free, prior and informed consent for communities.
"Newmont's endorsement of the principle of free, prior and informed consent for communities would be an important step forward," said Offenheiser. "The key now is to engage with local communities and apply this principle to company practice. We are pleased that Newmont's board of directors has accepted the report's analysis and recommendations and directed management to engage with affected communities on the report's findings."
The Newmont report also highlighted community concern about lack of access to information about the revenues the company pays to local and national governments, leaving communities unable to hold their governments accountable for how mining revenues are used.
"Newmont has been a leader in committing to greater transparency and can help address community concerns about revenue sharing by recommitting to disclose all payments made to host governments," said Offenheiser. "Endorsing mandatory public disclosure policies like the Extractive Industries Transparency Disclosure Act would be an important first step."
Oxfam advocated passage of the Extractive Industries Transparency Disclosure Act, legislation that would require all mining, oil, and gas companies registered with the Securities and Exchange Commission to disclose the payments made to foreign governments. The bill, which was introduced by House Financial Services Committee Chairman Barney Frank (D-MA) in the 110th Congress, is expected to be reintroduced shortly.
]]>"Adopting a regional mining policy directive is an important first step toward strengthening regional protections for the basic rights and livelihoods of mining-affected communities in West Africa and ensuring that these countries' mineral resources contribute to their sustainable development," said Raymond C. Offenheiser, president of Oxfam America.
Ministers from 11 West African countries met on April 17 in Abuja, Nigeria to review a draft mining directive that covers a broad range of financial, social and environmental issues relating to the industry. The draft was developed by the ECOWAS Commission with input from government officials, civil society organizations, and communities affected by mining.
Revenues from the mining industry form an important part of the economies of many West African countries. However, these revenues do not always translate into benefits for citizens. For example, Ghana is the second-largest gold producer in Africa—producing 2.5 million ounces of gold in 2007—but nearly 80 percent of Ghanaians are living on less than $2 per day.
The ECOWAS member countries currently have individual mining policies, but the need for foreign investment often leads to competition by offering tax reductions and exemptions, which deprives countries of sustainable benefits. A strong common policy is needed to ensure that the mining industry respects the rights of local communities and the environment and contributes to sustainable development.
"Oxfam is particularly encouraged by the mining directive's clear provisions for the protection of the human rights of local communities. This includes their right to free, prior and informed consent, which gives communities a meaningful role in decision-making about mining projects that would affect them," said Offenheiser. "We also applaud the directive's support for the disclosure of financial and environmental information relating to the mining sector."
Too often, mining industry contracts and revenues are kept secret. This lack of accountability facilitates embezzlement, corruption and revenue misappropriation leading to the industry's failure to alleviate poverty in West African countries. Measures to improve transparency in the directive will go a long way to inform the public about mining revenues. This will enable communities to hold governments accountable for using revenues to support vital services like healthcare and education.
However, the directive does not cover all the critical issues relating to the impacts of mining on affected communities. In particular, Oxfam believes the environmental protections can and should be further strengthened.
"Oxfam calls on the ECOWAS member states to engage with relevant stakeholders, particularly civil society and affected communities, to work to implement the directive and further strengthen legal provisions to increase transparency and protection of human rights and the environment," said Offenheiser.
Back in 2007, ECOWAS requested Oxfam America's involvement based on the organization's experience and expertise in the mining sector. Throughout the process, Oxfam worked to facilitate civil society's participation in the formation of the mining directive. More than 50 West African civil society organizations from 11 countries joined and participated in the formulation process.
]]>This decision, reported by the Ghana News Agency, comes a week after the release of a report by Oxfam America and its local partner, the Integrated Social Development Center (ISODEC), on the challenges posed by Ghana's coming oil boom. The report, Ghana's Big Test: Oil's Challenge to Democratic Development, recommends, among other things: transparency of payments from oil companies to governments as well as disclosure of all petroleum agreements; open and competitive licensing procedures for oil and gas blocks; the active participation of civil society; and the establishment of an appropriate legal and institutional framework for the industry.
"This commitment by the government should be commended. In too many countries, petroleum agreements governing the sale of public resources have been kept secret. The new administration should build on this step to increase openness for more citizen participation in the formulation of public policy. In the case of oil, participation on the part of the people and of civil society has thus far been limited," said Ibrahima Aïdara, coordinator of the Extractive Industries Program in Oxfam's West Africa Regional Office based in Dakar, Senegal. "In addition to ensuring full transparency and public participation in the oil and gas sector, the government should also take steps to improve the management of the gold mining sector."
Steve Manteaw, media and campaigns coordinator for ISODEC, said: "President Mills has taken an important step to preserve Ghana's record of good governance and stability by preparing Ghana to support accountable and efficient development of the oil industry and the billions in government revenue it will generate."
The International Monetary Fund has predicted that government revenues from oil (producing approximately 120,000 barrels a day by 2011) and gas could reach a cumulative $20 billion over a production period of 2012-2030 in Jubilee field alone. The field gets its name from the discovery of oil there at the time of Ghana's 50th anniversary as a nation.
The Ghanaian president's commitment is in line with the objectives of Oxfam America's Right to Know, Right to Decide campaign focusing on greater transparency and the right of communities to have a say over how and whether oil, gas, and mining projects go forward. The emphasis on transparency and public participation is also a cornerstone of Oxfam America's efforts to increase public and civil society participation in the development of a regional mining convention being developed by the Economic Community of West African States (ECOWAS).
Since last year, ECOWAS has been in the process of developing a mining convention that would promote common social, environmental, and transparency standards in the mining region across West Africa. Civil society is participating actively in the process and is ensuring that the concerns of the citizens, especially communities near mining projects, are taken into account.
"The new government in Ghana has a chance to take a fresh look both at preparations for the oil boom as well as the historical legacy of increased conflict and social and environmental impacts from gold mining production. The agenda for reform is both broad and deep, but the commitments by the new president are an important step in the right direction," said Aidara.
]]>Ghana's recent discovery the major offshore "Jubilee" oil field has generated enormous interest in the country's oil production potential. While this would seem to be good news for Ghana, historically, the exploitation of natural resources in Africa has far too often led to increased poverty and conflict, a phenomenon often referred to as "resource curse."
"In too many countries, oil booms have bred corruption, underdevelopment, social conflict and environmental damage. Ghana's challenge as an 'oil hot spot' will be to ensure the right institutions and transparent policies are in place before production even begins," said Ian Gary, Senior Policy Advisor for Extractive Industries at Oxfam America and author of the report Ghana's Big Test: Oil's Challenge to Democratic Development, which will be introduced today at the Royal Institute of International Affairs in London.
The report identifies critical steps for the Ghanaian government, donors, oil companies, civil society and journalists to take in order to move quickly but deliberately in the face of the coming oil boom. These include transparent revenue and payment practices, open and competitive contract bidding, and active monitoring and participation by civil society. The report also recommends that the government enact a moratorium on signing new licenses, so they can organize an open bidding round and allow the country's legal and institutional framework to "catch up" to the pace of oil development.
"While these steps are not, by themselves, a simple recipe for overcoming the threats posed by the coming oil boom, it is difficult to see Ghana succeeding without them," said Gary.
Last year, Africa produced 12.5 percent of the world’s oil with great investment and exploration throughout the continent, but this has yet to translate into tangible benefits for Africa's poor. In fact, resource-rich countries in Africa have actually experienced lower growth rates than countries with scarce resources.
Ghana is one of the most peaceful and relatively prosperous countries in West Africa but remains poor with almost 80 percent of Ghanaians living on less than $2 a day. After democratic elections and a successful transition of power last month, Ghana’s new National Democratic Congress government hopes that oil revenues will help accelerate the country’s effort to meet UN Development Goals by 2015.
By 2011, estimates are that Ghana will be producing approximately 120,000 barrels of oil per day, along with significant quantities of gas. (The Jubilee field has 600 million barrels of proven reserves and 1.2 billion barrels of probable reserves.) The International Monetary Fund has predicted that government revenues from oil and gas could reach a cumulative $20 billion over a production period of 2012-2030 in Jubilee field alone. On Feb. 19, The World Bank board will consider $215 million in financing to Kosmos Energy and Tullow Oil in support of the development of the Jubilee field.
"Ghana's enviable record of good governance and stability makes this test even more urgent. Oil wealth threatens the growing democratic accountability that has been built in our country's recent history," said Steve Manteaw, media and campaigns coordinator for ISODEC. "The history of natural resource exploitation in West Africa has shown us just how vulnerable the people of Ghana will be without sufficient systems to properly manage oil wealth."
Ghana is no stranger to the natural resource industry. During the British colonial era, Ghana was known as the "Gold Coast" for its prolific gold deposits. With mining law reforms and changes to investment rules in the last 20 years, Ghana has recently experienced a boom in mining investment. But gold mining has led to small government revenues, increased conflict between companies and local communities, the removal of families from their lands, and increased environmental degradation. Coastal communities have seen how this industry has left mining communities, and they fear the same fate.
The problems of resource-rich countries combating the "resource curse" have recently risen to the top of the international development agenda with efforts to increase revenue transparency across the oil, gas, and mining industries. The report is being released on the eve of the fourth global conference of the Extractive Industry Transparency Initiative (EITI) taking place in Doha from February 16-18. EITI is a voluntary initiative designed to increase transparency of payments by companies to governments. While some progress has been made, the EITI has had limited reach. Ghana has published reports under this initiative, but has not been fully committed to extend this work to the petroleum sector. In the United States, the Extractive Industry Transparency Disclosure (EITD) bill was introduced in the House and Senate in 2008. This legislation, expected for reintroduction in 2009, would require all oil, gas, and mining companies registered with the SEC to disclose their payments to host countries and extend transparency as a truly global standard for company operations.
"While some progress has been made to increase transparency in resource-rich states, secrecy around revenues is just one part of the resource curse, and much more work remains to be done to prepare Ghana for the coming oil boom," said Gary.
]]>Photographer Ed Kashi captured images like this as part of his new book, "Curse of the Black Gold: 50 Years of Oil in the Niger Delta." His photos were on display last week at John Hopkins University as part of a panel discussion of a new report assessing US and international efforts to overcome the "resource curse." The report, which is based on months of research in the field by the Senate Committee on Foreign Relations committee staff, explores the paradox where countries rich is natural resources become poorer once they are extracted.
Oxfam's Ian Gary, Senior Policy Advisor for Extractive Industries, spoke as part of the panel, describing how African countries like Chad have been unable to translate their oil reserves into revenue that reduces poverty by building health clinics, schools, roads, and other infrastructure.
"Despite the promises, little money has trickled down to villagers near the oil field in southern Chad and fighting in February between rebels and the government decimated the capital, forcing tens of thousands to flee, including many civil society activists who had sought to hold the government accountable in the spending of oil wealth," Gary said.
So, what's the solution? Panelist Michael V. Phelan, a professional staff member of the Senate Committee on Foreign Relations, said that he believes it is important for citizens to know their rights and responsibilities and to exercise those to hold their government's accountable. During the course of their research, the Senate staff members found problems in many countries where Oxfam America is working, including Peru, Ghana and Cambodia, and consulted Oxfam field staff and partners in these and other countries.
Oxfam is working to require oil, gas, and mining companies to consult with local communities, and share information with them about their revenues and operations. One vehicle for this is the Extractive Industries Transparency Disclosure Act, legislation that is expected to be introduced in the next session of Congress that requires oil, gas, and mining companies to publicly disclose how much they pay governments to use their natural resources.
Full disclosure is important because companies and governments often keep their revenues a secret, which leads to financial mismanagement and corruption. When local people know more about the oil, gas and mining projects taking place in their backyards, they can claim their fair share for community needs—like education, health care, and jobs.
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