Revista CIDOB d'Afers internacionals nº 130

Oil in times of democracy: debates on extraction and politics in Ghana

Publication date:
04/2022
Author:
Alicia Campos Serrano and Ángeles Sánchez Díez
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The discovery of oil in 2007 in Ghana came in a time when elections had shown the capacity to allow for alternation of two main political parties in government. The main objective of this article is to investigate the terms of the debates that have been developed in regard to the relation between natural resources and democracy in the country. Three main issues have been addressed: the capacity of democratic institutions to condition and configure the social and political effects of the oil industry in the country; the potential perverse effects of oil extraction on democratic institutions; and the role of international arena and actors in the constitution of the political economy of oil in Ghana. 

In 2007, on the eve of the fifth multi-party elections in Ghana, the U.S. transnational company Kosmos Energy announced the discovery of oil deposits in the waters along the Western Region coast. A joint venture was formed between foreign private oil companies —namely Kosmos, the British Tullow Oil, and the American entities Anadarko Petroleum Co. and Sabre Oil and Gas— and the Ghana National Petroleum Corporation (GNPC). Only three years later, oil was extracted from the Jubilee Field and being commercialized in world markets; the accompanying gas would be dedicated to feeding the national electricity network through a processing plant in Atuabo.1

Since this development, 18 contract areas have been established in the Ghanaian Exclusive Economic Zone (Figure 1), additional fields have been discovered,2 and more foreign companies have entered the industry.3 Only a Ghanaian private company, EO Group, later acquired by Tullow Oil, secured minor participation in the initial agreements; others such as Springfield Group or Star Africa participate providing technical and logistical services. A semi-public group, Ghana Oil Company Limited (GOIL) has recently moved beyond marketing and distribution to exploration activities in partnership with Exxon Mobile. Exploration activities have also been promoted onshore in the Voltaian basin. In 2020, the total production amounted to almost 67 million barrels of oil and almost 238,000 MMSCF of gas, which provided 639 million $US in state revenues. (It must be noticed that these data are inferior to the 925 million in 2019, due to oil lower production and the effects of COVID-19 pandemic). (PIAC, 2020).

The first discovery of oil in 2007 occurred during the administration of President John Kufuor of the National Patriotic Party (NPP). Kufuor had come to power in 2000 through the first peaceful alternation after the establishment of a multi-party electoral system in  the early 1990s. But in 2008, the NPP party lost the elections and was replaced by the Atta Mills government of the National Democratic Congress (NDC).4 During this administration and that of John D. Mahama of the same party, oil extraction effectively commenced, and the consequent revenues reached the public coffers. This outcome did not hamper the return to political alternation in 2016 elections, through which Nana Akufo-Addo (NPP) became Ghanaian president.5

Figure 1 afers_130 Oil

From the outset, the expectations that oil rents and electricity from gas would contribute to prosperity and development of the country, were mixed with advice regarding the possible perverse effects of the new extractive industry in the economy, the environment, and the political system. The press was a privileged site for the  public articulation of these anxieties, as the first section of this paper illustrates. They oil question have also produced an academic literature both inside and outside Ghana, and that constitutes the object of the second part of this article. we will distinguish the debates generated around three different yet interrelated questions: can Ghanaian democracy prevent the most perverse effects of the oil industry; will hydrocarbon extraction affect the functioning of the democratic system; and how do transnational structures and actors affect the political economy of oil in Ghana? 

Dreams and fears: oil discovery in the Ghanaian press

In an interview with the BBC, President Kufuor (NPP) eloquently expressed in 2007 the high expectations that resulted from the discovery of oil: «We're going to really zoom, accelerate, and if everything works, which I pray will happen positively, you come back in five years, and you'll see that Ghana truly is the African tiger, in economic terms for development.» Kufuor wanted to immediately confront any skepticism: «Oil is money, and we need money to do the schools, the roads, the hospitals. If you find oil, you manage it well, can you complain about that?» (BBC, 2007).

It initially seemed that his optimism was shared by many people in Ghana.6 In an early academic work on oil in Ghana, Tom McCaskie has noted that in the days following the announcement of the discovery, «[c]hurches held services of thanksgiving for the discovery of oil» and religious language was prominent in expressions of hope regarding the new resource. «Thank God. Oil at last. Thanks God» was the title of an article appeared in Accra Daily Mail on 20 June 2007 that illustrated this euphoria as well as the extensive use of «providential language» (McCaskie, 2008: 324).

However, concerns about potential perverse effects of the oil extraction emerged almost simultaneously. The press was especially cautious toward the high expectations that were generated. Religion provided some of the terms and spaces for articulating early social anxieties.7 Dichotomies such as blessing or curse, dreams and fears, success or failure, or benefits and nightmares were common rhetorical devices for expressing the possibility that the extraction of the new natural resource could pose less-than-positive implications for the wellbeing of the people or political stability (Modern Ghana, 2008; Daily Guide, 2009; Prempeh,2008; DailyExpress, 2008).

The basis of these concerns was usually a comparison with oil-rich neighboring countries. According to Kofi Akosah-Sarpong, «[as] Equatorial Guinea, Nigeria and Angola negatively exemplifies, the pillaging of natural resources is at the heart of Africa’s economic tragedy (...) making assets for citizens prosperity embezzled for the enrichment of the few». (Akosah-Sarpong, 2010). Even the Minister of Information, Kwamena Bartels, seemed to be aware of these dangers, as he announced the formation of six visiting teams to dispatch to oil-producing countries in order to learn «what did they do wrong and what did they do right, so that we don’t fall into the same pit» (Clottey, 2007).

The long history of gold extraction in Ghana was also mentioned to exemplify that mineral richness does not necessarily imply improvements to the livelihood of the majority of population in areas of production or the country as a whole (Adjoa Hackman, 2010). Writing on the aforementioned announcement by the Minister, Akwasi Prempeh suggested that «Mr Bartels ought to have learned some useful lessons in the past from how Ghana has received the short end of the stick over the years in relation to the exploitation of the country’s other mineral resources such as gold, bauxite, diamond and manganese, and forest products like cocoa and timber» (Prempeh, 2008).

By the time that oil extraction commenced in 2010, a different government was in place, and these concerns seemed to be overtly incorporated into official discourses. During the ceremony for the first pumping of Ghana’s oil on December 15, 2010, President Atta Mills (NDC) added a degree of prudence: «called on all appointees of his government to ensure that the oil find is a blessing to Ghanaians and further stressed that we as a nation are assuming very serious responsibilities hence the need to work hard and not rest on our oars» (Alagbo, 2011).8 

Some of the press started also to reflect on the social consequences of the new industry in the Western Region, which included the reduction of fishing areas, the expropriation of farmlands for the construction of oil facilities, and a rise in living costs in the regional capital, Sekondi-Takoradi (Alagbo, 2011; Yeboah, 2015). But more interesting for our analysis, journalists debated from the onset on the political economy of oil. One general point was that democracy in Ghana would be a bulwark against the worst excesses of the oil industry. As Akosah-Sarpong stated: «From the on-going oil debates, Ghanaians are drawing hard lessons from the international system. How these tough lessons would help Ghanaians benefit from their probable oil revenues will be determined by the enforcement of their emerging democratic tenets» (Anzagra, 2010).9

Thus, democracy has been considered not only a guarantee against the curse but in fact a necessity to secure the public blessing; for Anzagra, «oil with democracy is the right dosage of medication that Ghana needs for the treatment of its perennial sickness of many of her populace living under chronic poverty» (Anzagra, 2010). In the same vein, Alagbo (2011) sustained that «if Ghana can safeguard her democratic rule...then yes, Ghana once again can show that oil and other natural resource finds can be a blessing and not a curse.» Meanwhile, the economist Kwamena Essilfie Adjaye has been quoted by modernGhana in reference to the auspicious timing of the oil extraction: «It's good we are getting it when we are getting it, because we have this burgeoning democratic experience (...) It's coming at a time when it's likely to be spent better than it would before» (Daily Express, 2008).

Political authorities have publicly presented a similar argument. According to President Mahama (NDC), «[t]he major insurance we have that makes me confident is that we are producing oil at a time when we have deepened democracy, which ensures transparency and accountability» (GhanaWeb, 2011). Years later, while participating in a conference at Yale University, President Akufo-Addo asserted more generally that «[d]emocracy and freedom are providing the political, social, and economic platforms for Africa’s long-awaited development» (Guzman, 2018).10

Nevertheless, beyond the consensus regarding the value of Ghanaian democracy for the righteous management of oil, the press has seemingly been less indulgent of politicians and specific institutions and regulations. Journalists in Ghana have periodically denounced the pervasive corruption at multiple levels of the government (Kwarteng, 2016). An important case, prior to the commencement of the oil extraction, concerned a former Chief Executive of the Ghana National Petroleum Corporation, Tsatsu Tsikata (Ghana Oil Watchdog, 2009). Other dispute that has been reproduced by the press involves accusations of connivance between politicians and business in the review of the oil agreement with AGM and Aker Energy in May 2019 (Daily Guide Network 2019: Jafaru, 2019).

Alongside with civil society groups and other actors, the press has also supported the demand for new and improved norms regarding oil contracts and revenue regulations (Alagbo, 2011). The beginning of the oil extraction immediately prompted criticism because new laws were not already in place, and Ghanaians were therefore not ready for the oil (TodayGh Editorial, 2010). Calls for more transparency and poverty reduction policies were common among articles on oil and democracy (Prempeh, 2008; Alagbo, M.K., 2011; Agyare, 2010). In the words of Attah-Brako «the government shoulders the responsibilities to fight poverty and inequality through putting in place required policies based on transparency in the management of the revenue» (Attah-Brako, 2011).11

As will be noted, Ghana's Parliament has approved various laws since the initial articulation of these demands, and the political class has increasingly adopted a language of transparency (Ghana News Agency, 2016. 

Oil and democracy in academic debates

Soon after the oil discovery was announced in 2007, academic publications appeared in the specialized literature addressing the new topic. The adverse social and environmental effects of the arrival of transnational companies in the Western Region have generated important analysis (Franklin Obeng-Odoom, 2014; Adusah-Karikari, 2015; Abigail Ackah-Baidoo, 2013; Moses Adjei, and Ragnhild Overå, 2019).12 Nevertheless, our focus is on the debates around the political economy of oil in Ghana more generally.

We have identified three different inquiries regarding the implications of oil extraction for Ghanaian politics. The first is around whether democracy and specific institutions and regulations can make a difference in the impacts of oil on the wellbeing of the population or the rest of the economy. Conversely, the second inquiry considers the potential or actual influence of the oil industry and the rents that it generates on political dynamics in the country. The third concern extends beyond the national framework to explore other political relations, namely those between government and international actors and structures. Basically, these debates try to answer three different questions: How can democracy configure the social and political effects of the oil industry? Has oil adversely affected democracy? In which ways have transnational actors and structures interfered with the social contract between Ghanaians and their rulers? 

«Good governance» as a bulwark against the resource curse

Appropriate national regulative and organizational scaffolding, which includes the disclosure of mineral or oil agreements and an active role of Parliament, civil society and media, are the means by which populations can benefit from the rents and revenues from the extractive industries. These remarks summarize the main perspective of most advocacy and politically oriented documents that were commissioned by international governmental organizations such as the World Bank, and NGOs such as ISODEC and Oxfam, soon after the discovery of oil in the Western Region (World Bank, 2009; Gary, 2009). We have already found them in the press. It is also the logic behind the Extractive Industries Transparency Initiative (EITI) and the Publish What You Pay transnational campaign for a more sound and transparent public management of oil and mineral rents. This approach, which some scholars have called «liberal institutional management» relates to the good governance framework that has pervaded international development agency discourses since the 1990s (Phillips et al., 2016).

Many scholars have engaged in a dialogue with this literature. Eyene Okpanachi and Nathan Andrews (2012) have examined the dominant institutional arrangements in Nigeria with the aim of proposing «likely paths that Ghana can take to avoid the resource curse». (p.  432). Their analysis considers the legal framework of agreements between the government and the oil companies in addition to the management of oil revenues, distributive policies, the corporate social responsibility of companies, and the role of civil society in the Nigerian political economy of oil. In their final remarks, Okpanachi and Andrews (p. 446) also recognize the importance of other non-institutional conditions, such as political will or the international political economy of oil, for the effectiveness of those measures.

Since the provision of such recommendations, some laws have been approved that create a partial normative framework for the management of oil and gas, which is partly informed by those «international best practices» as well as previous Ghanaian experiences with gold mining (CSPOG-GH, 2011). A National Energy Policy was already implemented in 2010. The following year, an Act of Parliament (Act 821) established a Petroleum Commission as an independent body for the regulation and management of petroleum resources and the coordination of sector policies (Gyimah-Boadi & Prempeh, 2012).

Furthermore, in 2011, the Petroleum Revenue Management Act (Act 815) established two funds in order to reserve a portion of the oil rents for economic contingencies (Stabilization Fund) and future generations (Heritage Fund). The act also founded a Public Interest and Accountability Committee (PIAC), which publishes periodic reports on the use of oil rents.13 The Petroleum (Local Content & Local Participation) Regulations, which were approved in 2013, seek to ensure that regional and national private sectors capitalize on the economic opportunities that the oil industry offers.14 In 2016, the Petroleum Exploration and Production Law (Act 919) established a due process for contracts between the government and oil companies; this process includes transparency measures as well as open and competitive bidding for oil blocks.

Polish researchers Dominik Kopiński, Andrzej Polus, and Wojciech Tycholiz (2017: 601) have described these developments as «a strong and well-designed institutional framework that increases its chances of escaping the so-called natural resource curse».. They have also stressed the roles of numerous social organizations in overseeing state policies: a Civil Society Platform on Oil and Gas that was formed in 2010 has been attempting to monitor the government and offer input in the elaboration of different norms. On the other hand, PIAC is presided over by representatives of social organizations (PIAC Ghana, 2020). The participation of Ghana in the EITI, which aims to monitor deals between the government and oil companies, has also granted these organization a permanent forum, namely the GHEITI (Ghana EITI), in which to confront the government about these issues.15

However, not everyone has been optimistic. For instance, Kwesi Amponsah-Tawiah, Kwasi Dartey-Baah, and Kobena Osam (2015: 127) consider that a suitable «institutional arrangement in the hydrocarbon industry is vital in turning potential collision to cooperation». But they have denounced the secrecy of the majority of oil agreements between the government and international oil companies, which had been signed prior to implementation of the due legislation. They assign special relevance to the local chiefs, who «offer a platform for engagement to discuss grievances to avert possible conflicts» but can also «serve as a mobilization point for resistance movements, and violent activities against oil companies» (ibídem: 127).16

In personal interviews, Amponsah-Tawiah and Dartey-Baah have expressed an additional and controversial concern in relation to democracy: the electoral alternation in power can hinder the structural transformations that are vital for the oil to benefit the majority of Ghanaians. A similar view has been advanced by Daniel Kwabena Twerefou, who has acknowledged that «we need democracy, but it does not help» in formulating long-term policies that can add value to oil extraction.17 Franklin Oduro and Mohammed Awal from the Ghana Center for Democratic Development (CDD-Ghana) also acknowledged that in spite of the wide legitimacy of elections among the population and its relevance for democratic politics, they do not provide due predictability: especially since one of the «favorite sports» in Ghana is to change the entire administration once a new party arrives in the government. Such changes extend to the presidency of GNPC, which has become a main source of revenues for the government.18

Other authors have openly challenged the shared notion that Ghanaian democracy is an asset for correct management of the oil industry and revenues. For example, Sam Hickey, Abdul-Gafaru Abdulai, Angelo Izama, and Giles Mohan (2015) have maintained that Uganda, which observes a less democratic political order, has achieved a greater benefit from oil industry compared to Ghana. By utilizing the political settlement framework of Mushtaq Khan (1995 & 2018) as an alternative to the institutional approach, these authors have highlighted the political networks and coalitions that condition the political order beyond the formal institution and regulations. Uganda would have a dominant party political settlement. As for Ghana, they define its political settlement since 1992 as «a form of competitive clientelism», wherein the political elites and their expansive personal networks are organized into two main parties, which rotate in power through elections (Hickey et al., 2015: 5). Thus, «[t]he short-termism generated by the strong likelihood of electoral turnovers has resulted in a highly politicised public bureaucracy» that does not favor «structural transformation, socio-economic equality and institution-building» (ibídem: 7-8).

Nevertheless, these authors also recognize the role of ideological divergence for the management of oil. From 2000 to 2008, the NPP tended to prioritize the attraction of foreign investments, which reduced the government share of oil rents and weakened the Ghana National Petroleum Company (GNPC). When the NDC regained power in 2008, it adhered to a more «resource nationalist approach» and strengthened the role of the GNPC in the oil sector. According to Abdulai (2014), parliamentary debates over how to spend oil revenues have also been driven by a mixture of political ideas and partisan interests In a sense, these last authors are reviving the neo-patrimonialism literature on African politics that emerged in the 1980s (Medard, 1992; Bayart, 1993; Jackson & Roseburg, 1983; Chazan, 1983).19 Their work illuminates the relevance of the informal relations that traverse the formal rules that Okpanachi, Andrews and others want to highlight. 

Is the Ghanaian democracy at risk?

On the eve of the start of oil extraction, Ransford Edward Gyampo, of the Political Science Department in the University of Ghana, Legon, expressed serious concerns about the effects of such activity on the young Ghanaian democracy. In particular, he highlighted the capacity of the oil industry to foster tension and conflict in the control of the state. The urgency to pump oil without adequate preparation and regulations in addition to «the opacity and marginalization of the opposition political parties, as well as civil society organization in the preparatory processes» prompted the author to call for a moratorium and express his fear of an anti-democratic drift, which could involve violence and chaos (Gyampo, 2011: 99). He detected early symptoms of oil affluence increasing political competition during the parliamentary debates due to the demand for 10% of revenues by local authorities of the Western Region as well as the collateralization of oil revenues to obtain a loan from China with the NDC in government.

Emmanuel Gymah-Boadi and Henry Kwasi Prempeh of the CDC-Ghana have similarly warned that oil may intensify political competition. Both the contracts between the government and oil companies and the first regulatory advances that were initiated by the NPP were called into question by the NDC when the party came to power in 2008. These authors also denounced the rush to develop the Jubilee Field in addition to the aforementioned collateralization of revenues, which indicates that both parties have sought to «gain access to as much oil money as possible and as quickly as possible» (Gyimah-Boadi & Prempeh, 2012: 105).

These two authors have posited that the weakness of democracy due to oil extraction derives from the competitive and clientelist character of Ghanaian politics already mentioned, which features extreme factionalism and partisanship. Oil rents can reinforce an already acute presidentialism, which allows the new head of state to appoint an astounding number of administrative positions, even institutions that are designed to control the government. The Parliament’s oversight capacity is also inadequate because ministers must be appointed from among the same parliamentarians. For their part, despite the notable strength that Ghanaian social organizations have exhibited in comparison to other countries in the region, they are dependent and vulnerable to the agendas of transnational organizations or the World Bank.

That being said, Gyampo emphasizes that «many Ghanaians, including politicians and policymakers» are aware of the dangers of the resource-curse syndrome and the potential for the involvement of civil society in the Oil for Development Forum, which convened local and transnational NGOs, parliamentarians, academics, and local community representatives in February 2008 (Gyampo, 2011: 65). This event was the first step in the creation of the aforementioned Civil Society Platform on Oil and Gas, which was a driving force for the various laws and regulations of the oil industry that have since been approved.

Still, there has been a more optimistic prognosis regarding democracy in Ghana. Christoph Buchberger’s (2011) analysis of the political institutions and the measures that had already been adopted to avoid the resource curse recognizes the «serious lack of checks and balances» and the «winner-takes-all character of political contest» through which «everything is highly politicized», from the civil service to the allocation of projects (pp. 9-11). However, although the avoidance of polarization and friction and the use of oil revenues for equitable development are not assured in Ghana, the author maintains that the high attachment of the population to the democratic rule, regardless of the party in government, will provide a bulwark against its degeneration, at least in the short term. Furthermore, he has forecasted that oil revenues will open the political space in the country, thereby granting the government more autonomy from international donors when making political choices.

The most sanguine of all authors is undeniably Ehis Michael Odijie (2017) from the University of Cambridge. He has utilized the political settlement framework to arrive at conclusions that differ from those of Hickey, Mohan, Asante, and Abdulai. Specifically, he has asserted that institutions reflect, rather than obscure, «the political distribution of power in society» and constitute the rules by which political elites and other social actors develop their practices. Because a multi-party democratic system was in place at the time of the oil discovery, oil politics have been channeled through more democratic forms than would be the case in a different political context.

Moreover, Odijie has argued, as Buchberger did, that certain dynamics due to the exploration and pumping of oil are fostering democracy rather than undermining it. The consolidation of democratic rule in Ghana could be supported by a multitude of factors, including the freedom of the press in its analysis of oil politics,20 the ideological confrontation between the dominant parties and the two effective alternations in power since 2007, the consolidation of the Civil Society Platform for Oil and Gas, the independence of the Public Interest and Accountability Committee in its reports on the government's management of petroleum revenues, and the strengthening of government in view of local and foreign pressures.

Somewhere in between, there is the argument by Franklin Oduro, Mohammed Awal & Maxwellet Agyei Ashon (2014) that «the weak institutional oversight and the corroding patronage politics» favors neither stability nor the structural transformation that is needed to arrive at more inclusive development and social democracy (p. 23). On the other hand, they have acknowledged that the high interest and expectations regarding oil may empower civil society and media groups and encourage political parties to become more programmatic and less clientelistic in addressing voter demands. These are all forecasts that will require more time and data in order to be debated. 

What about international actors and world structures?

Many of the aforementioned authors have referenced the role of transnational actors, such as oil companies, transnational NGOs or donor and creditor governments. However, some works have focused specifically on these transnational actors and the larger world structures in which oil extraction and commercialization take place.

One of the first academic papers on Ghanaian oil commenced its analysis from the perspective of U.S. policies. In 2008, the historian Tom C. McCaskie maintained that the oil boom in Ghana could not be wholly understood without attention to the growing U.S. interest in the Gulf of Guinea as an alternative to other productive regions as well as the U.S. security policy and its search for an AFRICOM headquarters.21 In this context, the small independent company Kosmos Energy prepared to assume the risk of exploring the Exclusive Economic Zone of Ghana and signed the first agreement with the government in 2004.

Nevertheless, the US is not the only significant power whose politics have conditioned the economic activities in Ghana. The Chinese government and Chinese investors have also been key actors, and their relation and competition with the U.S. power have partly configured the international arena in which Ghanaian oil richness has been created and distributed. At the time of McCaskie’s article, there was a major Chinese presence as the financer of the Bui Dam on the Black Volta River. In the following years, a Chinese bank loan, which was collateralized with Ghanaian oil, was a vital source of resources and incited political confrontation. McCaskie (2008) was the first to situate Ghanaian oil discovery within «the larger arena of international business competition and (...) US-China relations» (iídem: 330).

Other works have investigated the insertion of transnational companies into the social dynamics of the Western Region by means of not only indirect social impacts but also their investments in the framework of the local content legislation and their corporate social responsibility. Some authors have pursued this question and problematized the extent to which Ghanaian actors benefit from the oil industry through these policies (Ablo & Overå, 2015; Ablo, 2015; Mohammed, 2019).

In contrast, other authors have adopted a more structuralist approach. Jasper Ayelazuno (2014: 66) has contributed to the debate by incorporating «the global political economy underpinnings of the resource curse in Sub-Saharan Africa» and  strongly criticizing the liberal institutional approach because it normally does not account for the broader structures of the world economy. The concentration of Ghana's economy on mineral and oil extraction is perceived as part of a global political economy that forces African countries to remain non-industrialized and leads foreign investors to focus not on manufacturing but on extractive industries.

Ayelazuno’s critique recalls classical underdevelopment literature such as Samir Amin’s work (1972) on uneven capitalist development in addition to more recent scholarship on globalization, such as the research of James Ferguson (2006), who has noted that mining industries establish capitals to «hop» rather than «flow», thereby creating enclaves with few linkages or spillovers to the rest of the economy. Ayelazuno (2014: 72) has advocated for further structural and radical policies and has urged the social movement «to pressurise the state and the companies to localise most or the value chain in Ghana particularly the refining industry».

The work of Jon Phillips, Elena Haiwood, and Andrew Brook (2016:1) from King's College London has also discussed «Ghana's recent insertion into the global political economy of oil». They continued McCaskie’s historical recollection of the relations between the government and oil companies and the political tensions that they induced between the two main parties. The first agreements between Kosmos and the government, the role of the private E.O. Group and public GNPC, and the possibility for a Chinese company to enter the Ghanaian oil industry have all been heavily contested in the political context of electoral alternations in power.

These authors have also highlighted the influence of liberal institutionalism and the good governance discourse as a common language of international organizations and local civil society alike and as leverage in the relation between the former and the government. The liberal discourse, they maintained, poses major limitations to addressing dimensions such as the distribution of oil benefits or the role of «global political economic factors». This work struggles with the difficulties of focusing on «the global» while attempting to provide an account of the strategies of a variety of actors. But is the only contribution to introduce the importance of the sovereignty principle for relations between the government, oil companies, and international organizations.22

The work of Mohan and Asante (2015) is less structuralist in its approach to assessing the significance of transnational actors for Ghanaian domestic politics. These authors analyze the fate of the competitive clientelism, which has intensified with the arrival of foreign corporationas and the prospect of new resources to distribute. Issues such as the role of national corporations vis a vis foreign and domestic private companies, the share of the state, the participation of civil society, and the patterns of revenue allocation have prompted confrontations between the two main parties.

On the other hand, the need for revenue distribution that clientelism implies, provides great deals of leverage to foreign companies and governments in their relations with Ghanaian politicians. This secures them with optimal bargaining conditions, such as in the case of oil agreements or the collateralization of oil for Chinese credit. However, local elite strategies and existing political arrangements keep being decisive for the internal dynamics in the country. All this is reminiscent of the extraversion dynamics that Jean-François Bayart (2000) has highlighted, in which dependency provides local elite with powerful tools in their domestic political relations. 

Final considerations

The Ghanaian deliberation on the political implications of hydrocarbon extraction is contributing to a better understanding of the interconnections between states and transnational markets, between export economies and national politics. This state of the art has highlighted the debates —explicit in some cases and more latent in others— which traverse this academic production. We have identified three main issues of concern: the role of democratic institutions and dynamics in conditioning the social  and political effects of extraction; the impact of extraction on the quality of democratic dynamics; and, finally, the place of transnational actors and arenas in the constitution of Ghanaian political order. And we have also noted the lack of agreement on these three issues.

On the one hand, Ghana's democratic institutions and the oil regulations so far adopted since oil was first discovered, seem to have helped to avoid the worst predictions for the economy and the politics or the country; but the populations of the Western Region have already suffered some of the usual perverse effects of the massive influx of capital and transnational corporations. Secondly, alternation in power has keep going through elections since 2000, and civil liberties have not witnessed a significant setback since the discovery of oil; however, some authors have pointed to the strengthening of the clientelism of parties and public administration. Finally, it has become clear that it is essential to analyze the political and social processes occurring in Ghana and its Western Region in the broader context of regional and global geopolitics and economy, even if the weight of external actors on the decision-making of Ghanaian politicians and other local actors is much more difficult to assess.

The various positions identified in these debates can be placed along two main axis. The first ranges from an emphasis on institutions to a focus on personal networks. The outermost institutionalist position, such as the so called “liberal institutional management” (Philips, 2016: 26), considers social processes to be configured mainly by the regulations and rules that are in force. The other extreme, such as the “political settlement approach”, entails a conception of social reality as a tight net of interpersonal relations between individuals and groups, whose differentiated power and capacity depend on their connection and their location in that web. For authors like Hickey, Abdulai, Izama y Mohan, institutions would only reflect the specific structure of those web-like relations; otherwise, they become irrelevant. In fact, most of the aforementioned authors have integrated institutions and networks in their analyses even when insisting more heavily on one particular element.23

The second axis goes from a focus on state institutions and actors to another on transnational forces. Most of the reviewed studies have adopted a rather statist perspective by concentrating on the strategies of local politicians and social actors and only tangentially considering those of foreign oil companies or international organizations. The few exceptions have attempted to explain national dynamics as a result of the functioning of a global political economy. In the middle of the axis are those analyses that engage with the foreign not as a system but as an array of diverse actors who maintain diverse relations and strategies as well as with Ghanaian politicians and entrepreneurs.

Figure 2 afers_130 Oil

With their different emphasis, these texts as a whole encourage us to consider the four dimensions in their relations with each other - and with other factors such as ideology, also addressed by some of them. From this broad perspective, the internal democratic dynamics are undoubtedly conditioning factors, although they are always influenced by the interpersonal networks between local and foreign actors and their particular interests and strategies. On the other hand, state institutions coexist with a myriad of other institutions, both local and transnational, which also shape the economic and social processes generated by oil extraction in the Western Region.

The passage of time and future research will reveal additional insights regarding many of the relevant issues. For instance, it will demonstrate whether elections continue to function as a social device to periodically change the parties and people in offices and the government. It will also clarify whether future oil discoveries will increase state rents and clientelistic dynamics and competition over its management to such a degree that restrict the political struggle to the point of challenging the electoral device. Finally, it will also prove whether new laws and regulations will support needed investments and social redistribution or territorial and social inequalities will continue to characterize the Ghanaian economy.

Many significant insights have already been obtained, specially compared to those for other countries in the region such as Equatorial Guinea (Sánchez-Díez & Campos Serrano, 2021). The academic deliberation of oil politics in Ghana has advanced understandings of this complex phenomenon as well as theoretical elaborations that can enable fruitful comparisons. It may also help politicians, social leaders, and international organization officials in adopting sound decisions regarding the political economy of extraction.

In this context, the lively and extensive academic debates over the social and political implications of oil extraction that we have systematized, can be considered both a enabler and a result of democratic processes in the country. These debates are also animated by solid transnational connections between Ghanaian academia and research centers and colleagues abroad.  The mere existence of an active, critical and engaged academy, such as the one reflected in this article, undoubtedly contributes to the consolidation of the democratic dynamics that have characterized Ghana's recent history. 

Bibliographical references

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Notes:

1-The possibility to consume the oil within the country was prevented by the low capacity of Tema refinery (at the East of Accra) and the rush with which extraction commenced. (Interview with Agustina Akonnor [antes Adusah-Karikari] professor at Ghana Institute of Management and Public Administration, 1 June 2019, Accra).

2- The main productive areas are known as the (Greater) Jubilee Fields, Offshore Cape Three Points (OCTP) fields, and Tweneboa-Enyenra-Ntomme (TEN) fields.

3- This is the case of the American ExxonMobile South-African PetroSA, the Italian ENI, and the Dutch Vitol, the consortium AGM and the Norwegian Aker Energy. See the Petroleum Register of Ghana’s Upstream Petroleum Sector, https://www.ghanapetroleumregister.com/ (accessed 15 April 2021).

4- The NDC, of social-democratic tendency, was founded by Jerry Rawlings and identifies with the history of Kwame Nkrumah's Convention People's Party, whereas the NPP, of liberal tendency, acknowledges Nkrumah's opponents, J.B. Danquah and Kofi A. Bussia, as historical references.

5- The December 2020 elections confirmed Akufo-Addo in power, in spite of accusations of manipulation by the NDC, which were dismissed by the Supreme Court of Ghana in March 2021.

6- The comments on that piece of news is good example of it: http://news.bbc.co.uk/2/shared/spl/hi/pop_ups/07/africa_ghana0s_oil_discovery/html/1.stm (accessed 5 December 2020)

7- McCaskie (2008: 326-327) also mentions the reaction of Pentecostalist churches and leaders toward the lack of news about the management of oil on the part of politicians.

8- See also Ghana Business News, 15/12/2010 y MacDougall, 17/12/2010.

9- The journalist continued enumerating those tenets: «accountability, freedoms, equality, transparency, the rule of law, human rights, very watchful mass media and an international system that will pressurize Accra to think well about the average Ghanaian’s well-being first and any other second».

10- See also the interview to AlJazeera in November 2017 (AlJazeera, 25/11/2017).

11- See also Yeboah, 30/4/2010.

12- As an example of these concerns, as much as of the cooperation between university centers and activists, a Seminar on Women in oil-affected Communities was organized at GIMPA University by the professors Agustina Akonnor and Abigail Hilson on June 10, 2019. This event welcomed representatives from the Center for Extractives and Development Africa, the Network for Women’s Rights in Ghana, the National Fish Processors and Trader Association, and the NGO Friends of the Nation.

13- Steve Manteaw, the former Chair of the Civil Society Platform on Oil and Gas and a member of the NGO ISODEC who participated in the draft of this law, commented that they were inspired by the institutions of other countries, such as that of Timor Oriental, for control of the government in regard to oil rents. Interview at ISODEC quarters, Accra, 6 June 2019.

14- https://www.bcp.gov.gh/acc/registry/docs/PETROLEUM%20(LOCAL%20CONTENT%20AND%20LOCAL%20PARTICIPATION)%20REGULATIONS,%202013%20(L.I.%202204).pdf (access 6 May 2022).

15- See Ghana Extractive Industries Transparency Initiative https://eiti.org/ghana, and Ghana Publish What You Pay https://www.pwyp.org/pwyp_members/ghana/.

16-  In 2010 local chiefs claimed the direct management of 10% of the oil revenues, similarly to what happens with gold extraction in other territories of the country (myjoyonline, 2010; DailyExpress, 2008; Daily Guide, 2009). However there seem to be a consensus among politicians and social activists in Accra around the centralization of oil rent management. Interview with Steve Manteaw, Civil Society Platform on Oil and Gas, at ISODEC quarters, Accra, 6 June 2019.

17- Professor at the Department of Economics, University of Ghana - Legon, interviewed on 3 and 6 July 2019.

18- Interviews at CDD-Ghana in Accra, 10 June 2020. Both analysts, along with Amponsah and Dartey, have suspected that even the PIAC and the PC, which have to control the government, are at risk of being captured by the government.

19- This parallelism was acknowledge by Abdulai during our interview in the University of Ghana, 6 June 2019.

20- At present, Ghana is ranked 30th in the World Press Freedom Index and is thus ahead of many countries, including Spain https://rsf.org/en/ranking (accessed 5 December 2020).

21- United States Africa Command.

22- For a reflectxion of the role of sovereignty in another context of oil extraction, see Campos Serrano, 2013.

23- As Frederick Cooper (2002) has expressed, «[a]ll states function via a mixture of personal ties and formal structures» (p. 159).

This work was undertaken within the framework and with the financial support of the Jean Monet Network: Africa-Mediterranean-Europe (AMENET), 2018–2021. The authors are also members of the Grupo de Estudio de las Transformaciones de la Economía Mundial (GETEM-UAM).

Keywords: Ghana, Subsaharan Africa, political economy, democracy, natural resources, oil

Alicia Campos Serrano. Senior Lecturer, Anthropology Department, Universidad Autónoma de Madrid. alicia.campos@uam.es. ORCID:https://orcid.org/0000-0003-0768-7338

Ángeles Sánchez Díez. Lecturer, Global Economic Structure and Development Economics Department, Universidad Autónoma de Madrid. angeles.sanchez@uam.es. ORCID:https://orcid.org/0000-0002-1595-8129

How to cite this article: Campos Serrano, Alicia y Sánchez Díez, Ángeles. “Oil in times of democracy: debates around extraction and politics in Ghana”. Revista CIDOB d’Afers Internacionals, issue. 130 (April 2022), p. 165-191. DOI: doi.org/10.24241/rcai.2022.130.1.165/en