Travails of Ghana’s Decade of Crude Oil Production and Exports: Lessons and Policy Prescriptions

The chapter analyzes why and how Ghana’s oil and gas production has not produced the intended economic boom. This chapter situates Ghana’s oil and gas sector including the existing three oil fields and the forthcoming one within neo-liberal economic perspectives which constitute the framework in which Ghanaian governments manage the extraction and the disposal of crude petroleum. Despite the accelerated pace of oil extraction, government receipts have been anemic due to some technical glitches but more especially the ultra-liberal tax (fiscal regimefiscal regime) within which international companies operate. Ghana has saddled itself with the help of donors to perform what in this study is called “impossible fiscal gymnastics.” To attract foreign capital, technology and skills, it offers huge tax breaks while the country is simultaneously prohibited from engaging in value addition through robust local content: vigorous, concerted and scaled up effort to use indigenous labor and use of local goods and services from local businesses. For example, there is not a single year since first oil in December 2010 that Ghana has received a billion dollars per annum from its take from the nation’s oilfields—not even with the current three operating oilfields. Because Ghana under donor tutelage applies a neo-liberal perspective, there is the possibility that in 20 to 30 years, oil will run out and like its gold, few benefits will go to citizens. This study also alludes to what are called triple economic threats looming on the economic horizon: Chinese cocoa, mismanaged gold extraction, and in 2021, a steadily building up demand globally for the world to decrease fossil fuel energy use to protect the environment. Thus, Ghana not only needs to revamp its petroleum resource management, but it also must gear up for a world that could reduce dependency on fossil fuels including natural gas and oil.