During the British colonial era, Ghana was known as the "Gold Coast" for its prolific gold deposits. Now, as in many countries before it, Ghana's recent discovery of a major offshore oil field has created a mixture of exuberance and trepidation. Billions of dollars will flow into the government treasury, but Ghanaians are all too familiar with corruption and the tragedy of Nigeria's squandered oil wealth.

Ghana's former president, John A. Kufuor, has said that the country's new "black gold" will be the boost that Ghana needs to become an "African tiger." During the euphoric days of June 2007 when the oil discovery was announced, President Kufuor said: "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? Even without oil, we are doing so well, already. Now, with oil as a shot in the arm, we're going to fly."1

Meanwhile, Ghana's citizens often voice concern that oil will lead to increased corruption and do little for poor people, pointing to the sorry state of mining communities in Ghana as well as oil-rich but dirt poor communities in neighboring Nigeria. For the international oil industry, the find-called one of the largest recent finds in Africa-has generated enormous interest in the country's
hydrocarbons potential, and Ghana has reportedly received more than 40 applications for oil exploration blocks since the announcement of the offshore Jubilee field. With more and more of the world's oil locked up or controlled by state-owned companies, the potential of a new "frontier" zone has created enormous excitement for oil companies, some of whom are depleting their reserves faster than they can replace them with new finds.

For Ghana, one of the most peaceful and relatively prosperous countries in West Africa, the start of oil production in late 2010 would seem to come as good news. Ghana hopes that its star will continue to shine and that oil revenues will help accelerate the country's effort to meet the UN Millennium Development Goals (MDGs) by 2015. But, as so many other countries haveshown, it is a difficult and tortuous journey to move from the generation of oil wealth to its proper investment. In too many other countries, oil booms have bred corruption, underdevelopment, social conflict, and environmental damage. Therefore, the onset of oil production presents Ghana with one of its greatest tests. Ghana has an enviable record of good governance and stability. However, oil wealth tends to erode democratic accountability. Ghana's challenge will be to ensure that the right institutions and transparent policies are in place before oil production starts.

Report objectives

This Oxfam America briefing paper has the following objectives:

To raise the international profile of the Ghanaian oil boom and the threats and opportunities this boom poses to the country's efforts at achieving the UN MDGs;

To highlight for Ghanaians, especially civil society groups, journalists, parliamentarians, and concerned citizens, as well as those in the international community, key facts regarding the coming oil boom and key institutional, policy, and governance challenges, given the Ghanaian context and the experience of other developing country oil producers;

To contribute to the policy debate in Ghana as to the appropriate steps for the new presidential administration to take;

To influence the policies and practices of Ghana's key international partners, including donors such as the World Bank, the International Monetary Fund (IMF), Britain, the US, Norway, Germany, and others;

To make recommendations for the Ghanaian government, donors, oil companies, and others.

*  The full report (66 pages) can be accessed at: http://www.isodec.org.gh/Ghanas-Big%20isodec%20oxfam.pdf