The 10% oil revenue kickback for the West – Bad idea

E. Ablorh-Odjidja

November 25, 2010

The notion that the Western region alone must receive 10% of the revenue from the new oil find is simply outrageous.

New oil finds or not, development in the West must go in accordance with goals and objectives set up for all regions in the nation.

The simple claim must be that the oil revenue is a sovereign right that ALL Ghanaians must share, regardless of their geographic origins.

So, whoever seeded this idea in the minds of chiefs of the western region must be up to no good.

WE got the right to that oil deposit because we are a nation. 

The “United Nations Convention on the Law of the Sea”, that came into force in 1994, made that possible.

It declared that “The continental shelf is defined as the natural prolongation of the land territory to the continental margin’s outer edge, or 200 nautical miles from the coastal state’s baseline.

A nation's "continental shelf may exceed 200 nautical miles until the natural prolongation ends.”

This proclamation was made to benefit nations and not for tribal chiefs and politicians to grab for regional and tribal self-serving purposes. 

The oil find, in a deep-sea territory, is not an ancestral settlement.  Neither is it a claim to be made on the basis of conquest or purchase.

But there are some politicians and intellectuals amongst us who deem it fit to encourage the claim for the 10% compensation idea.  

One such fellow, a Development Economist, claims in a GNA report of November 23, 2010, that “his support was not based on the fact that the oil was found in that Region but purely on development enhancement mechanisms because the people of the Western Region would be the losers as a result of the exploration.”

This Development Economist’s view is that, “in every economic activity, there would be gainers and there would be major losers."  The compensation, therefore, must be seen as an intervention mechanism that would ameliorate the losses for those impacted; in this case the people of the western region.

The “learned chap” thus conveniently describes the Westerners as losers, without explaining exactly why they are.

Well, it is hard to imagine the West as losers under these circumstances, when the exploitation is happening at a space in the deep sea, some 200 hundred miles away from the shoreline.

Meanwhile, regions inland with projects seated in the midst of spaces within their lands and populations, that cause tangible inconveniences in the present, have made no such claim as the 10% for losses. 

Following the logic of the 10% argument, the "mechanism" for losers, should then be universal as a common application for all whose regional assets are touched and that produce any benefit or revenue for the nation.

 After all, what is good for one side in a nation must be good for the others.

But as charitable as the "mechanism" is, it fails to recognize a common danger; the explosive nature of the whole 10% claim on the nation.

A practical application of the theory will be to calculate giving 10% of the revenue from assets such as the inconveniences Akosombo Dam to the people of that region; whose lands have been swallowed by the lake, and from which the nation has gained so much.

The use of Akosombo land area is real, inland and tangible.  And so are other rich resource producing areas in the country.  Even the use of the region of Accra as the capital must be considered in the "mechanism" allowance for development losses.

All told, the calculation for cost to operate in the above areas will be colossal by the 10% standard.  And collecting back payments and interest as compensation on these issues will bankrupt the nation of Ghana.

 In the light of the claim by the Western chiefs, what must the rest of us say to the people above whose rightful resources have been exploited for the benefit of all in the country?

The only sensible response is to kill the demand.  The cost will forever outweigh the benefits to such a demand.

All this is made not to contest the idea that the West must be developed.  

Or to refute the idea that it lags behind the rest of the country in development and therefore needs help.  It is rather to prevent this bad policy from being adopted.

There are gains for sure that will flow naturally from industrial plants in regions. Economic impact and gains like job creations can be felt in these areas. The oil find will help the western economy to percolate.

Businesses, as result of the oil find, will rush to Takoradi and other towns in the West; not to reverse regions to places like Koforidua, Kumasi, Techieman or Tamale.

No Ghanaian in his right mind will be offended by the developments that may naturally follow the oil discovery in the West - good roads, hospitals, schools and the general upgrade in life prospects. 

But to set aside 10% of the oil revenue for a region fortunate enough to have oil discovered 200 miles away offshore is to create an onerous, artificial benefit for haves and have nots of regions. 

This will be a bad precedence for future planning for the entire country. The social, the political and the psychological costs to the self as a nation will be huge. 

A true statesman will see this 10% move as the planting of a nuclear fuse.  The cheap politician will only see it as bribe payment for the opportunity to ingratiate himself to the populace for more power in the future.  

Hopefully, there will be some good citizens among the masses who will say to the cheap politicians, well charlatans, “Go ahead. Make my day.”

And come time for elections, these citizens would vote against the charlatan politicians or any political party that offers this kind of bribe for ballots.

E. Ablorh-Odjidja, Publisher www.ghanadot.com, November 25, 2010

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