Speaking to the media in Accra Wednesday March 10, 2010, the Director of Economic Statistics at the Ghana Statistical Service, Magnus Ebo Duncan said the drop indicates a 0.55%  drop from the January rate. The drop he said is the lowest in eight months and the lowest in 22 consecutive months.

He indicated that the food sector is the major contributor to the fall with the fruits sub-sector contributing a negative figure, adding however, that prices rose 1.5% in February.

The downward trend in the country’s inflation led to a drastic cut in the policy rate of the central bank. The Bank of Ghana cut its policy rate by 200 basis points from 18% to 16% in February.

Announcing the rate cut, the governor of the Bank of Ghana, Mr. Kwesi Amissah Arthur said the Monetary Policy Committee of the bank took into consideration recovery of the global economy, steady diminishing inflationary pressures and growing business and consumer confidence in the domestic economy.

As inflation continues to fall, further cuts in lending rates are expected.

By Emmanuel K. Dogbevi

Nana Sam Brew-Butler

Known in Ghana as a football administrator and businessman, Nana Sam Brew-Butler is taking his business interests to east Africa, and this time he is getting into power generation.

Nana Brew-Butler once served as the chairman of the Ghana Football Association (GFA) and also owns a football club, Ebusua Dwarfs in Ghana.

A story carried by a Zambian publication, the Post says Nana Brew-Butler has expressed interest in setting up a thermal power generation plant in Zambia.

Nana Butler is the Executive Chairman of the energy company, JG Global Gas and Oilfield Services Ltd, which has offices in Nigeria and Ghana.

“I am in Zambia for a few days and I am hoping to have a talk with Zesco and the government on setting up a thermal power generation plant. I know that Zambia mainly generates hydro power but you should think outside the box as a country and explore other ways of generating power like thermal power and liquid fuel,” he was quoted as saying.

Nana Brew-Butler said his company was currently running a US $400 million thermal power plant in Ghana and was ready to set up a plant in Zambia if given a chance, the report indicated.

But ghanabusinessnews.com checks on the Ghana project revealed otherwise. A source close to Nana Brew-Butler told ghanabusinessnews.com that the information carried in the Zambian medium cannot be correct. According to the source, Nana Brew-Butler’s company, Global Solutions Ghana Ltd., has secured permits from the GNPC to build thermal power generation plants in Ghana. The source said Nana Brew-Butler’s company intends to build the power plants in Kpone in the Eastern Region and Bonyire in the Western Region.
By Emmanuel K. Dogbevi

The newspaper citing a presentation he made, indicated that he said Ghana will earn from direct and indirect sources such as royalties, corporate income tax, dividends, additional income tax, surface rental and carried interest.

He was however reported to have said that what is yet to be determined is how the revenue should be paid – either in cash or in kind.

He said revenue inflow has been categorized into two – big spending era and low spending – adding that the big spending era spanned 2011-2018, while the low spending era was expected from 2018 and beyond.

Since the discovery of oil in commercial quantity was announced in Ghana in 2007, most people have focused on how much money Ghana will make. One estimate even says every Ghanaian will get 17 pesewas when the amount is shared among all Ghanaians.

Ghana’s total revenue from the oil and gas find will represent less than five per cent of the country’s Gross Domestic Product (GDP), according to the Energy Minister, Dr Joe Oteng-Adjei, the Daily Graphic reported in its February 21, 2010 issue.

With the country’s current GDP at well over $18 billion, Dr Oteng-Adjei said the total revenue to the government and the Ghana National Petroleum Corporation (GNPC) in respect of royalties, income tax and interest payment on oil and gas exploration would be $1 billion per annum, at an average crude oil price of $60 per barrel.

Speaking at a workshop on ‘Good Governance and the Emerging Oil and Gas Industry’ for selected journalists reporting from Parliament, the minister captured the scenario thus, “If we are to share the revenue to the 23 million Ghanaians, each of us will receive about 12 cents per day (17Gp per day)” and wondered whether that could be the panacea for the economic problems of the country.

Others have also said the benefits to the country, will be more in the area of employment to local people, even though, not many Ghanaians have expertise in the oil industry.

By Emmanuel K. Dogbevi

According to information in the global oil industry available to ghanabusinessnews.com, Weatherford has been awarded a contract by the French company already working on the Jubilee field for precommissioning and commissioning services on the field.

The information say the contract includes pigging of production, water and gas injection flowlines; hydrostatic testing of the flowlines, riser and jumpers; followed by dewatering of the gas injection system.

During installation and post installation Weatherford will also perform electrical and pressure monitoring and testing of the umbilicals from the floating production, storage, and offloading vessel (FPSO), it added.

Information on Weatherford’s website says the company offers a host of services used throughout the lifecycle of pipelines and process facilities, onshore and offshore.

“Weatherford employs approximately 40,000 employees worldwide, operates in more than 100 countries with 800 service bases and 16 technology development and training facilities,” it says.

The Jubilee field is the largest oil field to be discovered in West Africa in the last 10 to 15 years. According to Tullow Oil, the major stakeholder in the field, it contains 1.8 billion barrels of oil and has 17 wells.

Commercial production of oil is due to start in the latter part of 2010.

By Emmanuel K. Dogbevi

The Ghana High Commissioner to Malaysia, Dan Abodakpi is reported by the Malaysian media as saying Malaysia can play an important role in Ghana’s oil and gas industry by assisting in human resource development and providing technical expertise.

He said Ghana could learn from Malaysia’s state-owned oil and gas company Petronas.

Mr. Abodakpi indicated that he has had talks with Petronas officials on ways of building collaboration between Petronas and Ghana’s state-owned oil explorer, the Ghana National Petroleum Corporation (GNPC).

Ghana discovered oil in commercial quantity in June 2007. The country has the largest oil field to be discovered in West Africa in the last 10 to 15 years. The Jubilee oil field according to Tullow Oil, the major stakeholders in the field contains about 1.8 billion barrels of oil and has 17 wells.

Commercial production of oil is expected at the later part of 2010.

By Emmanuel K. Dogbevi

President Mills cutting the sod for work on the Spintex road to begin

All arrears owed road contractors from the previous administration are expected to be cleared within the next three weeks, Mr Joe Gidisu, Minister of Roads and Highways announced on Thursday.

For starters, government would next week release GH¢20 million from the Road Fund as part payment, and “it should be possible to clear the rest after two weeks”, the Minister said.

Mr Gidisu made the announcement, which was received with thunderous applause, at the sod-cutting ceremony for the re-alignment of the Spintex- Road behind the Shangri- La in Accra by President John Atta Mills.

The 2.6km road project, estimated at a cost of GH¢12.7 million, with finance from the World Bank, is to be carried out by Messrs Ussuya Ghana Limited.

The project, which realigns the Spintex Road around the Accra Shopping Mall behind the Shangri- La Hotel, links the Airport bypass, 100 metres from the existing Polo Court Roundabout.

It includes the construction of a railway bridge to separate the railway line and the road as well as the construction of a service road to the motorway around the Accra Shopping Mall, which shall be the beginning of future service roads along the motorway.

The road shall be a dual carriage way with provision for walkways and streetlights.

Sources close to the Ministry said discussions have been held with the Ministry of Transport, Ghana Railway Authority and Ghana Airport Authority to ensure that minimum disruption occurs to existing transport infrastructure in the area.

The project is expected to reduce congestion significantly around the Tetteh Quarshie Interchange and shall dovetail into other projects within the Accra East Corridor targeted at improving traffic flow and reducing congestion.

Other Roads to be constructed on the Accra East Corridor Project to be financed by the World Bank are the reconstruction of Giffard Road into a dual carriageway, construction of the Spintex Road (Flower Pot) to Burma Camp Junction on the Giffard Road, and the construction of the Maate Tsuru Road (Maate Tsuru-Teshie Link)

Source: GNA

There was the US-China competition to take control of the oil, which is not really a serious problem, but the claim by Ivory Coast that the recent find in the Dzata-1 well in the Cape Three Point led by Russia’s second largest oil explorer Luk Oil is a major challenge to the country’s emerging oil industry that the authorities are not prepared for.

According to reports in the Ghanaian media, the Ivory Coast is laying claim to the location offshore where the recent oil was discovered.

The claim coming barely a week after the latest discovery was announced, and caught unprepared, the Ghanaian authorities have rushed an urgent Bill, the Ghana Boundaries Bill to Parliament for delibrations and passing into law.

On a Joy News bulletin monitored by ghanabusinessnews.com Thursday March 4, 2010, the Minister of Lands, Alhaji Collins Dauda said despite an understanding that had existed between the two neighbours over the median line between the two, the Ivorians have written to Ghana indicating that they will not respect the median line.

Meanwhile, he said Ghana had made submissions to the UN asking to expand the country’s shoreline beyond 200 nautical miles. He added that the Ivorians too have made proposals to the UN on a similar matter.

Coming at a time when commercial production of oil is due to begin in the last quarter of the year, this is seen as a big jolt to the country.

Commenting on the development on Joy News, Security Analyst, Dr. Emmanuel Kwesi Ennin said the Ghanaian authorities have never taken all the major issues surrounding the oil find seriously, except to make political capital out of it and make promises of economic growth.

He revealed that the Department of Fisheries and Oceanography of the University of Ghana had done a great deal of work on the sea boundaries of Ghana, but the politicians have not given any serious thought to the results of the work.

Alhaji Dauda however, believes that the issue can be resolved through negotiations.
By Emmanuel K. Dogbevi

The Korean President, Lee Myung-bak , according to the Korean media made his country’s intention known when he met with Ghana’s Vice President, John Dramani Mahama who is in the country for a four-day visit.

Lee was quoted as saying that he was deeply impressed by Ghana’s democracy and economic growth, which has made the country a development model for the continent.

“Korea will enhance cooperation with African countries including Ghana this year. The cooperation between Ghana and Korea, each of which is the gateway to West Africa and East Asia, will have a great synergetic effect,” Lee was quoted as saying.

Korea is stepping up cooperation with Africa as part of its efforts to diversify the diplomatic horizon and secure stable energy supply, the reports said.

Last November, Korea and the African Union issued a declaration in Seoul promising to strengthen cooperation in trade, investment, energy, agriculture, security, climate change, education and other various issues. In the statement, Seoul also pledged to nearly double its official development assistance to the continent to over $340 million by 2012.

Ghana has become a destination of choice for most global economic power brokers, including the US and China all scampering to have deeper and stronger grip on the country’s nascent oil industry.

Ghana apart from finding oil has also carved a niche for itself as a good example of democratic governance and stability on the continent, and all these are adding to the country’s attractiveness.

By Emmanuel K. Dogbevi

The political stability in the country and the clear regulatory standards governing the industry have been noted as factors that would engender this growth.

According to the report, it is expected that the value of the mining industry in Ghana will increase form $0.64 billion in 2009 to $1.68 billion in 2014 buoyed mainly by the strong price of gold.

Ghana is the second largest producer of gold in Africa after South Africa and it is among the world’s five top producers of manganese ore. The country also produces significant quantities of bauxite and diamond.

Gold mining contributes about 90% of the country’s overall mining revenue.

According to the Bank of Ghana, the exports value of gold was US$ 2.6 billion, compared to US$2.2 billion in 2008.

The authors of the report took into consideration, data from local statistics agencies and associations, drew on the expertise of the UN’s Industrial Commodity Statistics Database, the US Geological Survey and the World Bureau of Metal Statistics and then used their own proprietary econometric model to do the forecast.

By Emmanuel K. Dogbevi

Some oil industry watchers predict that in the next five years, Ghana will be a small oil producer though, but a significant player in the industry.
But it appears a section of the US media thinks that America has a right to take charge of the country’s oil come what may.

In recent times some publications in the Wall Street Journal and particularly Forbes.com have sort to impugn the integrity of Ghana and to question the country’s sovereignty.

One of the articles on Forbes actually went to the extent of accusing President Obama of being responsible for an American power company losing an energy contract to build 130-megawatt natural gas-fired power plant at Aboadze in the Western region.

Meanwhile, a ghanabusinessnews.com investigation of this power project contract revealed that there was no contract at all that has been awarded to HPI. Indeed, ghanabusinessnews.com communicated with officials of HPI by telephone and by email and their responses were included in the report that was published on April 16, 2009.

It is curious therefore, that the Forbes article will seek to link the failure to award a contract that never was to Obama’s doing.

Indeed, in the said report ghanabusinessnews.com spoke to the Canadian Embassy officials in Ghana, and they denied their government’s involvement with any such contract, and yet this Forbes article is mentioning the Canadian government again.

In another recent article by one J. Peter Pharm, the Forbes went overboard with the headline “The African nation flirts with China on a major energy deal.”

Well, Ghana has the right as a sovereign nation to choose who the country does business with. Period.

And this seemingly disrespectful article is making reference to the country’s refusal to allow the ExxonMobil-Kosmos Energy deal to have gone through.  The facts of the case couldn’t have been lost on the writer of this irreverent article if indeed, the author wanted to be fair, objective and truthful.

The Kosmos Enery-ExxonMobil deal was not approved by Ghana because Kosmos Energy clearly violated the terms of the agreement it has with the partners on the Jubilee oil field.

By the terms of the agreement, if any one of the partners wanted to sell it’s stake, the other partners should be given the first option to buy, and until that is done, outsiders cannot be shown the data room – but that was exactly what Kosmos Energy failed to do. Without reference to the partners, which include, the Ghana National Petroleum Corporation (GNPC), Tullow Oil, Anadarko Petroleum and the others, Kosmos opened its data room to neighbours, Texas-based ExxonMobil.

And the author of the Forbes article who obviously must believe that America must take control of the oil in Ghana sees nothing wrong with the illegality in the conduct of Kosmos Energy and comes down on Ghana, which has the right to exercise its sovereignty.

The author’s call for deeper scrutiny of Ghana’s action in not approving the Kosmos-ExxonMobil  by Washington is not only comical but absurd. And the assertion that the action “threatens to waste hundreds of millions of American taxpayer-funded aid dollars and undo hard-won reforms,” is to say the least alarmist and unfounded.

This article isn’t the first, since Ghana refused to approve the deal, and doesn’t look like it will be the last. But the section of the US media that thinks America has the right to tell other nations how to manage their own affairs must be living in a dream world of their own. If indeed, this section of the media that is literally stampeding Washington to do what it certainly cannot do by forcing the Ghana government to approve what is an obvious illegality, then they must think again especially when they are making reference to the rule of law.

They may be scared or even unsettled by the economic rise and might of China, but they should also know that the world has evolved and America will not always remain a world superpower, both militarily and economically. And more importantly Ghana deserves some respect.

By Emmanuel K. Dogbevi