In 2007 when the government announced the successful discovery of oil in commercial quantities, not many Ghanaians fully appreciated the new status the country was about to attain.
It was not until December 2010, when commercial oil production took off that the reality of Ghana being an oil producing country became clear.
It came with great expectations and anxiety.
For a country that had relied heavily on cocoa, gold and timber to fund its expenditure, adding a revenue stream as big as crude oil to the basket of foreign exchange earners meant a lot.
For the financial managers of the economy, it meant more.
Oil production increases domestic resources, reduces appetite for debts and widens the country’s foreign exchange supply portfolio – a key requirement to a stable local currency.
In countries where the resource is properly managed, oil acts as honey; it attracts investments into the entire value chain of the petroleum sector and that serves as catalyst for expansion in the non-oil economy.
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The expectations were that oil would help create a better economy and lift millions out of poverty.
With unemployment taking a toll on the youth, many expected that oil production would stimulate job creation to help end their fruitless search for employment.
It is obvious, however, that many expectations have not been fully met, almost a decade into our latest status as an oil producer.
It is true that oil has raised domestic revenues, bringing with it more than $6 billion in taxes and direct export earnings; led to investments in excess of $20 billion; and birthed many companies and entrepreneurs that are contributing in diverse ways to national development.
The Daily Graphic, however believes we could have done more, especially given the potential that oil production holds for economies.
We believe that for one to fully appreciate the impact of oil on an economy, the focus must be broadened to include how the resource becomes a means rather than an end to economic growth.
To achieve this, deliberate synergies that focus on using what we have to get what we do not must be created, using forward and backward linkages.
It is for this reason that the Daily Graphic strongly aligns with the call of the Chief Ececutive Officer of the Tema Oil Refinery (TOR) that a percentage of the crude oil produced in the country should be made available to the state-owned refinery to process into final products for domestic consumption.
TOR is one of Africa’s top-notch refineries with the capacity to refine 45,000 barrels per stream day, but sadly, Ghana still spends its scarce foreign exchange to import refined petroleum products to meet growing consumption.
Those imports cost the country about $2.5 billion in 2018, up from $1.27 billion in 2017 at a time the national refinery was struggling to raise funds to procure crude oil to process.
Why the country will not give part of its share of the crude to TOR to process for the domestic market is an issue that needs to be critically examined.
This will not only reduce imports, it will create more jobs and give meaning to oil being a catalyst for growth.
The Daily Graphic therefore urges TOR to put together a proposal to the government for consideration.
TOR should also put in place appropriate structures that will guarantee efficiency in operations, develop the capacity of the staff and reposition TOR in general as a new entity capable of delivering value to shareholders.
We are convinced that these would repose public confidence in the refinery and make it easier for the public to support any future decision by the government to give part of our crude oil to the state refinery to process.