BusinessCountry FocusA view from Ghana's oil west


Posted on Friday, 17 January 2014 11:03

A view from Ghana's oil west

By Billie Adwoa McTernan and Kwabena Mensah in Takoradi-Sekondi

Takoradi harbour has rediscovered its vocation thanks to oil. Photo©Chris Stein for TARThe oil boom has doubled the population of the region's twin cities while land prices have skyrocketed. But are local people really benefiting from the metamorphosis?

Amid the haggling, hawking and suffocating traffic jams around Market Circle in the middle of the oil capital of Takoradi, Ghana's new energy economy is emerging.

There are grandiose plans for a domestic gas industry that will power homes and factories across the country, another oil refinery and a petrochemicals complex, all on top of a great boost to export earnings.

There are also plans to develop the six coastal districts in the Western Region, to improve road and railway links, upgrade some of the worst slum areas around the cities and build a new district hospital.

Plans for an industrial free zone in Sekondi, Takoradi's twin city, are moving ahead, with factories to process bauxite and provide employment for the growing population.

Shopkeepers forced out

But there are doubts about how much people are really benefiting from this local boom as this formerly sleepy provincial capital expands pell mell.

To start with, the shopkeepers at Market Circle fear for their livelihoods.

To Watch Out West

The 30-year-old architect is the real-estate developer behind oil village, a 100-acre gated community some 20km away from Takoradi. Once completed, the development will provide housing, a clubhouse, a golf course and possibly a helipad to cater for wealthy returnees looking to buy and expatriates who can shell out a minimum of $2,500 per month for a studio apartment and $4,500 for a bungalow.

The only woman working in operations for her company, EXPRO, Asirifua-Duku is a rarity in the ghanaian oil and gas industry. The data acquisition field engineer hails from Asankrangwa in the Western region. For her, it is important that locals work at different levels in the sector to assist in creating developmental plans in line with what local communities desire.  

The development of "first-class roads" is a priority for Captain (retired) anthony Cudjoe, chief executive of the Sekondi-Takoradi metropolis. The government appointed Cudjoe, who is a former soldier and also worked in security, to the position in 2010. In December 2012 he contested and lost the Sekondi seat in parliamentary elections on an NDC ticket.

They have been paying rent for between five and 10 years in advance but the bold new plans to redevelop Takoradi's central business district could price these traders out of the Market Circle area.

Local companies are building new shopping facilities on the outskirts of the city and some of the traders in the centre of town are being encouraged to move there, but it will take many years.

Russia's Renaissance Group is building one of these projects, called King City, some 10km from central Takoradi.

Yet this ambitious project, sprawling over 800 hectares and with housing for rich and poor alike, will not be completed for another 10-15 years.

As rents go up and old buildings are knocked down, those living in central Takoradi are also facing pressure to move to the suburbs.

From there, they have to negotiate the increasingly dense traffic jams.

Nana Kobina Nketsia V is the chief of Essikado in Sekondi and one of the most influential and outspoken traditional leaders in the Western Region house of chiefs.

He says the chiefs' demand in the run-up to the 2008 elections, for 10% of national oil revenue to be allocated to the Western Region, is still on the table, even though the 1992 constitution rules out such economic devolution.

Nketsia sums up the ambivalence of local people towards the fast-growing oil industry.

With the right management the region could avoid the 'resource curse' and become a growth pole for the West African subregion, he insists.

Ghana has some way to go before that can happen: its proven oil reserves of a billion barrels are slightly more than 3% of Nigeria's. "We should have learnt about the oil industry and the harms andbenefits," muses Nketsia, "because with it comes an oil culture and I'm not sure we are prepared."

Why no new airport?

He is also a firm advocate of more even regional development.

The way to address that, he says, is with a new land- use plan to restructure the city and to improve the Western Region's road links with the rest of the country.

Nketsia is also worried about the lack of economic planning and strategy in the region.

"If we can plan a new airport for Accra or Tamale, why can't we have a new one for Sekondi-Takoradi?" he asks.

"You can see how much traffic into and out of the city has increased, especially by air."

The agriculture sector, which is by far the largest employer of labour in the region, is focused on newer cash crops, such as oil palm and more recently rubber, which are gradually replacing traditional crops such as cassava, plantain and cocoa.

This, Nketsia says, has led to farming families selling off or leasing their land to cash-crop buyers and plantation companies.

Having done so, they risk finding themselves homeless in a city where they could struggle to find a place they can afford to rent.

These socio-economic pressures are growing even as many families try to help out their destitute relatives.

"I am not advocating some sort of simplistic regionalism or irredentism," says Nketsia. "I am simply a community leader who does not even have a voice in the Sekondi-Takoradi Metropolitan Assembly."

He wants to encourage people to stay in farming and has called on the government to move away from the colonial-era system of giving out 99-year land leases.

The Sekondi-Takoradi metropolis has vast stretches of rich green land, much of which has been grabbed by investors as far out as 20km from the centre.

Land prices are shooting up as a result.

The metropolitan authority for Takoradi and Sekondi has been inundated with requests for land since 2010, when commercial oil production started.

In some cases the price of land has increased by 500%.

Though this is good news for landowners, it puts heavy pressure on those that do not have access to such holdings.

Oilmen live it large

As the oil and gas industry takes off in the Western Region, with its associated mega-industrial projects, the early beneficiaries are the international oil companies themselves and the smaller logistics companies run by Ghanaians.

The other fast-growing areas are property and hospitality businesses.

"The number of hotel rooms in the city has doubled in the past three years, and so have their prices," says Eugene Ofori-Atta, who runs one of the most successful architectural practices in the city.

"Residential accommodation for top oil executives is going for up to $10,000 a month," he adds.

House rentals in some of the city's most desirable areas such as Beach Road, Airport Ridge and Chapel Hill can command as much as $5,000- $10,000 per month, thanks to the influx of high-spending expatriates.

One of the biggest hotel projects is the 132-room Protea Hotel built by Alliance Estates Limited in the exclusive Beach Road area at a cost of more than $8m.

It is due to be completed next year.

Ofori-Atta points to the rapid growth of services linked to oil and other industries: "We have seen new businesses springing up doing everything from banking to quarrying, private transport hire to heavy-duty haulage."

Other growth areas include warehousing and construction equipment hire.

In the past five years the area's population has mushroomed from 250,000 to 650,000-700,000, according to Captain Anthony Cudjoe, metropolitan chief executive of the Sekondi-Takoradi area.

The rapidly expanding population has put some pressure on government to provide the necessary facilities and services.

Reliable and clean water supplies, in particular, along with improved sanitation, are much in demand as the conurbation grows.

Love for sale

"While oil and gas provide opportunities, they also have social consequences," Cudjoe cautions.

For example, the combination of growing unemployment and the arrival of well-paid expatriate oil industry staff seems to have sparked a boom in sex workers, who gather at popular drinking spots just a 10-minute drive from the airport.

But many of the oil workers are not putting down roots in Takoradi-Sekondi or even adding substantially to the local economy.

They fly into Takoradi for a month and then go back to Accra – where their head offices are – or even back to their home countries then return to Takoradi a month later.

The government is building a railway line to boost public transport and eventually improve freight services for Ghana's farmers.

Initially, the new line will go from Sekondi to Takoradi via Kojokrom – covering about 25-30km – and will be used for both cargo and passengers.

That stretch is to be completed by late 2014, then President John Dramani Mahama's government wants the rail link from Takoradi-Sekondi to be extended to Kumasi and Accra.

In its pre-oil period, Takoradi was known as a vital export hub, but with poor roads and rising joblessness.

The new oil boom – which could be relatively short – is driving the city to take on a new economic role and social shape, leading it to return to its former role as one of the busiest ports along the West African seaboard. ●




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