Vol. 9, No.1: The Discovery of Oil in Ghana- Time for a Reality Check, by Kwadwo Mensah
03 March, 2008
The discovery of oil in Ghana has led to optimism about the prospect for Ghana’s economy. President Kufuor has never lost an opportunityto applaud this fact, suggesting at least implicity, at every opportunity that the discoveryof oil is an unfettered good for Ghana. The question is, “should Ghanaians be optimistic about this turnof events? ”Research has shown that far from being the basis for sustained economic growth, oil can impede both economic development and good governance in countries where it is discovered. This has been dubbed the ‘resource curse’. This essay summarizes research by Humphreys, Sachs and Stiglitz in their book ‘Avoiding the Resource Curse’ on the impact of oil on the politics and economics of developing countries. As we shall see, the implications are not encouraging. The book broadly confirms we must view the potential impact of oil on our fortunes with a lot of skepticism.