Politicians have been advised against raising the expectations of Ghanaians that the oil discovery in the country is going to solve once and for all, the unemployment situation of the youth.
This is because oil economies alone could not generate mass employment for the youth until the Government invest the oil revenue in other areas of the economy such as agriculture, the services and the manufacturing sectors to generate the needed jobs.
Prof. Andy Mckay, of the Economics Department of the University of Sussex and Overseas Development Institute, London, who delivered a paper on the impact of the Oil and Gas find on Ghana’s economy in Accra last Monday, said Ghanaians, therefore, should not expect direct poverty reduction impact because of the oil find.
The seminar was organised by the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Legon.
The seminar was under the theme “Managing a new oil economy”.
He explained that since oil economies have weak linkage with the rest of the economy, oil could not change the economic structure of the country by providing employment to the youth.
Prof. Mckay said research had revealed that oil economies did not as a rule lead fast structural transformation of any economy.
He, therefore, urged Ghanaians to desist from unrealistic expectations in relation to the discovery, since the find, if not properly managed, could provide incentive for corruption.
He said the possibilities of the Government striking cosy relationship with oil companies at the expense of the suffering masses was high, as research in many African countries had revealed.
He, however, said Ghana being a democratic country, as well as a resource-rich state, had had some negotiating experiences, adding that the activities of civil society was required to hold the Government accountable, and operate a transparent system to check corruption in the oil economy.
He said in an oil economy, the Government should use more revenue from the oil find to finance other sectors of the economy so as to provide jobs create the necessary competition in other areas of the economy.
He explained that another curse of the oil find was the likelihood that the Government would abandon its traditional sources of revenue and only concentrate on the oil revenue for the development of the economy.
He said because oil was a finite resource that could be depleted, the Government found itself with no other alternatives of making money when oil prices went down and all grandiose projects immediately became abandoned.
Prof. Mckay advised the Government to spend more on rural development and agriculture to avoid the ‘Dutch disease’ when Holland discovered gas and abandoned its manufacturing sector.
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