Ghana seeks to convert price spikes to profit

Nana Akufo-Addo, presidential candidate for Ghana’s ruling party, has pledged to invest part of the country’s future oil income in agriculture, hoping to turn the pain caused by the global spike in fuel and food prices into profit.

Ghana, widely regarded as an example of successful economic and political reform in Africa, aims to start pumping 120,000 b/d of crude from an offshore field operated by the UK’s Tullow Oil in 2010.

The prospect of controlling what could amount to billions of dollars of oil revenue has raised the stakes ahead of December’s presidential elections, where a close race could pose the biggest test yet of the stability of Ghana’s 16-year-old democracy.

Neither the ruling New Patriotic Party nor its main challenger, the National Democratic Congress, have presented a detailed plan for managing income to avoid the kind of corruption and collapse in farming and other industries that a rapid influx of oil wealth has caused in much bigger African producers such as Nigeria and Angola.

Mr Akufo-Addo, however, said part of Ghana’s oil earnings - which he projects at $15bn in the first five years - would be used to open land for cultivation in the relatively undeveloped north should his NPP extended its eight-year run in power.

”We have large chunks of the northern part of our country, which could assure us food security in Ghana, if we also go about the planning of the agricultural development there properly,” Mr Akufo-Addo told the Financial Times in an interview in Accra, the capital.

Ghana’s quest to boost food production reflects a wider trend among African governments seeking ways to lure investment into agriculture to defuse the kind of unrest that surging prices for imported staples caused in countries such as Cameroon, Ivory Coast and Senegal this year.

Mr Akufo-Addo, who served outgoing president John Kufuor as justice minister and attorney-general, also pledged to promote the manufacturing sector in Ghana, targetting West Africa’s Ecowas trade zone, as part of a strategy to promote job-creating industries processing agricultural and other produce.

John Atta Mills, who is making his third attempt at the presidency as the flagbearer of the opposition NDC, has also pledged to ensure the transparent management of oil revenues to stimulate faster economic growth.

The NPP government has enjoyed some success in boosting Ghana’s cocoa exports and cassava production in recent years, but rice and grain output still lags far behind domestic demand due in part to a lack of irrigation.

Mr Akufo-Addo’s pledge to boost development in the north also reflects the party’s desire to broaden its appeal in a traditional stronghold for the NDC.

The NPP can point to several years of strong economic growth under Mr Kufuor, who is stepping down after two terms in power, but rising inflation -- which hit a four-year high of 18.4 per cent year on year in June – has .fuelled support for the opposition.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.