ANALYSIS-Ghana not safe from the oil curse yet
* Delays, questions over oil revenue management bill
* No Niger Delta strife seen - but tensions could emerge
* But oil not seen undermining cocoa and gold wealth
By Mark John
DAKAR, Dec 15 (Reuters) - With one of the strongest democracies in Africa and an economy bolstered by gold and cocoa income, Ghana is better placed than most to ensure the blessing of oil does not become a curse.
But as the West African nation joins the ranks of the world's oil exporters on Wednesday, concerns persist that it has not quite done enough to immunise itself from nasty side-effects.
"This is probably the best time in Ghana's post-independence history for it to get hold of an asset of this nature," Emmanuel Gyimah-Boadi of Ghana's Centre for Democratic Development said of a stability fostered by nearly two decades of multi-party politics.
"But that is where it ends. From where I stand the rest is indeed worrying," he said of still-unanswered questions over how President John Atta Mills' government will ensure the money is used to the best advantage of the nation of 23 million.
Ghana's offshore Jubilee field is set to hit an initial output target of 120,000 barrels a day by mid-2011, making the country sub-Saharan Africa's seventh biggest exporter, and go on to double that in a second phase of production by 2013.
Total oil reserves are currently put at 1.5 billion barrels with recent new finds seen adding to that potential. Added to that are the field's estimated 800 billion cubic feet of gas, according to London-listed operator Tullow Oil Plc.
For lessons on how not to manage the oil, Ghana has only to look at nearby Nigeria, whose much bigger reserves have triggered internal conflict, corruption and the paradox of declining living standards for millions of Nigerians.
Resource curse can also manifest itself as "Dutch disease" if an asset causes a currency spike that hurts other exports, as happened to the Netherlands in the 1960s with gas.
Or it can lead a country to forget to build other industries while growing a bloated public sector, as with oil-rich Gabon.
Since the discovery of Jubilee in 2007 Ghana has sought out guidance from countries such as Norway and Trinidad, which managed to turn oil into a motor for prosperity. But so far, it has yet to fully turn the good advice into practice.
A late start in launching the Petroleum Revenue Management Bill has meant that Mills will be turning on the oil tap without a legal framework defining how much of the proceeds can be spent and how much invested.
This need not be a problem if deputies work through some 200 proposed amendments before parliament adjourns for Christmas on Dec. 21. But any longer slippage could unnerve investors.
"If you want to encourage the right sort of people they have to know what structures they are investing in," said independent oil analyst Antony Goldman, noting that delays in Nigerian laws had held up billions of dollars of investment there.
Yet even when the Ghanaian bill gets passed, some are concerned it leaves too much scope for abuse or misuse of funds.
Analyst Gyimah-Boadi complained of a lack of criteria for which infrastructure projects could benefit from oil money, with the main safeguard being approval from a national parliament that has offered little resistance to past spending.
"Admittedly, Ghana does have a lot of infrastructure deficits ... But this is a blank cheque," he predicted.
He and others also balk at an amendment pushed through by the ruling majority last week that will allow the government to use up to 70 percent of oil revenues as collateral for loans -- creating the temptation to ramp up borrowing.
The world's second largest cocoa grower and Africa's second largest gold producer, Ghana failed to tuck away proceeds from those assets in time to cushion it from a price slump in 2000, forcing it to seek $3.7 billion debt relief two years later.
"We don't have a track record of managing the revenues from resources particularly well," observed Emmanuel Akwetey of the Accra-based Institute of Democratic Governance (IDEG).
A MODEST ENDOWMENT
Few believe Ghana's oil -- some 40 miles (60 km) out to sea -- will trigger the strife seen in the Niger Delta, where local resentments have sparked a series of attacks on the industry.
But the demand made last month by traditional chiefs in the Western Region for 10 percent of revenues from crude which they maintain is located in their homeland has highlighted the scope for regional rivalries.
Ultimately the modesty of Ghana's oil endowment may be a blessing, providing at best a complement to cocoa and gold revenues that, together with other minerals and farming revenues make up close to two-fifths of national output.
The first phase of production will amount to merely 1.8 barrels of oil per head of population a year -- or just $160 at current prices even before the oil industry takes it share of revenues. Tiny Equatorial Guinea, with a population of just under 700,000, has per capita annual oil income one hundred times that.
"Oil (will) provide a cushion of revenues ... without prompting a significant appreciation of the cedi or a major repurposing of labour," forecast consultancy Oxford Business Group's Robert Tashima.
"Ghana will not transform into a single-sector economy." (Additional reporting by Kwasi Kpodo in Accra and Emma Farge in London; Editing by Giles Elgood)
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