The Economic Implication of Ghana's Oil Discovery: the Case Study of Takoradi Community
This paper presents a research proposal which have been prepared for the future research on the economic implications of oil discovery in Ghana. It starts with a brief introduction to the whole case scenario by introducing Ghana and its recent oil discovery and proceeds by explaining the research questions and highlighting the major research objectives. The major part of the paper consists of a comprehensive literature review which has been done to discuss the aforementioned business issue in the light of most recent articles, news, and research publications. The literature review completely focuses on discussing the economic implications of this oil discovery for Ghana from both positive and negative perspective. The research design and data collection section presents the techniques and ways in which the researcher will collect and analyze the data in a specific time span. The final section gives some ethical considerations which the researcher will keep in mind throughout the research process.
Ghana -- the fastest growing economy in the African region and among the top ten fastest growing economies of the world has been blessed with various natural resources. Ghana has seen a recent oil discovery in an oilfield when Anadarko Petroleum, Kosmos Energy, and Tullow Ghana Limited officially announced that 3 billion barrels of light oil have been discovered in Ghana which will continue to increase in the future (Institute of Statistical, Social and Economic Research 2012). It was news of great pleasure for the whole African community that this discovery can make them more energy sufficient as compared to many other regions of the world. In this research paper, an effort has been made to highlight all the major benefits and issues which can arise due to this oil discovery (Howard University 2010).
This paper presents a research proposal for doing research in this specific business area and applying business research methods and tools that are relevant to this research. This oil discovery can impact the whole economy of Ghana in both positive and negative way. While Ghana can reap numerous benefits from this oil discovery on one side, it will also see negative consequences on the other side (Tullow Ghana Ltd. 2009). This research proposal will suggest areas which can be researched in order to analyze these benefits and negative consequences.
This topic has been chosen because it directly relates to various areas of Business Management and Economics. For example, by looking at the benefits and drawbacks of the oil discovery in Ghana, the implications on different sectors of the economy can be analyzed which will be helpful for future studies and analysis by business professionals, economists, financial analysts, and business management students. The findings of this research study will not be limited to future studies in Ghana or African region; the business professionals, economists and students will find extensive research material and literature review for relevant research studies.
RESEARCH QUESTION AND RESEARCH OBJECTIVES
The main research question for this paper relates to the implications of this oil discovery for the whole economy of Ghana. That is; what benefits Ghanaians can reap from this oil discovery in different sectors of their economy; including manufacturing and industrial sector, oil, petroleum, and mining industry, services sector, and agriculture sector. In a single sentence, the overall one research question can be presented as follows:
What economic implications will Ghana observe as a result of oil discovery? Can it be a potential contribution to the economic growth of this country or will it lead to greater corruption and worse political conditions in the future.
The Three Main Research Objectives:
The first primary objective of this research study is reflected in its research question, i.e. what impact will this oil discovery bring on Ghana's economy. This research aims to assess the positive and negative impacts which Ghanaians will see as a result of this oil discovery in their country. The second research objective is to find and critically analyze the relevant literature on oil discovery in Ghana in order to fulfill the requirements of the first research objective. For this research objective, an extensive research will be made from the most recent publications, articles, and newspapers since the discovery of oil in Ghana. This research objective will be fulfilled by exploring and critically analyzing the relevant literature.
The third research objective is to contribute to the existing literature for this specific business management and economics issue. By meeting the requirements of the second research objective, an effort will be made to present critics and thoughts that are unique and can be useful for future researchers in a totally different way from previous available researches. All these three research objectives along with the main research question are completely focused on the literature review which has been done specifically for this oil discovery issue.
The following section presents a comprehensive literature review on the implications of oil discovery in Ghana from a critical perspective. A number of articles and research publications have been consulted in order to get deep insights into how Ghana will benefit from this oil discovery. The literature reviewed is directly related to the research question of this proposal which also aims to answer the economic impacts of this oil discovery. After this literature review, it has been justified that how it relates to the main research question and the three research objectives and what can be researched further to discuss this business issue.
1. Agriculture Sector:
Ghana's economy is largely dependent on its agriculture sector. More than 50% of the Ghana habitants are directly or indirectly linked with the agricultural sector (Addu 2011). Cocoa and Cashew are the major crops of the country which are exported to earn high revenues every year (World Bank 2009). However, the foodstuff produced in the country is not sufficient to meet the local demand. Therefore, Ghana has to import a variety of products and commodities from partnering countries. Upon oil discovery in Ghana oilfields, the agricultural sector will get numerous benefits in the form of expanded level of production, efficiency in the operations, and a significant decrease in the level of unemployment (Korosec 2009).
(i) Being self-Sufficient in Agriculture:
First of all, the country will become self-sufficient if it will increase its production level up to such an extent that there is no need for importing commodities for the local demand. The new oil reserves can be used to increase the level of production and become capable of exporting the agriculture products to the outside world. The oil discovery in 2007 and subsequently in 2010 can give various benefits to the agriculture sector of the country in the long run. Despite having a major dependence on the agriculture sector, Ghana has not taken it seriously. Malaysia and Indonesia have fully utilized their cultivatable lands to become agriculturally and economically stronger than other countries of the same category (Pyagbara 2007). In contrast, Ghana does not give much importance to its agriculture sector which results in huge expenditures in the form of heavy imports of foodstuff from other countries. For example, Ghana had to import rice worth $500 million for its local demand (World Bank 2009).
(ii) Steps to reap benefits from the oil discovery:
This oil discovery is an attractive opportunity for Ghana to become self sufficient in its agriculture sector. It can formulate long-term development plans for this sector if it wants to make itself economically strong than other African countries. An effective strategy would be to invest the revenues earned from the sale of light oil in the agricultural sector. The development in the agriculture sector can be ensured by giving full support to the Agriculture Development authorities in all the three ways: financially, politically, and operationally. Moreover, the Government can provide financial support to the farmers who are not able to produce anything on their cultivatable lands due to the lack of sufficient money (Management of Ghana National Petroleum Corporation 2010).
The Government can provide them interest free loans on easy terms and conditions so that they can fully utilize their lands and produce the maximum output for the country. In addition, the businesses which are linked with the agriculture sector can also be helped with the revenues from oil industry (World Bank 2009). These businesses can be supported by relaxed taxation policies and regulations so that they can operate their plants and machineries at their full capacity and improve the efficiency of their operations (Walters 2010).
2. Implications for the Services Sector:
The new oil discovery will also have great implications for the services sector of Ghana; especially the Takoradi community will see improvement in various economic and social issues. For instance, it is obvious that the new oil discovery in Ghana will boost up the economic growth which will facilitate the Ghanaian government and regulatory authorities to take better control of the economic measures. The biggest…