THE DISCOVERY OF OIL AND HOW IT MAY AFFECT LABOUR DYNAMICS IN

THE NORTH.

BY CHIEF ALHASSAN ISSAHAKU AMADU, REGIONAL POPULATION OFFICER AT THE 2010 DENMARK SEMINAR

31ST OCTOBER 2010

INTRODUCTION

• In the lexicon of development and human progress, discovery of oil should be a blessing not a curse. Oil is discovered by human beings, processed and managed by some human beings, and used directly or indirectly by all human beings within some defined geographical zones at various levels of inclusiveness. The labour dynamics of the North, like many others, is a dichotomous one;

1. PRODUCTIVE 2. NON-PRODUCTIVE

INTRODUCTION CONTD

• To the extent that it is PRODUCTIVE, then it is more likely to impact positively on the process and product of the oil find. Otherwise, the remnants of the gains in productive zones will be harvested by those in the non-productive zones.

INTRODUCTION CONTD

• Generally, Ghana’s historic 2007 oil discovery is expected to create a wind fall in an extractive sector dominated for centuries by gold mining. As Ghana plans for this new oil wealth, it must also work to extend its efforts on transparency to this new volatile arena. Ghana shall soon be starting to receive oil revenues resulting from the exploitation of its oil revenues. This resource is expected to be VALUE-ADDED in human livelihood, sustainable development and national prosperity.

INTRODUCTION CONTD

• Ghanaians should expect creation of job opportunities and indigenization of knowledge, expertise and technology. Northern Ghana is therefore challenged with the task of propelling its existing and potential labour force to reap the gains of the new oil find.

CONTENT AND CONTEXTUAL FRAMEWORK

• The population of Ghana is the nation’s most valuable resource. It is both the instrument and the objective of national development. The dynamics of the labour force is a function of the nature and pattern of population growth, size, distribution and structure. The impact of these population characteristics on the Ghana’s energy sources vary.

Population and energy interrelation

• The population size of Ghana by the year 2000 was 18, 912, 079. In 1960, Ghana’s population was about 6.7 million and 8.6 million in 1970. Between 1984 and 2000, the population expanded very rapidly. It rose from 12.2 million in 1984 to 18.9 million in the year 2000, growing at an average annual growth rate of 2.7 per cent, tripling in size in four decades (1960-2000)

CONTD

• Both the total population size and rate of growth per annum exhibit an increasing trend between 1960 and 2000. This expansion is expected to continue (given the current trend of behaviours). The fast growing population demands large amounts of energy for survival. With regard to the oil and gas find in Ghana:

• Minimizing potential negative effects on the management of the economy is crucial

• Public spending should be done judiciously • Maximum transparency and accountability in the collection,

management and use of petroleum revenue and fiscal policy should be exerted

CONTD

• Generating alternative stream of income to support public expenditure in the long run is imperative

• Spending – saving challenges should be well addressed

CONTD

• Can the Northern Population Structure, spelling its labour dynamics, survive positive shocks?

Trends in Population growth rates in Northern Ghana; 1960-2000 and the projection for 2010 and 2020

Population  Rate of growth per annum

Region  1960 1970 1984 2000 1960-1970 1970-1984 1984-2000

All regionsNational)

6,726,00 8,559,313 12,205,514 18,912,079 2.4 2.6 2.7

Northern 531,600 727,618 1,162,645 1,820,806 3.2 3.4 2.8

Upper East 468,600 542,858 771,584 920,089 1.5 2.5 1.1

Upper West 288,700 316,865 439,161 576,583 1.0 2.3 1.7

Projected populations, Northern Ghana – 2010-2020

Projected population

Region  2010 2020

All regions 23,458,808 28,511,828

Northern 2,253,484 2,705,785

Upper East 960,706 973,194

Upper West 639,264 687,617

CONTD

• The fast growing population demands large amounts of oil to survive. To meet this demand, the emerging oil industry will have to be managed with national character of equity, transparency and accountability so as to avoid unnecessary population drifts from oil-deprived zones in Northern Ghana to oil-rich zones in Southern Ghana.

Socio-Demographic Indicators that Labour Status, Northern Ghana

Variable Regional IndicatorN/R UER UWR NATIONAL

Literacy Male = 30.3Female =17.4

M = 29.7F = 18.1

M = 34.0F = 21.8

M = 66.4F = 49.8

Economically Active pop. (15-60) in wage Employment

M = 52.1F = 47.9

M = 47.6F = 52.4

M = 47.3F = 52.7

M = 50.0F = 50.0

Labour force participation 15 years +

M = 79.3F = 69.4

M = 74.5F = 64.8

M = 78.1F = 70.4

M = 76.7F = 72.7

Pop o – 14 years 46.3* 43.4 43.4 41.3

Average household size

7.4* 6.4 7.2 5.1

% of households headed by females

14.1 22.2 18.3 34.3

Total Fertility Rate, Northern Ghana

Region Total Fertility Rate Remarks/observation

National Average 4.0 children per woman

-

Northern 6.8 Highest country wide

Upper East 4.1 Within National Average

Upper west 5.0 Above National Average

Literacy Rate, Northern Ghana

Region Educational/Literacy VariableNo. Education LiteracyMale Female Male Female

National 14.0 21.2 71.3 58.6Northern 48.4 65.7* 38.3 23.6*Upper East 34.4 49.0 36.0 27.0Upper West 30.2 48.1 45.2 28.4

Occupation of men and women 15-4 9 years, Ghana

Occupational Sector Participation by set

Male Female

Agriculture 41.0 30.0

UNSKILLED mannual 1.0 < 1.0

SKILLED mannual 22.0 11.0

Sales, services 12.0 51.0

Clerical 9.0 2.0

Professional/Technical/Managerial

11.0 5.0

CONTD

• The demand for petroleum products by the population serves it road, rail, maritime and air transport needs. Road transport accounts for 92 – 93 percent of petroleum energy use from 2000 – 2004. This is followed by air transport (6 – 7 percent) while rail and maritime account for 0.3 percent and 0.1 per cent respectively Road transport is the dominant fuel consumer in the transport sector. It accounts for 99.7% of gasoline consumption in Ghana based on fuel sales from Tema oil Refinery (2000 – 2005).

Source:Ghana vehicular Emission Inventory, 2007. Courtesy Bolchie, George 2010 ISSER, UG, Legon.

CONTD

• There is no doubt that Ghana’s population requires oil and other forms of energy to survive. The dilemma however is that Ghana’s population Growth and the available energy resources are inversely related. That is, as the population grows very fast the every resources are shrinking and the consumption threaten to undermine the well-being of the population.

• For Northern Ghana that relies so much on wood fuel, sustainability in threatened by the massive destruction of the trees the poverty nature and the rural nature is often unfavorable for biogas use.

CONTD

• Nationally, about 90% wood fuels are obtained directly from the natural forest and savannah woodlands but the transitional and Savannah zones particularly are the major sources of wood fuel preferred by most Ghanaian homes. The remaining 10% of wood fuels are obtained from logging and saw milling waste (energy commission, 2006) wood fuel is the traditional energy source of Ghana. Its consumption increases with expanding population size of the country.

• It is feared, that with the oil and gas find, poverty– ridden Northern population may not be active participants in its management process.

CONTD

• The prediction is based on the facts that.• The population is largely illiterate, therefore likely to be

engaged in “residual” jobs associated with the industry.• Population movement to oil-rich zones may be the rule

rather than the exception.• Farming activities back home in the North may suffer.• As more young people move down South, more adults

back North continue to reproduce to replace the “temporarily absent population” and the expected gains from the oil find maybe in Jeopardy for the Northern people

OVERCOMING FEARS

• DCEs should provide offices for MPs• Chiefs should participate in oil and gas

discussions• Imam and Pastors should preach about oil and

gas in churches and mosques• Teachers should teach students about oil and

gas issues• The speeches of Regional Minister and DCEs

should touch on oil and gas issues

THANK YOU