AfDB President cautions Ghana, others on usage of oil cash for populist policy
The President of the African Development Bank (AfDB), Donald Kaberuka, has told Ghana and other African countries that joined the club of oil and gas producers not to use the monies realized from the natural resource for populist policies such as increase of wages of workers.
Instead, the oil cash should be invested in education and roads as well as supporting traditional sectors to avoid the “oil curse” trap, said the former Rwandan Finance Minister.
Ghana, Kenya, Mozambique, Tanzania and Uganda have all discovered oil and gas in recent years, thrusting them into crossroads between following the likes of diamond-rich Botswana into prosperity or the likes of Nigeria into over-dependence on oil.
In an interview with the Reuters news wire April 3, 2012, Donald Kaberuka said governments should resist using windfalls from oil and gas exports to pursue populist policies like sharply raising public sector wages.
“(They should) avoid using the resources to rapidly increase recurrent expenditure. That is what people will be expecting but that would be the wrong thing to do,” Reuters quoted Mr Kaberuka as saying during the interview.
Ghana’s President Prof. Atta Mills on February 16, 2012 announced at Parliament that the country’s wage bill has been increased to GH¢5 billion. He said the minimum wage has been increased from GH¢2.55 to GH¢4.48.
According to him, other countries have done well without use of oil and other minerals citing nations in East Africa as examples.
“This region (East Africa) has done very well without oil, without gas, without minerals. These are finite resources. In other countries they have become a curse, so make the right public policy choices,” Kaberuka said, according to Reuters.
By Ekow Quandzie
yes you have well spoken
Increase of wages sterm corruption in Both public sector and other institutions.
Ghana for 55years nothing to show for and Rather sad that the African nations we all sought for have turned out leaders who are at best collaborating with the Western nations as “development partners” to take loans and siphon most of it to private pockets and fail to deliver basic infrastructures for their nations development. Cedi is on free fall due to heavy imports of cereals, common things like tooth picks. Foreign companies are not using Ghanaian Banks for deposits in Ghana Cedis as nationals demanding US dollars. This must be stop period.
we have weak leadership – period! yes, after 55 years post colonial rule, the leaders of the country have turned themselves into puppets, allowing foreigners, especially the Chinese, to make fools out of them. a country with very strong natural capital, minerals, oil, etc, and we cannot provide basic social services and infrastructure. these foreign companies are just riding on our riches and our leaders are so blinded by theor greed, lack of accountability and stupidity. since we discovered oil, foreign companies have just lined up ready to dig our sovereignty away. all over the western region, local chiefs and assembly men giving away land and property to foreigners while the locals suffer. and it goes on and on. if we don’t start to rebuild our country, it will be too late and future generations will suffer most.