Ghana risks scaring off foreign money if its government fails to quickly clear up confusion over two major deals involving international firms. The government is in the process of reviewing a multi-billion dollar deal by Exxon Mobil to get into Ghana�s offshore oil sector.
On Friday, is also announced that it was also considering a thorough renegotiation of British cell phone company Vodafone�s $900 million purchase of a stake in Ghana Telecom in August 2008 after an intergovernmental commission said it appeared unconstitutional and unfair.
�Both of these stories are sending very bad signals to the international investment community,� said Sebastian Spio-Garbrah, risk analyst at Eurasia Group in New York. Both cases do appear to warrant some government investigation, but in the meantime, the signal is a negative one.�
The outlook could be dangerous for a nation that will need to rely on foreign money and expertise to build up a fledgling oil industry and make a push to move from second to first place among world cocoa procedures, analysts said.
The country, which has seen foreign direct investment surge in recent years to near $1 billion per year, according to the World Bank, also aims to start producing oil from its huge offshore reserves in 2010 in the hope of filling government coffers and reducing unemployment that stands near 20 per cent.
Current oil production is trickling out at 6,000 barrels per day � a fraction of the output of regional heavyweights like Nigeria and Angola, which can pump around 2 million bpd. Earlier this month, however, Ghana sent shock waves through the oil industry by calling Exxon Mobil�s reported multi-billion dollar deal to buy a stake in the Jubilee field from private equity backed Kosmos Energy illegal.
�The government needs to track carefully on the right course or risk damaging future investment,� said a London-based analyst who asked for anonymity.
The State Oil Company, Ghana National Petroleum Corp, has said that it is interested in purchasing the stake and has the money to do it, threatening to overthrow Exxon�s bid.
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