In their efforts to industrialise, African states are looking beyond the traditional path of transition from agrarian to industrial economies by seeking to leverage on their natural resources, both in/on land and ocean, to power industrialisation. In this blog post, drawing from a new article in Journal of Agrarian Change, that agrarian political economy theories of industrialisation need to be advanced to cover the ocean and offshore petroleum production in Ghana.
The classic agrarian question seeks to grapple with the role of the dispossessed peasantry in capitalist transformation. In advanced capitalist countries, land grabbing and enclosure served both to provide the economic surplus needed for industrialisation and workers with little else to sustain themselves other than selling their labour power.
As Samir Amin and many others have noted, this process was not replicated in peripherally capitalist countries. Natural resources and cash crops are exported from across Africa with only minimal benefit to local economies. Since the production of these commodities usually lack significant linkages to industrialisation, extractive industries are essentially “enclave” economies in Africa.
The failure of neoliberal structural adjustment and rise of resource nationalism in a period of a commodity price boom had a dramatic impact on resource-rich, peripherally capitalist African countries such as Ghana. It also spurred new development thinking with regard to the ocean economy and its role in structural transformation.
As with capitalist penetration in agriculture, the scramble for petroleum by global oil capital in Ghana’s ocean frontier has dispossessed fisherfolk and peasants of their means of organising (re)production. Land and ocean grabbing has impacted local livelihoods immensely. These territories originally used for fishing and farming are increasingly valued not for their agricultural productivity, but for energy resources and infrastructure.
International oil companies (IOCs) have profited greatly, but so too has the Ghanaian state. Where previously oil and gas could only be a “curse”, we saw in the early 2010s at least the possibility of petro-development – an oil-led pathway for capitalist industrial transformation through local content policies (LCPs).
Whether or not the potential of petro-development was anywhere realised and whether or not such potential still exists in the waning days of carbon capitalism as the world transitions to renewable energy, our research in Ghana’s oil-producing coastal communities has reinforced for us that the tools of agrarian political economy are appropriate for understanding a new moment of capitalist dispossession and social transformation. We therefore propose a new focus on the industrial question raised by the penetration of extractive capital and resource nationalist response or resolution of this question through local content, local linkages, and industrial development.
For Ghana, realising the potential of petro-development hinges on the state being able to invest the surplus extracted from the oil and gas industry for industrial development and putting in place targeted and well-thought-out LCPs that require the industry to use local goods and services and foster linkages with the wider domestic economy.
Productive use of the agrarian surplus, either by emergent capitalists or by the state in later industrialising countries was key to the development of capitalism. Beyond that, industrial policy and broader state intervention was essential for all cases of industrial development after Britain, which industrialised first. The problem is, as Ha-Joon Chang argues, that since the 1980s wealthy states have been blocking poorer states from using industrial policy. They were in his words kicking away. LCPs in the petroleum industry, which engender strong linkages with industrialisation, are possible despite the objections of wealthy nations because of the specificity of oil, its uniqueness as a commodity, and its strategic economic and military value to the global economy.
Ghana designed its LCP framework in 2010 and passed its local content regulations in 2013. The task for the Ghanaian state is to draw resources from the oil/gas industry to power industrialisation in other sectors of the economy. One way of doing this is to view the offshore oil/gas industry as a form of industrialisation. Indeed, the industry uses some of the most sophisticated technology ever invented to explore, drill, and pump oil/gas from the ocean. The state’s role is to ensure the transfer of technology and knowledge to Ghana, ideally with the state taking control and management of the oil/gas industry to foster industrialisation.
For the people who live in communities near sites of extraction, livelihood activities pivotal for social (re)production are negatively impacted. Ghana has a long history of ocean and land-control grabbing, with deleterious dispossessory effects. Whereas the small-scale fishers blame the oil/gas companies for the depletion of fish stock, the latter and the Ghanaian state blame the fishers for unsustainable fishing. What, in our opinion, is indisputable is that, like industrial fishing, the processes and mechanisms of the offshore oil/gas industry are inherently in conflict with the modes of the social (re)production of the coastal communities.
LCPs are not a solution to this dilemma. In the inevitable conflicts between the inhabitants of the oil district and the IOCs, the Ghanaian state sides with and promotes the interests of the companies and defends these interests with coercive force. At best, if properly implemented, LCPs may spur industrialisation in cities such as Accra, Takoradi, and Tema. They are not compensation for loss of traditional livelihoods. Therefore, the state must also pay attention to redistribution of part of the surplus from resource extraction.
Even if the window for petro-development has closed, there are still important lessons from our reinterpretation of the classic agrarian question and formulation and analysis of the industrial question of capital. Our analysis of the petroleum industry in Ghana shows the need to look beyond the agrarian sector for the inputs required to spark industrial transformation—whether that involves looking to other aspects of the blue economy or looking to the mining of critical minerals needed for the green transformation.
For African countries to use the extractive industries to foster structural transformation, they must be prepared to cope with the inherent dispossession and dislocation of prior users of land and ocean that are inevitably engendered by this transformation. Therefore, scholars and activists that are interested in processes of agrarian change and capitalist industrial transformation in Africa should equally focus their attention in that direction.
Author: Jesse Salah Ovadia
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