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Curse of oil follows Ghana’s former president

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By William Wallis in London
Published: October 25 2010 17:32 | Last updated: October 25 2010 17:32

John Kufuor, whose assured bass tones provided soothing accompaniment to

the strains of African diplomacy during his eight years as president of

Ghana, cuts a somewhat uncertain figure these days.

He has had plenty of good works to see to – promoting peace and

combating hunger – since becoming last year one of only a handful of

African leaders to step down for an elected rival after completing a

two-term limit as president.
But as much as a call to service, his hyperactive travel provides escape

from attacks on his reputation at home, where the onset of oil

production has injected fresh venom into elite rivalry.

Ghana is on schedule to start producing oil on December 1, an event with

the potential to transform the country's economy. However, in an

interview with the Financial Times in London Mr Kufuor, 71, expressed

“For once I am almost tempted to believe it when people say that oil

finds are a curse,” he said.
Recriminations, investigations into alleged corruption and the bearing

both have had on tensions between Ghana and Kosmos, the US company that

first discovered the oil in 2007, may have something to do with this.

“That word corruption is the most abused word. They say it, they

allege it, you challenge. There is no proof and yet they won't leave

you alone,” Mr Kufuor said. “Spreading the wealth all over to make

everybody hopeful: that should be the overriding preoccupation.”

Earlier this year, the US Department of Justice closed an investigation

into the link between Kosmos and EO, a small company founded by Kwame

Edusei and George Owusu, two of Mr Kufuor's political allies.

In theory they now stand to gain some $200m from their stake in the

Jubilee oilfield, financed by the Texan company.
Washington has informed all concerned they found no evidence of

violations of the Foreign Corrupt Practises Act. Yet suspicions linger

in Ghana, where the relationship between the two companies, both of

which deny any wrongdoing, is still under investigation and has become a

complicating factor for Kosmos as it seeks to cash in on its oil

discovery – one of the biggest in Africa in a decade.

Ghanaian authorities are investigating whether EO used access to senior

officials to gain the oil block back in 2004, when Mr Kufuor was

president, and win a more favourable contract both for themselves and

Kosmos. Wood Mackenzie, the industry analysts, estimates the state

stands to gain some $3.8bn more under the terms of a neighbouring field.

Mr Kufuor, however, said Kosmos won better terms because it came earlier

and invested in an area where no 3D surveys had been made.

Explaining his relationship with Dr Edusei and Mr Owusu, the E and O of

the Ghanaian company, Mr Kufuor said he had encouraged both men during a

meeting in Houston in 1999 to find exploration companies willing to come

to Ghana, should he be elected president.
“I couldn't understand why Nigeria to the east and Côte d'Ivoire

to the west had all struck oil, and Ghana sat in between always moaning

about poverty,” he said.
Mr Kufuor is unapologetic about his friendship with Dr Edusei, whom he

later appointed as ambassador first to Geneva and then to Washington,

and said both he and Mr Owusu played an honourable role in driving the

Jubilee discovery.
“He [Dr Edusei] wasn't a man of straw I picked to go and front. He

was the chairman of my party in the whole of North America,” said Mr

But therein lies the grounds for attack by rival politicians, who accuse

Mr Kufuor of having favoured family and friends during his time in

The former president denied he had anything to gain personally from the

Kosmos block or any other.
“I tried to give all I had to move Ghana forward . . . I ended up very

honourably expecting things to carry on smoothly,” he said.

“Unfortunately things haven't worked out that way.”

Copyright The Financial Times Limited 2010.

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