The Impact of the Ghana’s Oil Discovery on Land Investment and Its Implications

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Abstract: The study was conducted to assess the impact of ghana’s oil discovery on the land values, the extent of acquisition, and their implications of the land investment in the people, agriculture and the environment in the Cape Three Points area, which is the communities close to the oil field. Questionnaires were designed and administered to collect data from the chiefs, queen mothers, family heads and opinion leaders of the area. Results of the studies indicated that there had been an increase of about 2000% in land values from 2007 to 2011. Also there was an increase in demand for lands in the Cape Three Points with acquisitions usually ranging from 10 acres to over 600 acres. It also emerged that the livelihood of the inhabitants of Cape Three Points was threatened due to the conversion of arable land to non-agriculture uses. This change in land uses has significant negative impacts on land degradation and its related reduction of agricultural and food production in the area. The technical difficulties of assessing land degradation, the weakness of existing databases, and the poorly explored linkages between land degradation and other aspects of rural development were some of the limitation of the studies. The study increased awareness of the chiefs and other land owners to reserve land for the future generation and for agriculture purposes. The study drew government’s attention through the Ahanta West District Assembly to the planning needs of the towns in the Cape Three Points to streamline land use of the area.

Key words: Cape Three Points, oil, agriculture, land, degradation.

1. Introduction

On June 18, 2007 a consortium of oil companies—Kosmos, Tullow, Anadarko Petroleum, Sabre Oil and Gas in conjunction with GNPC (Ghana National Petrolum Cooperation) announced the discovery of oil and gas accumulation in the territorial waters of Ghana 33 miles off the shores to the West of Cape Three Points in the Ahanta West District of the Western Region, Ghana [1]. Though the oil and gas accumulations are discovered miles into the sea, there exists an intractable link between the discovery and land investment in the area. Primarily the government, corporate bodies and individuals would require land in these areas for various activities. These investments would generally be classified under residential, commercial, industrial as well as other uses.

Since proximity has become a crucial issue in these investments, towns within the immediate environs and the catchments area in general have become the focal point of most land investors.

For instance, Ref. [2] reports of a massive rush for lands at Cape Three Points Area by speculators, private individuals and cooperate bodies. Hence towns like Attenkyen, Akwidaa, Butre, Egyambra, Princess Town, Axim, Half Assini etc. which fall within the immediate environs of the oil field have suddenly become places of interest for land investors. Unfortunately, most of these towns are not well developed and are without proper planning schemes or land use plans and even where planning schemes exist they are not appropriate to cater for the current land requirements. Drilling of the oil will have a very great impact on land activities, notwithstanding the fact that the oil drilling is a way into the sea. The desire for individuals and corporate bodies to own land in these areas is inevitable. Hence, the need for proper planning of towns can not be over emphasized. Where towns are left to develop on their own without any proper planning, major disasters such as flooding, fire outbreaks, diseases etc., are always imminent.

The purpose of this research was to investigate into:

the nature and extent of land investment;

the impact of the land investment on the socio-economic life people of Cape Three Points;

the implication of change in land use on agriculture and the environment;

the current planning schemes of the area;

drawing government’s attention to the planning needs of the towns in the Cape Three Points Area.

This was done through interviews and questionnaires with chiefs, family heads and members of the communities where the research was conducted. 1.1 Background of the Study Area

Ghana, which lies in the center of the West African coast, shares borders with the three French-speaking nations of C?te d’Ivoire to the west, Togo to the east, and Burkina Faso (Burkina, formerly Upper Volta) to the north. To the south are the Gulf of Guinea (Fig. 1). With a total area of 238,533 square kilometers, Ghana is about the size of Britain. Its southernmost coast at Cape Three Points is 4°30’ north of the equator. From here, the country extends inland for some 670 kilometers to about 11° north. The distance across the widest part, between longitude 1°12’ east and longitude 3°15’ west, measures about 560 kilometers. The Greenwich Meridian, which passes through London, also traverses the eastern part of Ghana at Tema. Ghana is characterized in general by low physical relief. Indeed, the Precambrian rock system that underlies most of the nation has been worn down by erosion almost to a plain. The highest elevation in Ghana, Mount Afadjato in the Akwapim-Togo Ranges, rises only 880 meters above the sea level. There are, nonetheless, five distinct geographical regions which are: Low plains stretch across the southern part of the country, the Ashanti Uplands, the Akuapim-Togo Ranges, the Volta Basin and the high plains which occupies the northern and north-western sector of the country. Like most West African countries, Ghana has no natural harbors. Because strong surf pounds the shoreline, two artificial harbors were built at Takoradi and Tema (the latter completed in 1961) to accommodate Ghana’s shipping needs. Cape Three Points refers to the three major capes being the southernmost part of the country and serves as a major landmark for navigation. Some of the towns around this area are Akwida, Attenkyen, Aketekyi, Prince’s Town and Egyambra which are linearly located along the South-Western Coastal Belts of the country. Beside these three major capes are several other minor capes spanning along the coasts of these towns which portray a beautiful coastal belt. The name Cape Three Points has been narrowed down to one particular town locally known as Attenkyen. During the research it is found out that there is another town in the area known as Katakow which is about one kilometre away from Attenkyen. In this study any reference to Cape Three Points is limited to these two towns, namely, Attenkyen and Katakow. Another important feature in Cape Three

Points is the forest reserve which was declared a forest reserve in 1949 and is the only primary forest in Ghana that is close to the sea and recognized for its biodiversity. No education facilities is above junior high school. Cape Three Points has no basic facilities such as electricity, telephone and potable drinking water. Agricultural is the main activities engaged in by the people. A larger section of the populace is also engaged in small scale fishing. The tourism potentials of the towns can be viewed from both aesthetic and historical points of view. Aesthetically, these towns can boast of very beautiful sandy beaches and are classified among the finest beaches in Ghana stretching from Butre, through Busua, Akwidaa, Cape Three Points, Egyambra, Princess Town to Axim. Very popular among these beaches are the Busua Beach Resort, Miamia Beach Resort, Akwidaa Beach, Axim Beach and Ankobra Beach. Beaches in the Cape Three Points area are signified by a variety of capes, three among which are very outstanding. The Ghana Port and Harbours Athourity (GPHA) lighthouse(Fig. 2) which provides direction to vessels navigating through that point stands on the West Cape which happens to be the deepest among the capes. Egyambra which is close to Cape Three Points is also known for its crocodile pond, where these crocodiles are quite distinct because of their good taste for Coca Cola drink. Some of the historical sites are the Fort St. Antonio at Axim, Fort Friederichsberg located at Princess Town, and Fort Appollonio at Beyin (Fig. 3).

Despite all the potentials, there is no meaningful planning of developments in Cape Three Points and its neighbouring towns. There are no proper market facilities, lorry parks etc.. The buildings do not conform to any development pattern as residential and commercial activities can not be differentiated. The settlements are very compact and allow no means for vehicular movement hence, vehicular movement within the towns are impeded by the haphazard location of structures.

1.2 Environmental Damage in Oil and Gas Producing Countries

The exploration and production of oil and gas in any country is followed with many environmental challenges. The environmental problems begin when the start of seismic survey through exploration and continue to the end of the operation and abandonment. Seismic survey could lead to acoustic emission and accidental spills of chemicals that pollute the sea;exploratory activities which could cause drilling discharges, atmospheric emissions and spills lead to marine and air pollution affecting fishing. Development and production of oil cause operational discharges, atmospheric emissions, waste disposal and noise, leading to ground and marine pollution. Whenever oil field is abandoned, it is always accompanied with the removal of structures, waste disposal and dumping at sea leading to endangered fishing and navigation [3].

Oil spills in the petroleum industry in particular have been a major concern because of recorded incidents like the Amoco Cadiz (1978), which spilled 220,000 tons of oil; the Exxon Valdez (1989), spilling 40,000 tons of oil and the Braer (1993), spilling 85,000 tons of oil [4]. These oil spills caused ecological disasters affecting fish, birds, and mammals [4].

2. Research Methods

To investigate the impact of the oil discovery on land investments, its implication in socio-economic activities of the people, agriculture and the environment of Cape Three Points, primary data was gathered through two rounds of questionnaire surveys and face-to-face discussions. In order to evaluate the clarity and how respondents were going to answer the questions, a pilot survey was conducted before the first round of the survey. Out of the 35 distributed questionnaires in the first round of survey, 26 valid responses were received, representing a response rate of 74.3%. The second round of survey was conducted and was extended to Princes Town and Egyambra in the same region two years later in order to check the results of the first round survey.

Thirty four respondents were involved in the second survey. Again, respondents were required to have basic knowledge about land acquisition in the case study area. Face-to-face discussion was emphasized in this survey; the results are mirrored in the discussion later. The outcome confirmed the results from the first survey. The questionnaire had four sets of questions:

(1) Respondent characteristics: Demographics on the respondent’s professional background and organization;

(2) Land demand and values: This set of questions intended to compare the price and demand of land before and after the announcement of oil discovery in the Cape Three Points area;

(3) Land use and planning schemes of the area: Intended to find out if there had been changes in the land-use pattern after the announcement of oil discovery in the Cape Three Points area. And also to find out if there was a planning scheme in the Cape Three Points area;

(4) Conflicts associated with land delivery in the Cape Three Points area: The researchers wanted to find out if the sales of land had generated any conflict. Structured interviews were also used to obtain information from some heads of the relevant public institutions.

This section analyzes the data collected during the research through the administration of the questionnaire and interviews.

3.1 Demography of Respondents

The respondents were made up of six traditional rulers, three queen mothers, two assemblymen and 13 family heads. In all 26 questionnaires representing 74% were received out of 35 questionnaires which were sent out. All the respondents including the chiefs were subsistence farmers with the exception of two assemblymen who were trained teachers. Thirty four respondents were involved in the second survey. They represented: government officers (6%), chiefs (19%), family heads (21%), investors (31%) and opinion leaders from the communities (23%).

3.2 Land Investment in Cape Three Points

A check on land documents received from Refs. [5, 6] from these areas and investigations conducted in these towns showed that land acquisitions in the Cape Three Points area had increased significantly after the announcement of the oil discovery. The research revealed that large tracts of lands had been sold out to people after the announcement of the oil discovery. Data from Refs. [5, 6] as indicated in Table 1 show that between June 2006 and May 2007, only 27 documents were received by the Lands Commission for processing from the Cape Three Points. Out of this number, 52% were for residential purposes, 26% for beach resorts, 15% for agricultural purposes and the remaining 7% for other uses. It could be seen from Table 1 that out of the 27 land documents processed the size for residential purposes was less than one acre. That for beach resorts was between 1 and 10 acres and that for agricultural purposes was above 10 acres with a maximum acreage of 49.7. However, between June 2007 (after the announcement of oil discovery)

and May 2008 a total of 53 documents were received by the Lands Commission for processing. This was almost a 100% increase in the documents received by the Lands Commission over the previous year. Out of this number, 57% were for residential purposes, 30% for beach resorts and recreational purposes, industrial 11% and commercial 2%. Among these documents received, the trends of the sizes were the same as before the announcement of the oil discovery, except that the maximum acreage for lands for industrial and commercial purposes was 600. Table 2 shows that from the year from 2002 to 2006 the average yearly incremental rate in land values at the Cape Three Points was about 23%. However, after the announcement of the oil discovery in 2007, the trend changed suddenly and by the year of 2008 the values of an acre of land in the Cape Three Points was about GH￠4,000.00 which was an increase of about 700% over the value of land before the announcement of oil discovery. A recent visit to the area (second survey) revealed that the current value of an acre of land in the Cape Three Points was about GH￠15,000.00. This then implies that between 2007 and 2011 an increase in land value in the Cape Three Point was about 2,000%.

From Fig. 4, there is a sudden sharp increase in the gradient of the curve after 2006. The slope became steeper after 2008. This behaviour of the curve clearly interprets the sudden increase in the land demand and value in the case study area after the announcement of the oil discovery in 2007.

3.3 Land Use Requirements and Planning Scheme

In investigating the land-use requirement in the Cape Three Point, it was revealed that land-use requirement for agricultural purposes had given way to new uses such as industrial, commercial, hotel, beach etc.. A report from Ref. [7] indicates that Cape Three Points and Egyambra Townships had no planning scheme and only about a quarter of Princess town had planning scheme dating back to 1998, of which the land was mostly schemed for agriculture and residential. The researchers noticed that no policy decision had been taken yet to curb the growing trend in land demand for the area, although the Town and Country Planning Department of the Ahanta West District was embarking on a Programme on the Land Use by Management in the District at the time of the research. According to the chiefs, the Lands Commission together with the Survey Department undertook a duty tour of the Cape Three Points to familiarise themselves with the area and it was their hope that planning of the area would soon begin.

3.4 Conflicts Associated with Land Delivery in the Cape Three Points Area

The sudden upsurge of the land demand in the Cape Three Points has awakened the interest of a lot of claimants to land in the area. The family heads and the chiefs interviewed agreed with the records from the Regional Lands Commission office, Sekondi, which over 30 new families have emerged since the oil discovery announcement. This has resulted in conflicting claims. At the Cape Three Point, parcels of the same land were granted to different investors by the various claimants as was testified by some investors. This has resulted in fierce dispute among the contending parties as well as the investors.

4. Discussion

4.1 Impact of the Oil Discovery on Land Investments in Cape Three Points

Most towns in the Cape Three Points do not have planning schemes and in a larger context, there are no major land-use plans guiding land acquisitions in the area for the various uses yet the area happens to be the focus for land acquisition. After the announcement of the oil discovery, the current research revealed that there had been an increase in demand for parcels of land by investors and speculators for various uses mostly for non-agricultural uses. The reasons accounting for the sudden increased in demand for land in the study area were as following:

(1) Proximity and Easy Accessibility to the Oil Drilling Site

Major players in the oil field would like to take their positions in areas closer to the oil drilling in order to take advantage of proximity so as to save time and cost of transporting materials and workers to the drilling site. Secondly, goods can be transported directly from Takoradi Harbour to Cape Three Points. The area falls within the nation’s coastal belts. It is therefore easy for companies to have seaports to transport materials from the land to the drilling site. Institutions such as banks, real estate developers etc., would want to be closer to the oil sites to facilitate the provision of their services to oil and other companies.

(2) Tourist Attraction

The Cape Three Points also has a lot to offer in terms of tourism because of its beautiful beaches and historical sites. A lot of people from all walks of life would like to travel to the area, due to oil discovery and tourist attraction in the area. Hence the requirement for land for resorts, hotels and guest houses is very paramount.

(3) Profit

Speculators would want to buy these lands at lower prices and resell them to future investors at higher prices. It appeared during this study that most of the people involved in the rush of land were speculators. This had compelled some investors to relocate to Agona Nkwanta the Ahanta West District Capital, where land values were relatively low. It was also noted during the research that most of the acquisitions had not been registered with Land Commission. This situation was attributed to following: multiple sales of the same parcel of land by the same stool/family; multiple grant of the same parcel of land by different stools/families, chieftaincy disputes, improper documentation, illegitimate right of lessors to dispose of these lands, stool-family conflict etc..

Since the area has become very important due to the oil found, it is more important for Land Commission to have records of all lands in the area. The problem of land registration could be resolved if a legislative instrument is enacted compelling the chiefs and family heads in the Cape Three Points to stop selling land. This can be effective if planning schemes are prepared to reflect the current land-use requirement. Stools and families claiming ownership of lands in these areas should also furnish the Lands Commission with their land boundaries to avoid land litigations. Where boundary conflict arises, the entire portion should be vested in the Government until the boundary dispute is resolved. This would ensure that development is not impeded by land litigation.

Even though there is collaboration between the various Land Sector Agencies (Lands Commission, Town & Country Planning Department, The Survey Department and the Office of the Administrator of Stool Lands), these institutions have not yet adopted a single policy direction to forestall the consequences of the surge on land demand for the area. The faster rate of land acquisition in the Cape three Points without the required planning could have a negative impact on the socio-economic well-being of the people and the environment if not well managed.

4.2 implications of the Land Demand on the Socio-Economic Life of the People, Agriculture and the Environment of Cape Three Points

The majority of the populace relies on agriculture for livelihoods. The conversion of arable land to non-agriculture uses threatens the livelihood of the inhabitants of Cape Three Points. This also has significant negative impacts on agricultural and food production in the case study area. The authors’analysis suggests that declining food supplies from Cape three Point (due to land degradation or any other factor) will have only a modest effect on Ghana’s food supplies because of the potential for substitution from other producing areas. However, there could be quite dramatic effects on the people if no alternative source livelihoods are provided, especially in a situation where the people have not acquired the competency to work in the oil field. Since agriculture is the dominant sector in Cape Three Points, the lost of farm lands to other non-agriculture uses would increase the concentration of poverty: landless workers, small tenant farmers, and small farm owners. This would compel the farmers to cultivate smaller and smaller plots, where the soil eventually becomes depleted, or they may expand onto marginal lands-fragile hillsides, semi-arid areas, and cleared forestland. If this practice continues, there would be a major depletion of the forest reservation and woodlands in the area, with hazardous consequences on the ozone layer.

Cape Three Points is also known as the virgin area due to its forest reserved. The influx of oil service industries and other nonfarm groups may also create externalities that contribute to farmland degradation through their use and management of natural resources. These may include urban sprawl, soil pollution from industry or waste management, diversion of local water sources to distant or non-agricultural users, road and infrastructure building practices that erode farm landscapes, and rules to protect biodiversity that restricts agricultural land use and management [8].

The oil and gas exploration in Ghana is offshore. The nearest town to the operation area is Cape Three Points. There are however a number of towns along the coast of the Gulf of Guinea, where the exploration activity is taking place. Another major traditional occupation of the local people is fishing. The sea is therefore their source of economic sustenance. The production and development of the oil and gas itself is likely to generate various environmental problems. Firstly, there could be oil spill and leakages. The consequence is the emission of hydrocarbon elements into the sea destroying sea life. This will have a direct negative effect on the vocation of the local fishing people. Secondly, should there be gas flaring, excess gas will emit toxic chemicals into the atmosphere, causing health problems among workers and people in the locality.

5. Conclusion

A research was conducted to investigate the impact of the oil discovery on the land investment in the close environ of the oil field and came out with the following conclusions: The exploration area is already under economic siege. Corporate institutions and businessmen have descended on the area in search of land, for various economic activities. Land, being a factor of production, is in high demand. The acquisition of land for housing and other commercial activities will directly increase the population of the area. The immediate consequence is the high migration of people to the area, leading to urbanisation with its numerous problems. As a result, there will be sanitation problems, crime wave and social disorder calling for secured facilities.

The study increased awareness of the chiefs and land owners to reserve land for the future generation and for agriculture purposes. The people were strongly advised to send their children to school so that they could take advantage of the opportunities due to the oil discovery in the area.

6. Recommendation

The research therefore recommends that the Cape Three Points be declared a planning area. The Lands Commission can then rely on the planning scheme to process documents emanating from the area. Development control measures should be instituted to ensure that land uses are compatible with the planning schemes.

The Ministry of Lands Forestry and Mines should be swift in acquiring lands in the area for land banks. This will make access to land easier for investors and save the cost and time involved in land acquisition.

References

[1] Ghana National Petroleum Corporation, Discovery of Oil and Gas Accumulation in the Territorial Waters of Ghana, Ghanaian Daily Graphic report, Accra, June 18, 2007, pp. 1, 3.

[2] J.K. Adda, Massive Rush for Lands at Cape Three Points Area, Ghanaian Daily Graphic report, Accra, Mar. 8, 2008, pp. 1, 3.

[3] Z. Gao, Environmental regulation of oil and gas industry, CEPMLP Discussion Paper, DP16, 1997.

[4] S. Patin, Environmental Impact of the Offshore Oil and Gas Industry, SciTech Book News, Book News, Inc., USA, 1999.

[5] Land Title Records, Western Regional Land Commission, Sekondi, Ghana, 2010.

[6] Land Valuation Records, Regional Records, Western Regional Land Valuation Board, Sekondi, Ghana, 2009.

[7] District Records, Town and country planning report, Ahanta West District Assembly, Agona Nkwanta, Ghana, 2010.

[8] S.J. Scherr, S. Yadav, Land Degradation in the Developing

World: Implications for Food agriculture, and the Environment, Status report, International Food Policy Research Institute report Washington, D.C. USA, May 1996.