Ghana secures $6.5bn in revenue since commercial production of crude oil

Ghana secures $6.5bn in revenue since commercial production of crude oil

Ghana has secured $6.5 billion in revenue since it started earning from the commercial production of crude oil in April 2011.

This was captured Petroleum Holding Fund and Ghana’s Petroleum Accounts at the New York Federal Reserve.

The amount, according to the report was accrued from Ghana’s earnings from its share of crude exports and taxes, rental charges and other payments made by the oil exploration firms operating on the country’s oil fields.

Utilisation of the Fund

Based on the report, all the foreign oil firms since April 2011 have paid about 1.2 billion dollars to the state, in form of taxes and rental charges. 2 billion dollars had gone to the Ghana National Petroleum Authority to finance its operations since April 2011.

Also 2.5 billion dollars has been advanced to government to finance some projects identified in in the budgets over the years, or can be described as the Annual Budget Funding Amount.

Performance of the Stabilisation and Ghana Heritage Fund

582 million dollars was put in the Ghana Heritage Fund, that is fund that is supposed to be set aside for future generations, while the Ghana Stabilization Fund, had $1.3 billion, totaling $1.9 billion.

However, due to some deductions that have been made, it’s now left with a total amount of $844 million.

In H2 2020, the Ghana Petroleum Funds returned a net realised income of US$8.93 million compared to US$8.57 million in H1 2020. The Ghana Stabilisation Fund contributed 10% or US$0.88 million to total net income compared to US$1.43 million in H1 2020 whilst GHF contributed 90% or US$8.05 million compared to US$8.57 million in H1 2020.

The GPFs reserves at the end of H2 2020 was US$844.78 million (GHF was US$644.79 million and GSF was US$199.99 million) compared to US$741.88 million in H1 2020 (GHF was US$608.54 million and GSF was US$133.34 million).

Withdrawals from the GSF in the amount of US$307.54 million in H1 caused the fall in the GPFs reserves and led to a fall in realised income for the year 2020.

Recommendation from committee overseeing Petroleum Holding funds

The committee in their report noted that in the coming months, policymakers’ main focus will continue to be on the evolution of Covid-19 situation as it relates to infections, fatalities and associated medical interventions.

If the situation deteriorates, it may create a flight to quality with safe haven bond yields falling and impacting positively on the marked-to-market valuations of the portfolios of the Ghana Petroleum Funds in the near term

Source: JoyOnline

Association of Ghana Industries

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