Ghana earns unimpressive $6.5b from oil in 10 years
The amount is an equivalent of 9.97 per cent of 2020 Gross Domestic Product [the total monetary value of all the finished goods and services produced in the country], and 20.98 per cent of the total $31.22 billion petroleum revenue in 10 years.
The remaining 79.02 per cent of the $31.22 billion earned in the 10-year period had gone into the hands of foreign entities.
Professor Kwame Adom-Frimpong, Chairman of PIAC, at the launch of the 10-year assessment report of Ghana’s Petroleum Revenues, made the disclosure.
He said: “Cumulatively, we estimate that about $31.22 billion of value has been generated from all of Ghana’s three producing fields, comprising both entitlements due to the contractor parties and the Ghana Group.”
He added that: “The Ghana Group has earned $6.55 billion in total petroleum receipts between 2011 and 2020, equivalent to 9.97 per cent of 2020 GDP.”
Carried and Participating Interest (CAPI) had generated the highest share for Ghana, accounting for 58 per cent ($3.81 billion of the total $6.55 billion revenue earned).
Royalties accounted for 25 per cent ($1.64 billion), while Corporate Income Tax was 17 per cent ($1.08 billion).
Meanwhile, of the $6.55 billion earned by the country, the Annual Budget Funding Amount (ABFA) had been allocated the highest amount of $2.6 billion (40 per cent) over the period.
It was followed by the Ghana National Petroleum Cooperation (GNPC), $2.0 billion (30 per cent), the Ghana Stabilisation Fund (GSF), $1.39 billion (21 per cent), and the Ghana Heritage Fund (GHF), $586 million (9 per cent) of the total allocation.
The Committee recommended that: “As a matter of priority, the Minister of Finance should forward to Parliament for approval the long-delayed investment policy and qualifying instruments for the overall management of the Ghana Petroleum Funds, which was drafted by the PIAC and approved by the Minister in 2020.”
In an interview with the Ghana News Agency, Dr Emmanuel Steve Asare Manteaw, Former PIAC Chairman, said: “this does not paint a good picture about the country.”
He noted that globally, countries that had made the most from their natural resources were those which were actively involved in the extraction of their resources through national oil companies or shares in the operations of the partners.
The Policy Analyst advised the State to ensure that: “In the negotiation of the fiscal terms, you buy more equity into your own oil. The Government needs to increase our equity stake, which is what GNPC was trying to do with AKER, and has done with the Jubilee field by acquiring additional seven per cent.”
Reverend Dr Kwabena Opuni Frimpong, who chaired the event, called on the media, academia, traditional and religious leaders, and various political parties to ensure that their work supported PIAC to ensure that the country earned more from petroleum revenues.
Mr Andrew Kofi Egyapa Mercer, the Deputy Minister of Energy, said the country had not earned enough from its petroleum resources, adding that: “It tells us that as a Ministry we need to strive hard to increase our exploration and production activities.”
He said the amendment made to the local content regulations had introduced, “a channeling strategic partnerships to reserve specific services to Ghanaians, and made many indigenes participate in the upstream space.”
The report assessed Ghana’s management and use of petroleum revenue over 10 years (2011-2020) in line with the requirements of Ghana’s Petroleum Revenue Management Act (PRMA), 2011 (Act 815, as amended by Act 893) and Petroleum Revenue Management Regulations, 2019 (L.I. 2381).
It encompassed an assessment of the performance of the institutions assigned duties by the PRMA for the past decade and a thorough evaluation of the socio-economic impact of the management and use of petroleum revenue on the development of Ghana.
The study was carried out by Stobe Law Limited, and funded by the State Secretariat for Economic Affairs (SECO) of Switzerland through the Governance for Inclusive Development programme (GovID) of Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.