Ghana’s petroleum revenue dropped in 2019, says PIAC
PIAC says the decline in the nation’s revenue resulted from a sharp drop in international oil prices experienced last year
Ghana News Agency (Abesim) – Ghana’s annual petroleum revenue dropped in 2019, though production of crude oil in the country’s three major fields witnessed a sharp increment.
The 386,460,893 barrels of crude oil produced from the three oilfields – Jubilee, Tweneboa Enyenra Ntomme and Sankofa Gye Nyame – in 2019 fetched the nation US$925 million as against US$977 million for 62,135,435 barrels produced in 2018.
A member of PIAC, Nana Agyenim Boateng, speaking at a Bono regional town hall meeting held at Abesim, near Sunyani, said the nation’s oil sector was doing well despite the drop in revenue last year.
PIAC organised the meeting to update stakeholders on the highlights of the 2019 annual report on the management and use of oil revenue in the country.
Boateng said so far petroleum revenue had fetched the country US$5.91 billion since actual crude oil production started in 2011, and expressed worry about the country’s overreliance on oil revenue as a key funding source for the government flagship Free Senior High School programme.
“Petroleum revenues have been used to tackle too many national problems at the same time, weakening the potential impacts of oil revenues on the socio-economic development of Ghana,” he added.
In a speech read on her behalf, Evelyn Ama Kumi-Richardson, the Bono Regional Minister, said the region had benefited immensely from petroleum revenue. This has been channelled into construction of roads, health and educational infrastructure.
Revenue drop
The country’s fears of losing substantial domestic revenue through the devastating impact of the coronavirus pandemic have intensified. Bank of Ghana data shows only about 18% of the oil revenue target was realised in the first quarter of this year.
According to the Fiscal Development Report (May 2020), out of the GHC1.9 billion projected to be reaped from the oil sector, only GHC331 million came in, a shortfall more than $82 million from the target.
This comes as no surprise, as crude oil prices plunged in March and April, falling to below US$20 at one point. The price uncertainty was one of the effects of the pandemic – more so because of a price war between Russia and Saudi Arabia in which the former refused to reduce oil production.
In the 2020 Budget, revenue from crude oil was projected to fetch an average US$62.6 per barrel, hence the shortfall in revenue.
Finance Minister Ken Ofori-Atta says the government estimates that it will lose more than GHC5.6 billion, even if the price climbs to US$30 per barrel.
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