Ghana Bags Over US$1 billion from Crude Oil Despite Economic Headwinds

According to the Bank of Ghana (BoG), Ghana’s Petroleum Holding Fund (PHF) encountered both challenges and opportunities in 2023, reflecting the broader economic trends that influenced crude oil prices and revenue inflows.Despite facing economic headwinds, Ghana managed to secure a significant sum from its crude oil exports, with the PHF receiving a total inflow of US$1.06 billion in 2023. While this figure represented a slight decrease from the US$1.43 billion recorded in the previous year, it highlights the resilience of Ghana’s petroleum sector amidst fluctuating market conditions.

The first half of 2023 witnessed a decline in crude oil prices, dropping from US$84.97 per barrel to US$75.68 per barrel. This downward trend can be attributed to various factors, including supply restrictions imposed by OPEC and concerns about a global recession amid China’s slowing reopening pace.Despite these challenges, Ghana continued to navigate the volatile oil market with determination and adaptability. The PHF, serving as Ghana’s designated public fund for receiving and disbursing petroleum revenue, played a pivotal role in managing these inflows.

Throughout the year, the fund received substantial amounts, including US$521.87 million in the second half of 2023, slightly lower than the US$540.15 million received in the first six months. Comparatively, the same period in 2022 saw higher receipts at US$696.82 million, highlighting the fluctuating nature of oil revenues.Key revenue streams for the PHF remained consistent, comprising lifting proceeds, surface rentals, interest income, and corporate taxes. Notably, crude oil liftings in the second half of 2023 generated US$319.74 million, with the Jubilee field contributing the most significant share, underscoring the importance of this asset in Ghana’s oil portfolio.

GHF, GSF Achieve Positive Returns

Furthermore, the Ghana Heritage Fund (GHF) and Ghana Stabilization Fund (GSF) achieved positive returns during the first half of 2023. By year-end, the GSF balance stood at US$190.4 million, while the GHF reached US$1.05 billion, highlighting the prudent management of these funds despite market volatility.

In terms of disbursements, the PHF allocated US$466.87 million as petroleum revenue to beneficiaries during the first six months of 2023, including the Ghana National Petroleum Corporation (GNPC) and the Annual Budget Funding Amount (ABFA). Other proceeds amounted to US$202.126 million, contributing to various developmental initiatives and infrastructure projects across the country.

A notable development in 2023 was the strategic withdrawal of US$106.5 million from the Ghana Stabilization Fund in the second half of the year. This move underscored the fund’s role as a strategic reserve utilized to address fiscal needs, surpassing the first-half withdrawal of US$83 million and highlighting the importance of fiscal prudence in managing petroleum revenues.

Despite market uncertainty, the PHF’s investment strategy yielded US$18.1 million in investment income in 2023, aligning with mandated guidelines for fund growth. This demonstrates Ghana’s commitment to maximizing returns on its petroleum assets while safeguarding the long-term interests of its citizens.

While Ghana’s petroleum sector went through a challenging yet promising year in 2023, it was characterized by fluctuating oil prices and evolving market dynamics. Despite the hurdles, the country’s prudent management of petroleum revenues through funds like the PHF, GHF, and GSF underlines its commitment to sustainable development and economic resilience in the face of adversity.As Ghana continues on its path of growth and diversification, the prudent stewardship of its petroleum resources will remain paramount in driving inclusive prosperity for all its citizens.