Oil revenue decline must not affect Ghana’s development
The 2023 Annual Report of the Public Interest and Accountability Committee (PIAC) Report on the use and management of oil revenues launched in Accra yesterday states that Ghana’s share of petroleum revenues for 2023 declined by a 25.65 per cent due to decrease in oil production for the fourth conservative year and lower global prices.
The country earned $1.06 billion in 2023; $1.42 billion in 2022, which is the highest so far since the country started commercial oil production in 2010; $783.33 million in 2021; $666.39 million in 2020; and US$938 million in 2019; and US$813.95 million in 2018.
Compared to the initial revenues – US $444 million in 2011; US$541 million in 2012; and US$846 million in 2013 – one could see some consistency in growth but along the line some inconsistency set in.
For instance, even the 2013 figure of US$846 million beat those of subsequent years of 2018 (US$ 813.95 million); 2020 (US$666.39 million); and 2021 ($783.33 million).
The 2023 decline in oil revenue is due to decrease in oil production and lower global prices.
Are these the only problems for the decline in the country’s oil revenues?
What about the quantities of barrels that the country receive as its share of total production?
In his article titled ‘Is Ghana Getting Its ‘Fair Share’ of Oil Revenues after 10-Years of Production and Exports?’ published May 24, 2021, Theo Acheampong, one of those who follow the country’s oil production figures, states that Ghana had produced 453.89 million barrels of crude oil from three fields (namely, Jubilee, TEN and SGN) since 2010.
This was 11 years after the country had struck oil and out of the figure, a total of 452.09 million barrels (that is, 99.71 per cent) had been lifted or sold by all the partners.
What is of interest is that of the 452.09 million barrels lifted, Ghana’s share was 78.85 million barrels – this is 17.44 per cent., meaning that the country got less than 18 per cent the value of US$31.62 billion generated from all the lifting for 11 years.
We agree that all this happened due to the agreement(s) reached with the country’s partners in its oil extraction.
That is to say that once production figures go down or up, the country would get its corresponding share.
But the question is, should the agreement stay as it is for the country to receive paltry share?
We would not be surprised if the relevant public officials come out to defend the agreement as the best so far.
We have not forgotten the hullabaloo about the agreement on the lithium found in the Central Region and how such agreement was defended as one of the best in the world.
In the face of the declining oil revenues, our major concern is the need for the country to explore other viable sources of revenue to support its development.
When the country struck oil in 2010, many Ghanaians had the hopes that the fortunes of the country and its people were going to change for the better, but those hopes have become a far cry.
There is therefore the need for the country’s managers to do all they can to restore hope to the people, even if oil revenues fail to pick up.