Empirical Analysis of Petroleum Revenue Management in Ghana: 2011 - 2020

Abstract

Ghana established the Petroleum Revenue Management Act (PRMA), 2011 (Act 815) as amended as 893 in 2011 after learning from the mistakes made by other resource-rich nations to encourage transparency and accountability in the collection, distribution and management of petroleum revenues in a sustainable manner for the benefit of Ghanaians. After a decade of commercial oil production and the establishment of the PRMA, this study evaluated petroleum revenue management in Ghana thus far by adopting a mixed methodology in collecting and analysing data. A Semi-structured interview guide was employed in the collection of primary data and analysed using thematic analysis. Secondary data were collected and analysed using descriptive statistics and regression analyses. The analysis revealed that between 2011 – 2020, Ghana has received about US$6.55billion and allocated $6.52billion. Again, the Carried and Participating Interest (CAPI) and Royalties have been the two major sources contributing to about 58% and 25% of petroleum revenues respectively. Also, the impact of price variations on petroleum revenues was found to be significant. Additionally, the analysis shows that during the period, petroleum revenue management in Ghana fairly met the expectations, however, there is room for improvement. Based on the findings from the study, it is recommended that the PRMA be reviewed to among others clearly define the priority areas and do away with ministerial discretions on capping the stabilisation fund. This will among others help improve transparency and accountability in the management and use of petroleum revenues in Ghana while ensuring long run sustainability of oil revenues.