Assessment of petroleum revenue management in Ghana, from 2011 to 2017

Abstract

Ghana commenced the commercial production of oil in 2010 with the subsequent passage of the Petroleum Revenue Management Act, 2011 (Act 815) and the Income Tax Law to govern the management of the petroleum revenues. In spite of Act 815 as amended, Act 893 in 2015, regarding sustainable revenue management; government’s expenditure from the Ghana Petroleum Fund on recurrent and non-capital items creates sources for concern. This study therefore, was set out to examine the various petroleum revenue sources in Ghana, their trends and proportions over a seven-year period (2011 2017). Secondary petroleum revenue data from the annual reports of the Ministry of Finance were subjected to descriptive statistics, frequencies, graphs, cross tabulations and content analysis. During the period under review, the operations of three oil fields such as the Jubilee, TEN and Saltpond fields had been identified. With respect to the provisions of Section 21(4), no further revenue allocations had been made into the Ghana Infrastructure Investment Fund after it received a total of US$6.92 million from the first TEN lifting in the first quarter of the 2017 budget. This, in addition to weakening the fundamentals of the economy has damning implications for other sectors of the economy as well. In other to encourage allocations into the GIIF, Section 21(4) can be amended to set a minimum cap of say 10% or 15% and also restrict the implementation of policies whose infrastructural needs have not been met by say 70 to 80 percent. This would boost public investment expenditure in the domestic market and increase development of other sectors in the economy, leading to direct or indirect income gains to supplement any marginal gains of Petroleum Holding Fund income (PHFI).