Ghana’s Petroleum Funds recorded a net realized income of US$25.29 million in the second half of 2024, marking an increase from US$18.12 million in H2 2023, according to the Bank of Ghana’s (BoG) Petroleum Funds report. The Ghana Stabilization Fund (GSF) contributed US$5.02 million, up from US$2.78 million in the previous year, while the Ghana Heritage Fund (GHF) generated US$20.27 million, an improvement from US$15.33 million. At the end of H2 2024, total reserves in the Ghana Petroleum Funds stood at US$1,455.78 million, with GHF holding US$1,258.86 million and GSF maintaining US$196.92 million.
Ghana’s Petroleum Revenue Management Act (2015), Act 893 as amended established the GSF and GHF collectively referred to as the Ghana Petroleum Funds (GPFs).
The purpose of the GSF is to cushion the impact on or sustain public expenditure capacity during periods of unanticipated petroleum revenue shortfalls. The GHF is to support development for future generations when the petroleum reserves have been depleted.
Despite the positive performance of the petroleum funds, Ghana’s overall petroleum sector suffered a sharp 62.63% decline in revenue in H2 2024, falling from US$840.77 million to US$517 million. This slump raises concerns about oil production sustainability and the country’s ability to maintain long-term energy revenues.
The Public Interest and Accountability Committee (PIAC) revealed in its latest report that Ghana’s crude oil production had been declining since 2019. Production dropped from a high of 71.44 million barrels in 2019 to 48.25 million barrels in 2023, representing an annual average decline of 9.2 per cent.
The Committee had in its recommendations called on government and relevant regulatory bodies to take appropriate steps to reverse the production decline in existing fields while wooing investments into unexploited fields.
In spite of the decline in H2 of 2024, total annual petroleum earnings reached US$1.3 trillion, marking Ghana’s highest oil revenue since production began in 2011. Key revenue sources included US$369 million from five crude oil liftings between July and October from the Jubilee, TEN, and Sankofa Gye Nyame (SGN) fields, US$144 million in corporate taxes paid by oil sector companies, US$74,000 in Surface Rental fees from Planet One Oil and Gas Limited, and US$3.67 million in accrued interest from the Petroleum Holding Fund.
Of the US$454 million allocated to the Ghana Petroleum Funds, US$136.2 million was transferred to the Ghana Heritage Fund, designed to preserve wealth for future generations, while US$317.8 million was channeled into the Ghana Stabilization Fund, which helps mitigate oil price shocks and economic fluctuations.
While Ghana recorded strong revenue figures in early 2024, oil production continues to trend downward, raising long-term concerns about sustainability. With global oil prices fluctuating and Ghana’s reserves maturing, the government faces a critical decision: will it implement bold policies to secure future petroleum revenues, or will the country risk a gradual decline in oil earnings?
Investors and industry players will be closely watching policy shifts, exploration projects, and fiscal incentives to determine whether Ghana’s oil sector can maintain its momentum or enter a period of decline.
