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The offshore Jubilee field is Ghana’s largest source of oil (Image: Tullow Oil)

Ghana to benefit from higher oil prices

GHANA ACCRA is set to benefit from rising petroleum the figure of 66.91mn barrels reported for 2020.
prices, which reached three-year highs in late This decline in output may not persist. In
October and remained bullish in the first week their “Where to Invest in Africa 2021” report,
of November. published in September, analysts at Rand Mer-
Ghanaian experts believe the increase in chant Bank (RMB) said that they expected
crude oil prices will generate positive returns Ghana to step up both exploration and produc-
for the economy, as it has the potential to push tion over in the next few years. Higher crude
petroleum revenues up by almost 50% in the prices will encourage expanded activity in both
short to medium term. In turn, the extra reve- areas, they wrote.
nues would help the government avoid budget “This year, the [Ghanaian] economy has
shortfalls. shown a steady recovery, with the GDP print in
The expected increase stems from the [the second quarter] at 3.9%, supported by per-
fact that Ghana’s 2021 budget is based on the formance in both secondary and tertiary indus-
assumption that world market prices for crude tries,” the report stated. “Over the next few years,
oil will average $54.75 per barrel this year. At oil production output will pick up in the near
this price, the Ghanaian government stands term, supported by higher oil prices that should
to collect $885.7mn in oil revenues. Currently, encourage further oil exploration in Ghana,” the
though, world crude prices for benchmark analysts said.
crudes are above $80 per barrel, or more than Dr Said Boakye, an economist who serves
50% above the assumed average. as head of the Research Directorate at Ghana’s
If oil remains at this level, Accra stands to Institute for Fiscal Studies (IFS), took a more
earn more money and can then use budget cautious view, however. Explaining the impli-
funds to stimulate economic growth and pro- cations to graphic.com, Boakye stressed that
vide support to the national economy, espe- while rising crude oil prices were a good thing
cially the petroleum sector. But these projections for Ghana, the country’s ability to maximise its
should be viewed with caution, according to a gains were tied to production levels.
report from graphic.com. He also expressed dismay over the year-on-
Citing data from the Ghana Statistical Ser- year decline in crude output in the first half of
vice (GSS), the newspaper reported last week the year. “It is not good that production in 2021
that domestic oil production had actually is lower than that of 2020, which was a COVID-
dropped by almost 20% in the first six months 19 year,” he told graphic.com. “Now is the time
of the year, despite soaring world crude prices. for us to be recovering from the COVID-19 cri-
GSS figures show that Ghana extracted 27.76mn sis, and so you [would] expect production to be
barrels of oil in the first half of 2021, down from going up.”
34.23mn in the same period of 2020, it noted. Boakye also urged the Ghanaian government
Meanwhile, Accra is expecting the country to push oil producers to ramp up production.
to produce a total of 64.86mn barrels of crude Accra can only reap the full benefits of the rise
oil this year. This would mark a 3.1% drop from in global oil price if output goes up, he said. ™

P8 www. NEWSBASE .com Week 44 03•November•2021