Ghana may not realize its Petroleum Benchmark Revenue projected for the year 2015 due to continuous decline in world oil prices, with the outcome, expected to impact negatively on the execution of its 2015 Budget.
The West African country had in its mid-year review presented to Parliament in March slashed its 2015 oil revenue forecast to GH₵1.5billion ($417million) from GH₵4.2million when the budget was presented in November as result of lower crude prices.
This represented 64% drop in its earlier projects.
Although the country’s oil production forecast for 2015 remained unchanged at 102,033 barrels per day, the projected oil revenues through corporate taxes, royalties and the government’s carried interest receipts will largely be affected as firms are hit by the decline in oil prices.
The former British colony had initially based its projections of a barrel of oil at US$99.38 per day but the commodity as at Thursday August 27, was selling at US$45.70 per barrel.
Ghana may not be a major oil-producing country, petroleum revenue had been a key contributor to its Gross Domestic Product (GDP) and a major source of revenue since oil production began in 2010.
It therefore remains to be seen where the country could raise money to shore up the deficit.
“The Ministry of Finance is taking necessary steps to control spending to ensure that the continuous fall in the crude oil prices does not derail the achievement of our fiscal deficit target for the year as well as our medium term fiscal consolidation objectives. In this regard, MDAs that are funded from the Annual Budget Funding Amount (ABFA) are to control their expenditure within the Budget allotments provided by the Ministry of Finance,” Finance Minister, Seth Terkper told journalists at a press conference Thursday.
The government, he said, will not pursue any option of increasing taxes domestically to address the shortfall but rather issue Eurobonds on the market. Credit: Kasapafmonline.com