Oil revenues rise, income from gold declines.
In December, Ghana published its 2012 and 2013 EITI reports for the oil, gas and mining sectors. The reports show the rising importance of the sectors to the economy, as their contributions to the state coffers grew by 35% since 2011. Of the total US $1.3 billion extractives revenue in 2013 (6% of total government revenue, according to IMF statistics), the oil and gas sector contributed roughly two thirds, and mining a third.
Corporate income tax boosts revenue in oil sector
Revenue from the oil and gas sector reached US $846 million in 2013. This is almost double the revenue of 2011, where revenues amounted to US $444 million (and US $541 million in 2012). .Almost all production, 99%, comes from one project, the Jubilee oil field.
The main reason for the stark increase in revenues can be attributed to first time payments of corporate income tax from oil companies since oil production began in 2010. This tax generated some US $217 million (25% of total) in 2013.
Increases in royalties, carried and participating interests, and surface rentals further accounted for a higher total revenue figure in the oil and gas sector.
Oil export exceeds production
More oil was exported than was actually produced in 2012 and 2013 by over half a million barrels. This is because Ghana began exporting existing stocks whilst the prices were high.
State-owned company urged to lay out investment plans
The Ghana National Petroleum Company (GNPC) represents the state interest in the sector and receives a share of the petroleum receipts from parliament for operations and investments in oil projects. Of the US $732 million allocated to GNPC between 2001 and 2013, 35% was spent on buying stakes in theJubilee oil field.
Now that there are fewer new investment opportunities at the Jubilee field, GNPC is starting to investmore in other oil fields. Despite this, the company has US $142 million left on its account, and the Ghana EITI report recommends that GNPC publishes an investment plan to explain the use of these funds to the public.
Discrepancy in corporate income tax payment
In comparing government revenue figures and company payments, the report found a US $ 55 million descrepency that needs resolving. The Ghana Revenue Authority states having received US$ 55m from Anadarko WCTP Ltd in corporate income tax payments in 2013 while,the company did not report making such payment.
Declining gold prices affect the mining sector
Mining revenue fell to US $424 million in 2013, down from a high of US $620 million in 2012. This drop was due in part to declining gold price, and depreciation of the Ghanaian Cedi. Gold accounts for nearly 90% of of all mineral output in the country.
Less profit in mining means less income tax
Between 2011 and 2013, corporate income tax accounted for the majority of the revenue, but fell by almost 50% in 2013 due to dimishing profits.
Progress in scrutinising revenue flows to the regional level
Ghana has improved the information on how the 10% of mineral royalties, intended for regional governments, are being used by the local governments, such as the district assemblies Obuasi and Tarkwa Nsuaem. Some district and municipal assemblies received amounts different from what they were entitled to. Although US $14 million was transferred to the Office of the Administrator of Stool Lands for district assemblies in 2013, no transfers were made to the affected communities, according to the report.
Note to editors: we encourage the republishing of our content. Please attribute this article with: "Ghana’s revenue from Jubilee Oil Field doubles from 2011 to 2013” was published on eiti.org on 26 January 2015.