Jubilee field, gold price hike and higher tax rates cause revenues to quadruple.
Ghana received over four times more from its natural resources in 2011 compared with the previous year. This remarkable increase, revealed in Ghana’s 2011 EITI Report that was launched last week, is a consequence of two developments: production started at the new Jubilee oil field and higher tax revenue from Ghana's mining sector.
Clare Short, EITI Chair said: "With high expectations about these revenues, transparency is more important than ever."
Price hikes and higher tax rates cause mining revenues to double
While revenues from oil and gas production boosted the country’s economy, revenues from the mining sector also increased significantly.
The Ghanaian government’s revenues from mining more than doubled between 2010 and 2011, from US$ 210 million to US$ 500 million.
The increase was partly a consequence of higher mineral prices, in particular gold, and of the end of an initial investment recovery period.
There was a 75% increase in the corporate taxes paid by companies. In addition, Ghana increased the royalty tax rate on its mining sector.
At a regional EITI Conference last year, Ghana's Minister of Finance was quoted on saying that “EITI recommendations have informed a wide-range of policy reforms in the mining sector, including the review of mineral royalty payments from a range of three to six per cent to a fixed rate of five per cent and an on-going upward review of ground rent as well as increase in the corporate tax rate from 25 per cent to 35 per cent”.
Revenues from resources almost US$ 1 billion
Government revenues from natural resources were US $940 million, of which revenues from oil and gas were US$ 440 million and mining $500 million.
Ghana 2011 EITI report also reconciles revenues from payments that were made 'in-kind', that is in physical quantities of oil/gas. These in-kind payments amounted to 2 million barrels, which were sold for US $234 million.
Discrepancies between the payments reported by the government and the companies were in the order of 5%. Discrepancies were mostly found between figures within the mining sector.
For further information about EITI in Ghana, please visit www.eiti.org/ghana
UPDATE 18 MARCH: Replaced quote from Bill Gates with quote from Ghana's Mininster of Finance.