Ghana to lose $700m in oil revenue due to fall in world price

Business News of Thursday, 22 January 2015

Source: Graphic Online

Crude Oil

It is estimated that Ghana will lose $700 million in oil revenue this year as a result of the falling price of crude on the world market. Averagely, the country made $1.2 billion annually from crude oil production, but the President, Mr John Dramani Mahama, says the latest developments on the world market have brought the expected revenue down to $500 million.

Addressing Ghanaians living in Germany at the Intercontinental Hotel in Berlin last Tuesday to round off his state visit to that country, he said the unpredictability of the world economy and how it affected nations meant Ghana could not put much hope in crude oil for survival. Economy

Taking his audience through factors that contributed to the economic challenges facing the country currently, the President said: “The economic challenges we are facing came out of the 2010/2011 era when revenue from our primary produce — cocoa and gold — dropped.”

“The Single Spine Pay Policy, which increased the wage bill from GH¢3 billion to GH¢8 billion, was a major contributor to the problem,” he added.

Cocoa, he said, had started recovering, but not gold.

He explained that until the country significantly changed the structure of the economy from being the producer of raw materials to the manufacturer of finished products, not much could be done to turn the economic fortunes around.

“It was to give the nation some respite that the government decided to seek a programme with the International Monetary Fund (IMF),” he said, and expressed the hope that Ghana would sign up to the programme in the next few weeks.

He assured them that even before the IMF programme took off, the home-grown economic measures introduced by the government had brought some stability into the economy.

President Mahama asked Ghanaians to stop the blame game and join hands with the government to move the nation forward.

He said since he became President, he had decided not to put the blame on anyone for some of the difficulties confronting the nation but rather concentrate on finding solutions to the problems.

He said every head of state since independence had done his part in charting a path of progress for the nation.

“If I am able to move this country faster, it is because of what Rawlings, Kufuor and Mills handed over to me,” he said.

President Mahama stated that he had been nicknamed Mr ‘Dumsor’ in Ghana because of the current load shedding.

He explained the circumstances that led to the rather terrible situation to include the drop in gas flow from Nigeria and the fact that the demand for power had outstripped generation.

In all that, he said he had accepted responsibility for the current situation, but was quick to add that he was working hard to turn things round.

He expressed optimism that with the efforts put in by the government, a brighter future awaited the country in the power sector.

In spite of the challenges, President Mahama said growth recorded in many other sectors was evident.

He mentioned the water and agricultural sectors as two of the few areas where tremendous work had been done.

“For all the criticisms of my government, I am not accused of increase in the prices of the major staples. So agriculture is doing very well. Prices of local food items are stable,” he said.

He urged Ghanaians to be optimistic of their country, instead of being pessimists.

“We have two different groups of people, optimists and pessimists. Nations grow when you have a lot of optimists. Don’t believe our country is the worst in the world,” he said.

Mr Mahama urged Ghanaians in the Diaspora to be wary of some of the things people posted on the Internet about the government.

“Some post messages that mean the government is wicked,” he said.

He credited all patriotic Ghanaians, both dead and living, for the progress the country had made over the years.

“Ghana is moving forward and we must count our blessing. If we do that, we can build on it,” the President said.

In that context, he asked Ghanaians to “have the enthusiasm the German has” and stop the petty politics and ethnic divisions.

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