Ghana likely to miss $1.4bn oil revenue target for 2023 – ACEP warns
In a recent media interaction on Ghana’s 17th IMF programme hosted by the Economic Governance Platform (EGP), Ben Boakye, the esteemed Executive Director of the Africa Centre for Energy Policy (ACEP), delivered a sobering assessment of the nation’s energy sector and its profound implications for the government’s fiscal outlook.
Revenue Projections Cast Doubt
The Government had set its sights on reaping $1.4 billion in revenue from oil exports this year. However, Mr Boakye’s remarks raised concerns over this ambitious target as the current oil price per barrel languishes at a mere $74, falling far short of the initial projection of $88. With oil revenue for the first half of 2023 amounting to a modest $500 million, the feasibility of achieving the projected revenue by year-end has come under scrutiny.
Energy Sector Expenditure on a High Note
Mr Boakye shed light on the government’s substantial annual spending in the energy sector over the past four years, indicating a whopping outlay of $1.2 billion. This staggering amount was earmarked to address shortfalls in the energy domain, drawing attention to underlying inefficiencies that warrant urgent attention.
Impending Under-Recoveries Pose Fiscal Strain
While the current expenditure on energy raises concern, the potential for further fiscal strain becomes evident if inefficiencies persist. Boakye ominously projected that the government could bear the weight of GHS 23 billion this year alone to cover under-recoveries.
A dire trajectory looms large, with the figure estimated to skyrocket to GHS 97 billion by 2026, surpassing planned capital expenditure twofold.
Call to Action
The gravity of Boakye’s warnings underscores the pressing need for the Ghanaian government to address the underlying challenges in the energy sector with utmost urgency. Swift and comprehensive measures are imperative to mitigate potential fiscal burdens and secure revenue projections.
As the country embarks on its 17th IMF programme, stakeholders, investors, and policymakers must rally together to confront the root causes of inefficiencies in the energy sector. By taking decisive action now, Ghana can fortify its financial stability and pave the way for sustainable economic growth in the years to come.
