Oil Price Decline Puts Govt’s $1 Billion Revenue Target at Risk as Global Prices Slide Below $74 Benchmark
The sharp decline in crude oil prices on the international market may offer short-term relief at fuel pumps, but it presents a serious threat to Ghana’s 2025 fiscal outlook, with the country’s oil revenue projections now hanging in the balance.
In the 2025 National Budget, government pegged its oil revenue expectations at over $1 billion, based on a benchmark crude price of $74 per barrel. However, market conditions have since shifted, with oil prices plummeting to between $61 and $65 per barrel over the last two weeks.
The slump, driven by declining global demand and growing fears of a worldwide recession is projected to deepen – a development that could undermine Ghana’s revenue targets and exacerbate existing fiscal pressures.
A recent report by Fitch Solutions warns that oil-exporting countries in Sub-Saharan Africa are likely to face significant fiscal headwinds if crude prices fail to rebound in the coming quarters. Brent crude, the global oil benchmark, has already lost 14.9% of its value since April 2, 2025, amid renewed concerns over global growth and OPEC+’s accelerated plan to reintroduce previously curtailed supply to the market.
Compounding the situation is a looming decline in non-traditional export revenues, following recent tariff hikes by the United States — a double blow to Ghana’s external earnings.
Yet, there may be a silver lining. The drop in global crude prices is expected to result in reduced domestic fuel prices, potentially easing inflationary pressures and stabilising the cedi. Some analysts suggest this could provide limited relief to consumers and businesses amid broader economic challenges.
Economic observers maintain that while short-term gains at the pumps are welcome, the broader implications of shrinking oil revenues could prove more consequential for Ghana’s fiscal health if global market conditions do not improve.
