-While Nigeria, Botswana Earn Average 58%
The economic think-tank, Institue of Fiscal Studies (IFS) has revealed that Ghana has shortchanged itself in its crude oil contracts by earning a paltry 17% of revenues from sales, while Nigeria and Botswana earn an average of 58%.
The IFS is therefore calling for a thorough renegotiation of all upstream crude oil contracts to give the country value for money like other oil producers.
“…We have to try and renegotiate your oil deals if they’re not going to cost us too much,” said Research Fellow at the IFS Dr. Adu Owusu Sarkodie during a forum on Ghana’s domestic revenue mobilization on Tuesday.
“If we cannot renegotiate, then we have to forget about it and look into the new discoveries. We are not part of the production process in our extractive sector. We are only taking royalties,” Dr. Sarkodie charged.
The Department of Economics lecturer at the University of Ghana indicated that “in Nigeria, they produce 54.6 billion worth of extractive resources, only 0.3% came from minerals, 99.7 came from oil. So, Nigeria does not produce so much minerals.”
He compared the sorry state of Ghana in terms of benefits from its extractive industry.
“Comparing Ghana’s revenue from oil with Nigeria, this is the value of production, 2.2 billion in 2015 increasing to 4.8 billion in 2018. The revenue government of Ghana earned, from 400 million drops, and increase to 986 million. On average, while Ghana produced 2.95 billion, Ghana earned 548 million on average representing only 17.9%,” he said.
A similar pattern is seen in the mining sector, where between 2015 and 2018, the turnover for Ghana’s extractive minerals was about 5.68 billion dollars every year, the country earned a paltry US$ 263 million annually. Meanwhile, Botswana’s mineral production which had an average turnover of some 3.6 billion annually, the country made revenues of some US$ 1.8 billion.
“The mineral you produce, the government of Ghana receives only 6.5% as revenue,” Sarkodie lamented.