John Peter Amewu
John Peter Amewu, Senior Analyst for Africa Centre for Energy Policy (ACEP), has advised government to consider investing in the country?s real estate sector.
He indicated that investing Ghana?s oil revenue into the real estate sector, among other viable ones, would yield higher returns.
?In Ghana, most of our investments have gone into the Euro Clear bonds and the US Treasury. From a look of the market, these areas are equally important areas for investment, but we can change our investment strategy to look into real estate since we have not made any attempt in that area.?
Last year, Ghana made a return of 0.02 percent on its investments, but according to Mr Amewu, the oil revenue could have been invested in areas that could have yielded better returns.
He stated that oil revenue investments should be based on guidelines in the Petroleum Management Law, stressing that in certain countries, the governments invest in particular instruments which earn the hearty returns.
?Though the find and strategy allows us to go into some framework, government should consider investing into riskier instruments but with higher returns,? even though he asserted that caution should be exercised in the pursuit of such decisions.
Ghana expects US$581 million in petroleum revenues this year based on a seven-year moving average as mandated by the country?s Petroleum Revenue Management Act (PRMA).
The calculation has pegged the estimated average crude oil price at US$94.36 per barrel, while the estimated production of oil is also projected to be 83,341 barrels of oil per day (bopd) based on a three-year moving average.
Currently, the Jubilee field produces about 115,000 bopd as additional work on the oil wells started yielding positive results in the last quarter of 2012.
Ghana earns five percent of royalties, a carried interest of 10 percent, an additional or paying interest of 3.75 percent and, petroleum income tax of 35 percent while an additional oil entitlement and also comes to the government, with the law allowing the International Oil Companies (IOCs) full cost recovery.
The expected revenue would be spent on four key areas: Expenditure and Amortization of Loans for Oil and Gas Infrastructure; Roads and Other Infrastructure; Agricultural Modernization; and Capacity Building (including Oil and Gas).
These funds by the PRMA are divided into four different accounts of Annual Budget Financing Accounts (ABFA), Ghana Petroleum Funds (GPF) Ghana Stabilization Fund (GSF) and the Ghana Heritage Fund (GHF).
The ABFA is spent in the annual budget; the GPF is made available to the Ghana National Petroleum Corporation (GNPC) for its exploratory activities, while the heritage fund is a savings for the future.
The Stabilization fund is used to balance the budget in years of low oil yield.
A business desk report