A resource governance expert is warning that Ghana squandered its strongest recent opportunity to rebuild fiscal buffers against oil revenue shocks, citing the 2024 fiscal year as a period when petroleum earnings exceeded US$1 billion yet withdrawals were still made from the Ghana Stabilisation Fund (GSF) rather than building it up.
The expert, speaking on condition of anonymity, said the pattern reflects a deeper failure of fiscal discipline that now leaves Ghana exposed precisely when protections are needed most.
“That shows what disciplined savings can achieve. The question is why that same discipline was not applied to the GSF, particularly during periods of high revenue,” the expert said, comparing the GSF’s chronic undercapitalisation with the Ghana Heritage Fund (GHF), which has grown steadily through consistent contributions and now generates more than US$40 million annually in interest income.
The Ghana Stabilisation Fund, created under the Petroleum Revenue Management Act to protect the national budget during periods of revenue shortfall, has hovered between US$100 million and US$150 million for years, far below the level required to absorb meaningful fiscal shocks. The Public Interest and Accountability Committee (PIAC) has separately flagged that the government has applied a cap on the fund inconsistent with the legal formula under Regulation 8 of Legislative Instrument (L.I.) 2381.
The expert argued that the GSF’s weakness is not a product of bad luck but of avoidable decisions.
“There are clear legal provisions governing how these funds should be managed. When those rules are not followed, it weakens the entire system,” the expert said, adding that mechanisms to absorb revenue shocks exist but have not been used effectively.
The warning comes against a backdrop of sharply deteriorating sector performance. Ghana’s crude oil production fell to 37.3 million barrels in 2025, down from a peak of 71.44 million barrels in 2019, representing a compounded annual average decline of approximately nine percent. Total petroleum receipts for 2025 dropped 43 percent to US$770 million, from US$1.36 billion the previous year.
On upstream investment, the expert cautioned against over-reliance on fiscal incentives as a quick fix, arguing instead that a stable, consistent policy environment is what ultimately drives capital decisions.
“What investors want is a stable policy environment, one that gives them confidence that their investments will not be undermined by changes in leadership or direction,” the expert said, pointing to unresolved contractual and tax disputes with sector players as sources of investor uncertainty.
Reacting to the PIAC findings, Theo Acheampong, a Technical Advisor at the Ministry of Finance, acknowledged that earlier revenue gains were driven largely by price effects rather than production growth, underlining the sector’s structural vulnerability to external commodity movements.
He maintained that the petroleum revenue distribution framework remains sound and that recent adjustments aim to concentrate resources on fewer but higher-impact infrastructure projects rather than spreading funds thinly.
The expert, however, insists that framework soundness means little without consistent enforcement.
“Production will decline over time and prices will fluctuate. These are inherent characteristics of the sector. The objective is to manage their impact effectively,” the expert said. “The framework exists. The challenge has been in its implementation.”
