The Bank of Ghana has intimated that the total net income realised to petroleum funds in H2 2020 reduced to US$8.93 million to close the year from US$10.76 million same period in the year 2019.
This represents a decline of approximately 17 percent year-on-year, and is likely attributable to the global crises and economic hardships wrought by the coronavirus pandemic.
Out of the US$8.93 million petroleum proceeds at end of last year, the Bank of Ghana asserted that the Ghana Heritage Fund (GHF) contributed US$8.05 million, whereas Ghana Stabilisation Fund (GSF) brought in US$0.88 million.
Similarly, in 2019, the Ghana Heritage Fund contributed US$7.02 million to the Ghana Petroleum Fund as against US$3.73 million paid in by the Ghana Stabilisation Fund.
“GHF and GSF total return for 2020 was 4.66% and 0.35% respectively,” the Bank of Ghana added.
Highlighting the accumulated reserves on both funds, the Bank of Ghana disclosed that the reserves accrued to the Ghana Stabilisation Fund was US$199.99 million and the Ghana Heritage funds was US$644.79 million respectively.
According to the Central Bank, total petroleum revenue distributed was US$316.07 million, out of which Ghana National Petroleum Corporation (GNPC) received US$118.24 million, and US$103.87 million allocation was made to the Annual Budget Funding Amount (ABFA).
Also, the Ghana Stabilisation Fund and the Ghana Heritage Fund received an allocation of US$65.77 million and US$28.19 million respectively during the period under review.
Giving some insights into the Petroleum Holding Fund Account (PHF), the Bank of Ghana mentions that at the end of 2020, the Fund held a balance of US$40.61 million which “comprised surface rental proceeds of US$0.23 million, corporate tax of US$40.18 million and a mandatory balance of US$0.20 million”.
Concerning the outlook for 2021, the Bank of Ghana posits that incoming data in recent months continues to signal a rebound of the global economy albeit at a slower pace.
In addition, although crude oil prices recovered due to supply restrictions by the Organization of the Petroleum Exporting Countries (OPEC) and positive vaccine news, prices continue to be capped by the pandemic’s effects on economic activity, the Bank of Ghana remarked.
“Crude oil price is projected to average US$53.88 per barrel in 2021 echoing near-term demand concerns”.
The Bank of Ghana further said that the recent sharp resurgence in the pandemic suggests a likely weakening of economic activities temporarily during 2021 Q1 with a strengthening projection in the second half of the year.
“Global economic activity is projected to rebound to 5.50% growth in 2021 and 4.20% in 2022. Although there is extreme uncertainty regarding global growth.
“Global inflation is expected to edge up and global financing conditions likely to be tighter for emerging markets and frontier economies in the near-term as investors in their quest for safe haven investments, drive increased capital-flow reversals and slow activity further”.
Finally, the Central Bank holds that in the coming months, Policymakers main focus will continue to be on the evolution of COVID-19 situation as it relates to infections, fatalities and associated medical interventions.
“If the situation deteriorates, it may create a flight to quality with safe haven bond yields falling and impacting positively on the marked-to-market valuations of the portfolios of the Ghana Petroleum Funds in the near term”.
