Skip to main content

Crude oil export to ease Ghana’s worsening trade deficit

By Toma IMIRHE
Senior officials in the Government of Ghana are now looking up to lifting of crude oil from the Jubilee oilfield by the Ghana National Petroleum Corporation scheduled for the second week of March, to ease the rising pressure on Ghana’s balance of payments position. It is anticipated that the first lift by GNPC proposed to take place on March 12 or 13 will give Ghana crude oil sales revenues which can compensate in part for the country’s rising oil import bill.

The price of benchmark Brent light crude oil has, in recent weeks, risen to nearly US$100 a barrel, significantly increasing Ghana’s oil import bill and stemming the improvements in Ghana’s foreign reserves position achieved over the past 18 months.
By October 2010, Ghana’s gross international reserves stood at US$3,973 million, up from US$2,036.2 million about two years earlier. However while the country’s balance of payments registered a surplus of US$101.66 million during the first three quarters of 2010, because of capital account inflows, the balance of trade for the nine month period recorded a deficit of US$2,173.18 million (18.9% of Gross Domestic Product) as against a deficit of US$1,763.35 million (15.4% of GDP) in the corresponding period of 2009. The growth in the trade deficit was primarily due to a 59.9% surge in the oil import bill, which compared with just 29.6% growth in non-oil imports.

Officials in both the finance and the trade industry, ministries are now hoping that commencement of GNPC’s Jubilee oil lift will ameliorate the situation. GNPC will be the fourth partner to lift after lead operator Tullow Oil and two other partners. According to the schedule agreed amongst the partners, the lifting will be done according to the partner’s equity interest in the oilfield. It is planned that GNPC’s second lifting will take place possibly on May 30 or 31 this year, although lifting dates could change depending on production, stocks and terminal operations.

Government has projected revenues from oil of Gh¢584 million this year (about US$390 million). Although this only amounts to 6% of the total anticipated public revenues for 2010, it would be enough to plug the increase in the merchandise trade deficit for the 12 months up to September 2010 thus allowing favourable developments in Ghana’s capital accocunt to ease pressure on the overall balance of payments.

GNPC is currently evaluating proposals from world class oil traders and consumers as well as leading Ghanaian bulk distributors of refined petroleum products in order to select a suitable partner to obtain the best price for its crude. The corporation expects to sell it at a price slightly higher than Brent crude which as of the end of last week was selling at US$99.42.

However, industry analysts expect GNPC to begin selling its crude directly to Tema Oil Refinery as existing crude oil import contracts with neighbouring Nigeria expire. When phase one of the Jubilee oilfield development reaches its targeted output of 120,000 barrels per day (bpd) expectedly by the middle of this year, GNPC’s 13.75% equity stake will give it over 17,000 bpd, enough to meet a third of current domestic consumption.

This may prove crucial over the coming months; at the end of last week, uncertainty over government’s considerations with regards to whether or not to issue new debt sent foreign exchange traders scurring with the result that the cedi fell to a new all-time low of 1.5575 against the US dollar, the first major depreciation against that currency since mid 2009.

Comments

Popular posts from this blog

MTN Ghana & MTN MoMo CEOs win laurels at Ghana CEO Awards

  The Chief Executive Officer of MTN Ghana, Selorm Adadevoh ,   has been adjudged  CEO of the Year  –  Telecom  at the  2 nd  edition of the  Ghana CEO  Vision  and  Awards   held  in Accra. At the same event, the CEO of Mobile Money Limited (MTN MoMo), Shaibu Haruna was also adjudged CEO of the Year – FinTech Service Provider. Selorm  Adadevoh’s award  is in recognition  of  his   achievements   in the areas of   sustainability, leadership excellence, innovation and others  in the telecoms space  which  has contributed to  job creation to support the  growth of Ghana’s economy. Patrick Afari (r), General Manager, Supply Chain Management and General Services receiving CEO of the Year – Telecom Award on behalf of Selorm Adadevoh Receiving the award on behalf of Selorm, Patrick Afari, General Manager, Supply Chain Management and General Services ,  expressed appreciation to the organizers for the award. He  noted that  th e  award will go a long way to inspire MTN to do more for Ghanaian

EB-ACCION DISBURSES US$15 MILLION

By Fred SARPONG Ecobank-Accion (EB-Accion), a partnership between Ecobank Ghana Limited and Accion International has disbursed amount to the tune of $15 million to over 36,000 borrowers in Micro, Small and Medium Enterprises (MSMEs) sector in the country, since the institution was set up barely six months ago. Frances Adu-Mantey, the Managing Director of EB-Accion disclosed this to Business Week in Accra last week during the official opening of Accion Hub headquarters in Africa. The institution’s current portfolio stands at GH¢4 million. She stated that currently, EB-Accion have over 6100 customers who save with them throughout the four branches of the institution. According to her, in order to improve the services of the institution, Ecobank Share Services center will facilitate the technology aspect of the bank by networking all the branches of EB-Accion. Maria Otero, President and Chief Executive Officer of Accion International said that the center’s staff in Accra will provide supp

Amantin & Kasei Community Bank posts impressive growth, with over GH¢1m profit

 Amantin and Kasei Community Bank, at Amantin in the Bono East Region has posted impressive growth in all the performance indicators during 2022 financial year under review. The bank recorded profit after tax of GH¢1,055,662, representing 35.66% more over the 2021 figure of GH¢778.151. This achievement stemmed out of 49.24% gross income growth from GH¢8,143,526 to GH¢12,153,537. Total deposits of the bank went up by 36.20%, changing from GH¢50,959,848 in 2021 to GH¢69,405,591 in 2022. The bank increased loans and advances by 22.15% from GH¢14,128,017 to GH¢17,257,614. Total assets showed an appreciation of 29.32%, amounting to GH¢77,918,288 as against GH¢60,250,693 in the previous year. On the other hand, the bank posted a marginal increase in short term investments portfolio from GH¢24,439,761 to GH¢26,585,698, indicating 8.78% change. The Chairman of Board of Directors, Amantin and Kasei Community Bank, Dr. John Oduro-Boateng, disclosed this during the 18th annual general meeting of