2018 Budget: Economists warn against ambitious oil revenue projection

As the Finance Minister Ken Ofori Atta prepares to present the 2018 budget statement before parliament tomorrow, some financial observers have caution against ambitious oil revenue projection.

According to them, previous experiences must serve as a guide to government as Ghana has no control over the price of oil.

In the 2017 mid-year budget review presented by the Finance Minister in July this year, Total Revenue and Grants for the period amounted to GH¢17.5 billion against a target of GH¢20.5 billion.

Total tax revenue including upstream petroleum receipts was GH¢13.7 billion, against a target of GH¢15.7 billion.

By this, Total Revenue and Grants was revised downwards by 0.9 percent of GDP from GH¢44.5 billion to GH¢43.1 billion.

This, economist and Senior Lecturer at University of Ghana Dr. Eric Osei-Assibey cautions should guide the Finance Minister in making projections from oil revenue.

“What government should be cautious about is not to depend so much on these oil prices because of the  volatility nature of it. It is very volatile. Today it is 62 dollars per barrel, the next day, it could come to 40 dollars per barrel,” he warned.

Even though the petroleum receipts in the first half of 2017 amounted to 277 million dollars, compared to the end-year projection of 515 million dollars.

Economist, with the Institute of Certified Economists of Ghana, Gideon Amissah agrees government must be measured when making projections on oil revenue.