Ghana’s President, John Dramani Mahama has said that the country will lose some $700 million oil revenue this year as a result of the falling price of crude on the world market. The Ghanaian President revealed this when he addressed the Ghanaian community in Germany about the state of Ghana’s economy. Mr. Mahama has been in Germany since Monday for a state visit. He explained that the country needs to move away from being a primary producer to manufacturing to be able to add value to its export to avoid suffering from events on the world market.
"The economic challenges we are facing came out of the 2011 era when revenue from our primary produce cocoa dropped, and we have been depending on oil revenue to help our budget, we need to build manufacturing economy to avoid these setbacks on the world market", he said. Crude oil on the world market has fallen to a record low of around $47 dollars and this is expected to affect the economies of the oil exporting countries especially those in the developing countries. Ghana makes an average of $1.2 billion annually from crude oil production but the fallen price of the commodity on the world market has brought the expected revenue down to $500 million.
Last year, Ghana’s economy was hardly hit. It currency depreciated against the major trading currencies which brought high rise in goods and services (inflation). This compelled the government to ask the International Monetary Fund for help. Ghana discovered its offshore oil and gas Jubilee Field in 2007 and started pumping oil in 2010. Since then, oil has been produced in commercial quantities, and over the next 20 years it is projected that Ghana could earn up to $20 billion in export revenue. It is expected that this will present an opportunity for the growth of the country’s economy. But the story has not been good since the discovering of the commodity. The country is currently facing electricity problems despite the abundant natural gas it could make use of from the oil sector.