Imagine a nation sustained by the discovery of black gold, only to watch its fortunes dwindle like oil seeping through cracked reservoirs.
In the second half of 2025, Ghana’s petroleum revenues fell to $399.65 million, marking a continuation of a troubling downward trajectory in the country’s oil sector.
This figure, reported by the Bank of Ghana, reflects revenues from crude oil liftings, corporate income taxes, and surface rentals, with distributions channelled to key funds like the Annual Budget Funding Amount (ABFA) and the Ghana National Petroleum Corporation (GNPC). While this specific half-year data is recent, the broader decline is far from novel – it has been evident since production peaked in 2019. Ghana’s oil output has steadily eroded, dropping from 71.4 million barrels in 2019 to just 48.2 million barrels in 2024, with further deterioration in 2025.
This persistent issue threatens fiscal stability, foreign exchange reserves, and economic growth in a nation where petroleum once promised a pathway out of resource dependency. The roots of this decline lie in a mix of structural, operational, and external factors, but solutions exist through targeted reforms and diversification. This article delves into the data-driven evidence of the slump, analyses its multifaceted causes, and proposes actionable strategies to reverse the trend, drawing on insights from reports by the Public Interest and Accountability Committee (PIAC), the Ministry of Finance, and other stakeholders.
HISTORICAL CONTEXT: A PATTERN OF DECLINE
Ghana’s petroleum sector, which began commercial production in 2010 with the Jubilee Field, initially fueled optimism for economic transformation. Revenues climbed steadily, reaching $1.06 billion in 2023 and surging 27.8% to $1.35 billion in 2024, driven by favourable global prices and corporate tax windfalls.
However, this uptick masked underlying vulnerabilities. By 2024, production had already fallen for the fifth consecutive year, defying the revenue boost from higher prices.
In 2025, the decline accelerated. The first half generated $370.6 million, a 56% drop from the $840.8 million in the same period of 2024.
Combined with the second half’s $399.65 million, full-year revenues for 2025 are estimated at around $770 million, a stark 43% plunge from 2024’s high. Crude output tells a similar story: from 24.9 million barrels in H1 2024 to 18.4 million in H1 2025, a 25.9% reduction, hitting the lowest half-year level since 2016.
Gas production also dipped 6.7% to 130,466 million standard cubic feet in the same period. Historically, petroleum has contributed about 7% to government revenues on average, but its share of GDP has fluctuated wildly from a peak of 5.08% in some years to negligible levels pre-2010. The Ghana Petroleum Funds, managed by the Bank of Ghana, have accumulated over time, with 30% of revenues allocated to the Ghana Stabilisation Fund and Ghana Heritage Fund for buffering volatility and intergenerational equity. Yet, breaches in capping formulas for these funds, as noted in PIAC reports, have raised accountability concerns, exacerbating the impact of revenue shortfalls. This pattern underscores that the 2025 decline is not an isolated event but part of a decade-long erosion, intensified by global and domestic pressures.
ROOT CAUSES: A CONVERGENCE OF CHALLENGES
The slump in Ghana’s petroleum revenues stems from a confluence of production declines, market dynamics, and policy shortcomings. At the core is the ageing of key fields – Jubilee, TEN, and Sankofa-Gye Nyame, which account for the bulk of output. Natural reservoir depletion has led to operational setbacks, including scheduled shutdowns, reducing yields by up to 32% since 2019.
PIAC’s 2025 semi-annual report highlights that no new petroleum agreements have been signed since 2018, starving the sector of fresh investment and exploration.
This investment drought is evident in Deloitte’s projections, which estimate only $3.5 billion in upstream spending through 2035, far below what’s needed to sustain production.
External factors compound the issue. Global oil prices averaged $74.93 per barrel in H1 2025, down from $86.12 the previous year, directly slashing revenue per barrel.
Volatility in prices, unhedged under the Petroleum Revenue Management Act (PRMA), exposes Ghana to shocks, as seen in past deficits during low-price cycles.
Domestically, regulatory and policy hurdles deter investors. Energy Minister John Jinapor has pointed to inefficiencies, protracted licensing processes (e.g., the failed 2018 Licensing Rounds), ambiguous policies, and burdensome taxes as key deterrents.
Legal disputes over field unitization and frequent fiscal changes have created uncertainty, making Ghana less competitive regionally. High operating costs, limited financing for local operators, and poor infrastructure further hinder growth.
GNPC’s own finances reflect this: receipts fell 42.91% to $65.26 million in H1 2025, with expenditures down 62.42%.
These causes are interlinked. Declining production reduces revenues, which limits reinvestment, perpetuating the cycle. Without intervention, experts warn of structural risks to energy security and fiscal health.
PATHWAYS TO RESOLUTION: STRATEGIC REFORMS AND DIVERSIFICATION
Addressing this entrenched decline requires a holistic approach, blending immediate fixes with long-term resilience. There is a need for an urgent, multi-pronged strategy emphasising economic diversification to reduce oil dependency, which currently drives GDP and foreign earnings despite its modest revenue share.
This includes promoting renewable energy – Ghana’s solar and wind potential could offset gas declines and developing local industries like agriculture and manufacturing to buffer against price volatility.
Regulatory reforms are also paramount. The government has signaled intent to enforce work obligations on licensees, review petroleum laws for clarity, and introduce fiscal incentives to attract investment. Boosting local content under the Petroleum (Local Content and Local Participation) Regulations could equip Ghanaians with skills, creating jobs and in-country value. Initiatives like the Western Corridor Tract Project 2 (WCTP2) offer near-term production boosts, potentially stabilising revenues by 2028-2032. The Voltaian Basin, though not viable before 2033, represents longer-term potential if exploration ramps up.
Gas development is another lever: aligning utilisation with revenue management under the amended PRMA could enhance domestic energy supply and exports.
Hedging against price shocks via PRMA amendments would stabilise funds, while stricter accountability, such as enforcing GSF caps, ensures prudent spending.
Deloitte forecasts $16 billion in cumulative revenues by 2035 if barriers are addressed, underscoring the upside. International best practices, like the UAE’s revenue diversification into non-oil sectors, provide models: investing petroleum funds in sovereign wealth strategies for intergenerational equity and sectoral shifts.
Ghana could earmark more ABFA for infrastructure, as per recent PRMA changes, to spur growth beyond oil. Implementation demands stakeholder collaboration – government, PIAC, civil society, and investors to restore confidence. Reversing the decline could yield $1.35 billion annually again, supporting the cedi and public finances.
CONCLUSION
Ghana’s petroleum revenue declined to $399.65 million in H2 2025, which is symptomatic of a deeper, ongoing crisis rooted in ageing infrastructure, investment shortfalls, and policy gaps. Yet, with data from PIAC and others, recovery is achievable through diversification, reforms, and innovation. By acting decisively, Ghana can transform its oil sector from vulnerability into a sustainable asset, securing prosperity for generations.
The writer, Samuel Ackom, is a Broadcast Journalist with Channel One TV and Citi FM
