Ghana is considering setting up a sovereign wealth fund to channel surplus revenues from oil production, which are due to start rolling later this year, Finance Minister Kwabena Duffuor has said.
“We have held a couple of meetings already it’s something we’ re seriously working towards and we hope to put the proposals before Cabinet in about a month,” Dr. Duffuor said in an interview with Reuters.
He said if Cabinet backs the proposals, a bill will then be drafted for consideration by parliament, Duffuor said.
The Finance Minister gave no details of the size of the possible fund. But a Ghanaian government source close to discussions on the matter said it will be largely shaped by the size of oil revenues.
Income from oil production could reach $2 billion a year although proposals for a wealth fund could face resistance from critics who argue the money is needed now for spending priorities, a government source said.
“Although it is not conclusive, it (annual oil revenue potential) is estimated to have an upside of around $2 billion when production ramps up”, said the source, who declined to be named because of the sensitivity of discussions.
The source noted that it was not certain that the fund would be given the green light, noting an alternative option-investing in key domestic infrastructure project was also under discussion.
Ghana is the latest Africa state, alongside Nigeria, Angola and Tunisia to study ways to ring fence energy windfalls for future generations.
Ghana, the world’s number two cocoa producer and Africa’s second –biggest gold miner after South Africa expects to starts oil production late this year when its offshore Jubilee energy field starts operation.
It is targeting the last quarter of 2010 to begin pumping oil from its Jubilee field which is estimated to hold up to 1.8 billion barrels of oil. Output is seen rising to as much as 150,000 barrels a day within months of the start-up.