On March 11, 2025, Ghana’s Finance Minister, Dr. Cassiel Ato Forson, presented the 2025 Budget Statement and Economic Policy of the Government, outlining key fiscal measures to shape the country’s economic trajectory. As always, the energy and extractive sectors remain central to national revenue generation, infrastructure development, and economic stability. The Africa Centre for Energy Policy (ACEP) has reviewed the budget and presents key insights on its potential impact on these critical sectors.

The budget proposes the allocation of all Annual Budget Funding Amount (ABFA) revenues to infrastructure projects, marking a departure from previous practices where 70 per cent of ABFA revenues were allocated to public investment expenditure as prescribed by the PRMA, with the remainder directed towards goods and services in the selected priority areas. By channelling all ABFA revenues to infrastructure, the proposal can potentially expedite critical projects, including roads, health and education infrastructure, and railways. However, transparency, the quality of project delivery, and value-for-money considerations in procurement remain critical concerns that must be addressed to ensure long-term success.

Another key proposal is to reduce GNPC’s share of net Carried & Participating Interest (CAPI) from 30 per cent to 15 per cent. While this measure appears to compel the Corporation to cut down its expenditures, it does not take into account the fact that GNPC has managed to shield its profitable additional 7 per cent interest in the Jubilee field—originally held by JOHL and now managed by its subsidiary, GNPC Explorco—from the country’s petroleum revenue governance framework. The cumulative receipts from the additional 7 per cent interest in Jubilee stand at approximately $418 million as of June 2024. As a result, the Corporation may not be significantly impacted by the proposed reduction and could continue its characteristic spending practices without any significant reforms.

The budget also proposes an amendment to the Mineral Income and Investment Fund (MIIF) Act to ensure that 80 per cent of mineral royalties, which were previously maintained by MIIF, are transferred to the Consolidated Fund for infrastructure development. The MIIF Act and the Fund were originally established to facilitate the Agyapa Royalties deal, which was later rescinded following widespread stakeholder opposition. Despite the failure to implement Agyapa, the government continued to allocate about 80 per cent of risk-free mineral royalties to MIIF for discretionary investment—funds that could have otherwise supported direct socio-economic investments through the national budget. Given concerns about MIIF’s opaque investment strategy and suboptimal investments, the proposal to amend the MIIF Act is welcomed. However, there is a need for a comprehensive value-for-money review of all existing MIIF investments, accountability for Fund managers, and a clear commitment from the government to introduce a Mineral Revenue Management Act to govern mineral revenue expenditure with greater transparency.