Half year return on petroleum funds declines

Amid the novel coronavirus, returns on Ghana’s petroleum funds has declined by 23.48 percent for the first half of 2020 from the income accrued during the same period of 2019.

According to the semi-annual report on the Petroleum holding fund, for first half of 2020, the Ghana Petroleum Funds returned a net realized income of US$8.57 million compared to US$11.20 million in the same period 2019.

The decline in the return for the first half is attributable to a fall in the returns made on the Ghana Stabilization Fund.

Of the total amount, the Ghana Stabilization Fund contributed 17 percent or US$1.43 million to total net income compared to US$4.48 million in the same period last year, whilst the Ghana Heritage Fund (GHF) contributed 83 percent or US$8.57 million compared to US$6.72 million in first half 2019.

However, the report indicates that the general fall in yields across all tenors of the U.S. treasury instruments during first half of this year, led to an increase in the capital appreciation of bonds as prices increased, improving the marked- to-market performance of the Ghana Petroleum Funds.

Total return on investment of the GHF during the first half of 2020 was 5.28 percent as compared to 4.71 percent, same period of 2019. The two-year annualised return of GHF was 6.58 percent whilst the three-year annualised return was 4.26 percent.

Reserves

The GPFs reserves at the end of the first half of 2020 was US$741.88 million, comprising GHF’s US$608.54 million and GSF’s US$133.34 million, compared to US$977.36 million in same period of 2019, comprising GHF’s US$521.82 million and GSF’s US$455.53 million.

Withdrawals from the GSF amounting to US$307.54 million in first half of this year caused the fall in the GPFs reserves and led to a fall in realised income for the first half of 2020 compared to the corresponding period of 2019.

The Petroleum Holding Fund Account (PHF) at the end of the first half of 2020, held a balance of US$0.42 million which comprised surface rental of US$0.014, corporate tax of US$0.21 and a mandatory balance of US$0.20 million.