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Business News of Wednesday, 14 October 2020

Source: Business 24

Large fiscal benefits projected from proposed petroleum hub

Ghana is expected to rake in US$1.56 billion in export tax revenue by 2030 from the development of a petroleum hub to add value to the country’s petroleum resources.

The projection was contained in the report of the Parliamentary Select Committee on Mines and Energy on the Petroleum Hub Development Corporation Bill 2020.

The purpose of the bill is to establish the Petroleum Hub Development Corporation to promote and develop a petroleum and petrochemicals hub in the country.

Speaking during the second reading of the bill on Tuesday, a Deputy Minister for Energy, Joseph Cudjoe, said the hub will propel a 130 percent increase in GDP through the injection of US$60 billion worth of investments into Ghana’s economy by the year 2030.

The development of the hub will include construction of key infrastructure such as jetties, storage tanks, refineries, an LNG facility, power plants, and infrastructure for offshore activities.

The project is expected to contribute enormously to economic growth through value addition to petroleum resources and job creation. The hub, the report said, will drive the growth of various industries including petrochemicals and create 780,000 direct and indirect jobs.

Other anticipated benefits are tax receipts from downstream value chain operations and the provision of basic social amenities, such as schools, health facilities and leisure parks.

The establishment of a public corporation to oversee the development of the hub will provide the needed confidence to potential investors who are desirous of investing in it, the report said.

Government is expected to contribute US$6 billion of the total investment target of US$60 billion, with private capital providing the remainder.

The government will also provide the initial basic infrastructure, including land, road and railway networks, water and electricity.

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