The Public Interest Accountability Committee (PIAC) says Ghana’s Sovereign Wealth Fund, also known as the Ghana Heritage Fund (GHF), generated $29 million in annual income in 2023.

In its annual report, PIAC stated that the GHF’s realised revenue for 2023 was $29 million, with the fund’s total value standing at $1 billion since its inception in 2011.

According to the report, the Ghana Petroleum Fund (GPF) received $330 million, which represents 56 percent of the revised planned allocation for 2023 and 57 percent of the distribution to GPFs for the same period in 2022.

The study further indicated that the distribution to the Ghana Heritage Fund in 2023 was $99 million, accounting for 30 percent of the allocation GPF.

In compliance with the Petroleum Revenue Management Act (PPRMA) requirement, not less than 30 percent of the amount remaining after the distribution to the Annual Budget Funding Amount (ABFA) shall be disbursed to the GHF.

The distribution, according to the report, was 43 percent lower than the distribution to the GHF for the same period in 2022 and 56 percent higher than the revised projected distribution to the GHF for 2023.

The committee also proposed options to increase the fund’s earnings because of an imminent depletion of Ghana’s oil reserve in the coming years.

In an interview on the topic, “The Ghana Heritage Fund: To Draw Down or to Save,” Mr Isaac Dwamena, the Coordinator for the Committee, rejected calls for drawing funds from the fund.

He advised the government to emulate the investment strategies of countries known for their high returns on their sovereign wealth fund to increase the returns of the GHF.

“When you look at a country like the United Arab Emirates, the income they generate through tourism is more than what they get from the oil and gas sector. I see Saudi Arabia building their economy in that direction. They are decreasing their dependence on natural resources, so they build a fund, the returns of which become an income beyond the life span of the natural resources,” he said.

“I think this should be the primary focus that should guide the management of the heritage fund,” he added.

The PIAC Coordinator said these countries build their fund to the extent “that it becomes a major budgetary support for the government.”

“We should have an aim, target, and investment strategy around heritage fund that, by the 20th year of 2011, we want to build the fund to get $2 billion. How do we get there? We set aside 12 percent of the fund for the next 20 years so that the interest that it accrues will also increase,” he said.

Mr Dwamena added “countries, including Norway and the UAE, are able to make some withdrawals from their fund due to the returns and investment strategy.  Increasing allocation to the fund can improve the capacity of the fund to generate more income for budgetary support.”