Ghana’s Heritage Fund record -1.7% on RoI

The total return on investment for the Ghana Heritage Fund (GHF) has recorded a -1.76% at end of 2021 compared to 4.66% recorded at the end of 2020. The two-year annualized return on investment was 1.40%, while the three-year annualised return on investment was 2.87%. For the second half of 2021, the difference between the U.S. 10-year Treasury note yield and the 2- year note yield tightened from 121.74% in June 2021 to 77.40% at the end of H2 2021. The 3-month Treasury bill rate fell by 0.01 bps from 0.04% to end H2 at 0.03%. The U.S 10-year Treasury note yield increased by 4 bps from 1.47% in June 2021 to 1.51% in December 2021, the 30-year Treasury bond yields decreased by 11 bps within the same period, while the yield of the 2-year note rose by 48 bps from 0.25% in June 2021 to 0.73% at half-year-end leading to a modest steepening of the yield curve. This was at the result of Covid-19 pandemic, persistent inflation expectations, some of the reasons accounting for this steepening of the yield curve are, accelerated vaccination campaigns, reduced social distancing, signs of stronger consumer spending, and tighter monetary policy communications. The net increase in yields during H2 led to a decrease in the capital appreciation of bonds as prices fell. In H2 2021, the Ghana Petroleum Funds returned a net realised income of US$5.40 million compared to US$8.93 million in H2 2020. The Ghana Stabilisation Fund contributed 9.9% or US$0.53 million to total net income compared to US$0.88 million in H2 2020 whilst GHF contributed 90.1% or US$4.87 million compared to US$8.05 million in H2 2020. The GPFs reserves at the end of H2 2021 was US$971.43 million (GHF was US$726.54 million and GSF was US$244.89 million) compared to US$844.78 million in H2 2020 (GHF was US$644.79 million and GSF was US$199.99 million). In H2 2021, a total amount of US$433.01million comprising lifting proceeds of the Ghana Group, surface rentals, interest on PHF account and corporate income taxes were received into the PHF (PHF at the end of H1 2021, held a balance of US$60.66 million, bringing total amount to US$493.47 million). Total petroleum revenue distributed was US$478.35 million. GNPC received US$129.99 million, ABFA received US$197.62 million whiles GSF and GHF received an allocation of US$105.52 million and US$45.22 million respectively during the period under review. A balance of US$15.32 million remained in the PHF account as at 31st of December 2021. The total amount received into the PHF account for H2 2021 was US$433.01 million (Crude oil lifting total of US$285.92 million and other total income of US$147.09 million The Petroleum Holding Fund Account (PHF) at the end of H1 2021, held a balance of US$60.66 million which comprised 60th lifting proceeds of US$60.46 million from Jubilee field, a mandatory balance of US$0.20 million and PHF overnight interest of US$0.0014 million, bringing the total amount to be distributed in H2 2021 to US$493.47 million. The total amount distributed from the PHF during the period was US$478.35 million. This consists of lifting proceeds from the 60th Parcel (received in H1 2021 but distributed in H2 2021), 61st and 62nd parcel from Jubilee totalling US$198.46 million, 19th TEN lifting amount of US$70.49 million and the 8th and Over lift from SGN totalling US$77.42 million, and other incomes totalling US$131.98 million. GNPC received an amount of US$129.99 million for CAPI and EFC in H2 2021 compared to US$118.24 million in H2 2020. Total amount received by ABFA for H2 2021 was US$197.62 million compared to US$103.87 in H2 2020. The Ghana Stabilisation Fund and the Ghana Heritage Fund received US$105.52 million and US$45.22 million respectively in H2 2021 compared to US$65.77 million and US$28.19 million respectively received in H2 2020. ABFA has received a total of US$2,899.66 million representing 40% of the total revenue while GNPC has received a total amount of US$2,232.15 million equivalent to 30% of total revenue. GSF and GHF have each received an amount of US$1,546.45 million (21%) and US$653.68 million (9%) respectively. Total lifting proceeds and other income distributed to ABFA, GNPC, GSF and GHF from inception to the end of December 2021 amounted to US$7,332.14 million The Petroleum Holding Fund Account (PHF) at the end of H2 2021, held a balance of US$15.32 million which comprised a mandatory balance of US$0.20 million, PHF overnight interest of US$0.0072 million and corporate income tax of US$15.11 million.