This blog post explains how falling oil prices expose Ghana's governance challenges. In Ghana, the story of the fall in oil prices cannot be separated from the fragility of the budget before the decline. In 2012, an election year not long after the start of oil production, civil service pay reforms and the introduction of a fuel subsidy triggered a rapid expansion in the budget deficit. This has since proved difficult to rein in. Facing financial difficulties, the government has made moves to unshackle itself from some of the fiscal rules. While the current situation may demand extraordinary measures, short-term solutions can easily undermine Ghana’s strategy for dealing with well-known problems associated with resource revenues.

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Natural Resource Governance Institute