Following the December 2010 start-up ofthe Jubilee Field, Ghana has begun receiving royalty and taxrevenues from oil production. At peak production, Jubileecould generate over US$1 billion in annual revenues forGhana, a figure that will constitute 3 percent of 2011non-oil Gross Domestic Product, or GDP and 18 percent oftotal government revenue. Recognizing the critical role oilrevenues will play in Ghana's economic development;government is increasingly focused on generating short-termand long-term forecasts of oil revenues as inputs to itsplanning and policy-making. Oil revenue forecasts are neededfor budgeting, long-term and medium-term fiscal planning,tax policy, and a broad set of petroleum and energy sectorpolicy decisions. The immediate focus is on predicting therevenues that will flow from Jubilee itself; however, theannouncements of significant additional discoveries atMahogany Deep, Enyenra, Tweneboa, Teak, Sankofa, Dzata, andParadise suggest that long-term oil revenues could bederived from multiple sources. Oil revenue forecasting isnot intrinsically difficult but attention to details isimportant. For Ghana, the most challenging implementationdetails will be the ones related to the start-up of oilproduction at Jubilee. Price volatility is an ever-presentchallenge to forecasters but there are accepted approachesfor taking this into account. However, the key to asuccessful on-going revenue forecasting process is todevelop defined responsibilities and routines forinformation sharing, consistent and realistic methods forforecast calculation, and clear communication anddissemination of assumptions and results.
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