Contents lists available at ScienceDirect Energy Research & Social Science journal homepage: www.elsevier.com/locate/erss Perspective Balancingdebtwithsustainability?Fiscalpolicyandthefutureofpetroleum revenue management in Ghana Ishmael Ackah a, ⁎ , Crispin Bobio b , Emmanuel Graham c , Charles Kwadwo Oppong d a Department of Economics, School of Liberal Arts and Social Science, GIMPA, Ghana Airways Ave, Accra, Ghana b Baobab Energy Consult, Accra, Ghana c Political Science Department, University of Windsor in Canada, Windsor, ON N9B 3P4, Canada d Nobel International Business School, Legon-Accra, Ghana ARTICLEINFO Keywords: Petroleum revenue management Fiscal policy Natural resource governance Sustainable development ABSTRACT Among other things, sustainable development requires that countries prepare for the future. This requirement was not lost on policymakers in Ghana when both the Petroleum Revenue Management Act (PRMA) and public financialmanagementlawswerebeingprepared.InthePRMAforinstance,astabilisationfundhasbeencreated. The stabilisation fund has two main goals. The first is to cushion government expenditure during oil price fall. Second, excess from the cap of the stabilisation fund is transferred to the Sinking Fund for debt repayment. Similarly,thereisaheritagefund,whichservesasanendowmentforfuturegenerations.Despitethesefundsand the implementation of a diversification strategy, it has been observed, Ghana is characterised by high budget deficits and borrowing levels. This study analysed data from the Bank of Ghana and the Ministry of Finance to ascertain whether the purpose for which these fiscal measures were put in place have been achieved. The findings show that oil production has not done much to ensure fiscal discipline and reduce the budget deficit. In addition, while the share of oil revenues in total domestic revenues has been rising, domestic revenues as a proportion of GDP has remained stagnant whilst debt policy rating has deteriorated. Instead of complementing, oil revenues may be replacing other sources of revenue. 1. Background “To live is to choose. But to choose well, you must know who you areandwhatyoustandfor,whereyouwanttogoandwhyyouwantto getthere. 1 ”ThesewerethewordsofthelateKofiAnnan,theformerUN General Secretary. Indeed, when oil was discovered in commercial quantities in 2007, Ghana decided to choose a path that is different from how it has managed its solid mineral resources over the past 100 years. In addition, [1] posits that Ghana's policy and institutional de- sign around that time was influenced by the fear of being affected by the oil curse. According to [2] the oil discovery was greeted with much interest and euphoria. The expectation was that oil would propel Ghana's economy to a more significant economic height. On the other hand, there were fears of contracting the resource curse [3]. To ensure that thecountrybenefitsfromtheoilfind,reducepoverty,andminimisethe chances of the oil curse occurring, a number of laws were passed. Prominent among these were the petroleum revenue management law, the local content regulations, the Petroleum Commission Act, the Pet- roleum Exploration and Production Law (2016) (see [4–8]). Interestingly, the principles underlying all the petroleum-related laws that have been passed include accountability, transparency, ef- fective fiscal management, diversification and sustainable development [9]. On how to achieve sustainable development in oil-producing countries, two contrasting views have become central in the literature. First is the concept of strong sustainability, which posits that natural capital cannot be substituted by human-made capital. According to the proponents, sustained growth is only possible through the continual reduction in resource consumption [10]. To the proponents, natural resources should be sustainably consumed or left on the ground. The other viewpoint espoused by [[11],[12]] and neoclassical economists is weak sustainability, which calls for substitution between natural re- sources and human-made capital. The assumption of the weak sub- stitutability is that sustainable development can be attained by https://doi.org/10.1016/j.erss.2020.101516 Received 24 June 2019; Received in revised form 5 March 2020; Accepted 12 March 2020 ⁎ Corresponding author. E-mail address: Ackish85@yahoo.com (I. Ackah). 1 See http://news.mit.edu/1997/annansp Energy Research & Social Science 67 (2020) 101516 2214-6296/ © 2020 Elsevier Ltd. All rights reserved. T