Does Ghana, A Developing Resource-Rich Country, Need Sovereign Wealth Funds? A Case Study of Ghana’s Sovereign Wealth Funds

Abstract

Natural resources generate wealth for developing resource-rich countries associated with substantial financial inflows. Managing such huge returns creates challenges resulting in corruption and mismanagement in developing resource-rich countries. Developing resource-rich countries have thus resorted to Sovereign Wealth Funds on the advice of their development partners. Meanwhile, developing resource-rich countries borrow to address developmental challenges. Ghana’s Petroleum Revenue Management Act creates Sovereign Wealth Funds. This paper argues that due to Ghana's developmental challenges, Ghana requires the immediate use of the revenue rather than borrowing domestically and overseas for capital projects. Ghana must rethink the creation of Sovereign Wealth Funds. Keywords : sovereign wealth funds, natural resources, resource revenue, corruption, mismanagement, borrowing. DOI: 10.7176/JLPG/130-01 Publication date: March 31 st 2023