The Public Interest and Accountability Committee (PIAC), has noted the Ghana National Petroleum Commission (GNPC) as at end June 2020, had not received payment in respect of the $50 million advance to the Ministry of Finance in 2013.
The loan made to and expected to be repaid in 3 months, was for the construction of the Western Corridor roads, which leads to the Atuabo Gas Processing Plant.
According to PIAC’s semi-annual report on the management of the nation’s petroleum revenues, a direction by the Finance Ministry to the GNPC to have the loan amount expunged from it books in 2018, was in accordance to the Earmarked Funds Capping and Realignment Act.
“In December 2018, the Ministry directed GNPC to expunge the amount from its books, on the grounds that per the Earmarked Funds Capping and Realignment Act, 2017 (Act 947), the Minister for Finance is empowered to cap all earmarked funds at 25 percent of tax revenues. The Ministry indicated that the Government had not retained GNPC‘s flows thus far, with the view to offsetting the $50 million loan,” the report said.
The report however, further noted that the GNPC is making efforts to engage the Minister for Energy, Peter Amewu, and a Select Committee on Mines and Energy to discuss further the issue with the Finance Ministry.
The 2017 & 2018 report of the Ghana Extractive Industries Transparency Initiative (GHEITI) on the oil and gas sector revealed that the Finance Ministry had directed the GNPC to expunge from its loan books, $50 million advanced to it.
The directive, according to GHEITI, however, followed a promise of the Finance Ministry that provision had been made by the Ministry in the 2019 Budget for the settlement of the loan to GNPC.
“On September 7th 2018, the ministry wrote to inform the Independent Administrator preparing the Ghana 2016 EITI Report (with the Corporation in copy) that, provision had been made in the 2019 Budget for the settlement of the loan to GNPC,” noted GHEITI.
GHEITI in its recommendations to the Ministry, noted that the Ministry’s decision to have the amount expunged was viewed by some industry stakeholders as not the best on the part of the Ministry of Finance and, therefore, urged the two parties involved to resolve the issue amicably for the purpose of transparency.
GHEITI also asked the Ministry of Finance to critically review its decision to cap the allocations of GNPC at 25 per cent of tax revenue.
As it believes the move further reduces the corporation’s allocations to meet operational expenditure.
“This has the potential to deny the national oil company of the available resources to finance critical exploration activities and undermines the ability of the corporation to wean itself from allocation of petroleum revenue by 2026,” it noted.
The report further indicated that the 2017 reconciliation of petroleum receipts recorded a net discrepancy of negative $652,814 and an absolute discrepancy of $982,678.
The reconciliation of 2018 also had a net discrepancy of $311,000 and absolute discrepancy of the same amount.
The net and absolute discrepancy in 2017 represent 0.063 per cent and 0.096 per cent, respectively, of the total government receipts in 2017.
The 2018 discrepancy represents 0.018 per cent of total government revenues.
