Honorary Vice President of IMANI-Africa, Bright Simons, is questioning why the Ghana Revenue Authority (GRA) is not paying Strategic Mobilisation Limited (SML) based on the additional output in volumes but for all increases in gold production and oil consumption.
Mr. Simmons says the content of the agreement suggests until the coming into being of SML, no consumption of fuel or gold production was being recorded in the country.
According to him, paying the company for general consumption and production of oil and gold rather than the supposed additions they bring on board is illogical.
“Why not pay them based on only the additional increases in volumes? Why pay them for all increases in volumes? Because some of those increases in volumes have nothing to do with the company.
“Less than that, we don’t have to even pay them for increases in volume if you look at the actual phrasing, framing and drafting of the provisions in this contract and the one that has just been amended,” he told Alfred Ocansey on the KeyPoints on TV3 Saturday, January 06, 2024.
“In the phrasing of this contract, what has happened is that we pay them for general consumption. It’s as if until this company came along, nobody in this country was consuming petrol and so every petrol that’s consumed in this country is as a result of the work of this company is doing so we pay them 5pesewas for it and it’s the same thing with the gold and with the oil. It’s as if we are saying that until this company came to being, gold was not being produced in Ghana and so now every ounce of gold that we produce in this country, we should give them –as the contract says, as much as 0.75% of all that gold,” he reemphasised.
Background
A year-long investigation by Evans Aziamor-Mensah, Adwoa Adobea-Owusu and Manasseh Azure Awuni of The Fourth Estate, revealed that the company (SML), with the help of a section of Ghana’s media, had made false and unsubstantiated claims of its operations that have served as the basis for the payment it received.
The Fourth Estate asserted that, it appears the Ministry of Finance and the GRA were aware the claims were false, for some officials of the GRA said they had confronted the company about its claims of savings and volumes on two separate occasions.
A few hours after the reporters confronted the management of SML with the findings of the investigation and asked for a response, the major services it claimed to render to the government disappeared from the company’s website.
The investigation also uncovered that at a time players in the downstream petroleum sector were questioning the relevance of SML’s involvement, the Minister of Finance, Ken Ofori Atta, initiated a more outrageous deal that would entitle the company to over $100 million every year for the next 10 years.
A documentary released by the Fourth Estate showing these alleged corruption in the contract stirred a public conversation on the issue with Parliament indicating their intentions to commence a probe into it.
The GRA, also in a release debunked the Fourth Estate’s report, and corroborated what SML has said in its response to the contents of the documentary.
Following the back and forth and counter allegations from the respective quarters, President Addo Dankwa Akufo-Addo, ordered an audit into the contract by KPMG.
“Accordingly, KPMG, an Audit, Tax and Advisory Services firm, has been appointed to conduct an audit into the transaction, which was entered into to enhance revenue assurance in the downstream petroleum sector, the upstream petroleum production and minerals and metals resources value chain,” a press release dated Tuesday, January 02, 2024 and signed by the Director of Communication at the Presidency, Eugene Arhin, stated.
It added that the Terms of Reference of the audit are as follows: “i. conduct an audit to ascertain the rationale or needs assessment performed prior to the contract approval by GRA, and assess how the arrangement aligns with specific needs; ii. assess the appropriateness of the contracting methodology, verifying compliance with legal standards and industry best practices in the procurement process for the selection of SML;
iii. evaluate the degree of alignment between current activities and the stipulated contract scope, identifying any deviations; iv. evaluate the value or benefit that SML has so far offered to the GRA through this engagement; v. review the financial arrangements, including pricing structures, payment terms and resolution of any financial compliance issues; and vi. submit a report on your findings on the above, together with appropriate recommendations.”
The press release added that, “President Akufo-Addo has tasked KPMG to complete the assignment in two weeks.”
“The President has directed the Ministry of Finance and GRA to provide KPMG with whatever assistance they will require for conduct of the audit, and has also directed the Ministry of Finance and the Ghana Revenue Authority to suspend the performance of the contract, pending the submission of the audit report, including any payments presently envisaged under its terms,” the statement concluded.
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