Adnan Adams Mohammed
Government indebtedness to the Ghana National Petroleum Corporation (GNPC) stands at a staggering US$1.14 billion as at 2022, posing an imminent threat to the Corporation.
A Public Interest and Accountability Committee (PIAC) report indicates that as of the end of 2022, the government owed GNPC a staggering $1.14 billion.
This comprises of payments made on behalf of the government, state-owned enterprises (SOEs), national and local projects, as well as gas supplied to the Ghana National Gas Company (GNGC).
PIAC raises concerns about GNPC’s expenditure, which extends beyond its core mandate, hindering its ability to function as an autonomous commercial entity in the petroleum sector.
Substantial sums, such as $124.66 million, were spent on Gas Enclave roads in the Western region, often at the behest of the government and other entities, diverting resources from GNPC’s primary responsibilities.
PIAC warned that GNPC faces a precarious future post-2026 when it will cease to receive funding from the Petroleum Holding Fund as per the Petroleum Revenue Management Act (PRMA).
The Corporation may struggle to survive without this financial support, given its existing challenges.
Political influence poses another significant risk to GNPC, compelling it to engage in quasi-fiscal expenditures and extend advances to other state-owned entities, encroaching upon central government prerogatives.
To mitigate these issues and ensure GNPC’s sustainability, PIAC recommends several measures. Firstly, GNPC should prioritize its mandate and development by refraining from making payments on behalf of the government and retrieving owed funds expeditiously.
Additionally, the Corporation should cease funding external programmes and projects at the request of other agencies.
