Ghana’s Parliament has directed Ghana Revenue Authority, (GRA) to suspend payments to Strategic Mobilisation Limited (SML), the company it contracted in 2019 to undertake revenue assurance services.
An investigation by a private media outlet, The Fourth Estate has unveiled several anomalies with the contract and its execution.
The Finance Committee’s resolution adopted by Parliament on Friday, December 22, 2023, said the multi-year contract signed with SML should have been approved by Parliament but this was not done.
According to the committee’s resolution , the contract between GRA and SML being a multiyear commitment requires parliamentary approval under section 33 of the Public Financial Management Act 2016.
It also recommended that all payments beginning the next fiscal year be suspended until the house considers the committee’s report on its investigations.
A contract is deemed to be multi-year when it goes beyond a year, according to the Public Financial Management Act 2016. This means that the first contract for revenue assurance in the downstream petroleum sector in 2019 and the second covering the upstream petroleum and the gold mining sector in 2023 are in contravention of the law.
Aside from this, Parliament also said it would investigate the matter.
The Committee further decided to investigate these projects in accordance with article 103 of the national constitution and will be submitting its report to this house.
The minority leader in parliament, Dr. Cassiel Ato Forson, said the deal in its “current shape is not valid.”
The intervention of Parliament is in response to The Fourth Estate‘s investigation of how the GRA and the Ministry of Finance signed a deal it called “shady deal with SML”, an offshoot of a timber company in Ghana. The downstream petroleum sector contract earns SML up to GH₵24 million every month.
The investigation also showed that SML has been awarded a contract worth nearly US$100 million a year for revenue assurance in the upstream petroleum and gold mining sector in 2023.
The Fourth Estate investigations also showed that SML had made false claims that it was checking under-reporting, diversion and dilution in the country’s downstream petroleum sector. When we pointed the false claims to the company, the Managing Director, Christian Tetteh Sottie, admitted the company was not into those services.
“Oh no, we are not involved in diversion. We are only at the depots. If the thing [petroleum product] is lifted, we don’t know if [it is diverted],” Mr. Sottie said.
He added: “It is GRA, Customs, that will determine where it goes, and they will follow up. We are not capable. We don’t have men outside.”
“We don’t go into that,” he said when we asked whether SML had “ever detected or identified any issues of under declaration.”
SML also claimed that it had been able to save Ghana GH₵3 billion in the last three years since it started its work.
When we asked Christian Tetteh Sottie how the company saved the money, he said he did not about the claim of saving GH₵3 billion.
The IT Engineer for SML, Prince Sarpong, said it was a misreporting caused by the journalists he had made a presentation to.
“It was a mistake because if you look at other publications, it was just a consultation between GRA and SML. I did the presentation, and I was giving them the expected revenue. Our system can generate expected revenue, so what we did was not even the accurate figure because only GRA can give accurate figures. So, that is a caption by journalists.“
After the publication of The Fourth Estate‘s investigation, the GRA reiterated the discredited claim that SML had saved Ghana GH₵3 billion. Revenue figures we obtained from the GRA from 2012 to 2022, however, showed that the average growth yearly in revenue before SML’s engagement was 47% as compared to SML’s period of 13.6% average yearly growth.
Although the GRA contracted SML for revenue assurance services, it does not use the readings from SML’s metres for revenue collection. The GRA officials told The Fourth Estate that they use the readings metres installed at the loading gantries at the various depots across the country.
Source: Ruth Adjorlolo
