Ghana Reviews Downstream Petroleum Audit Contract With SML

President Akufo-Addo Acknowledges Benefits but Calls for Contract Review

President Nana Addo Dankwa Akufo-Addo recognizes the positive impact of Strategic Mobilisation Ghana Limited’s (SML) downstream petroleum audit services on the Ghana Revenue Authority (GRA). However, a recent audit by KPMG identified areas for improvement in the contract.

Key Findings:

• SML’s services significantly increased recorded petroleum volumes (1.7 billion liters) and generated substantial tax revenue (GH¢2.45 billion).
• The audit identified qualitative benefits like real-time monitoring and a multi-step reconciliation process.
• Concerns were raised regarding procurement processes, service delivery, and potential revenue leakages.
• The audit highlighted a lack of proper needs assessment, single-source procurement, and missing parliamentary approval for the multi-year contract.
• SML’s partial service delivery and the GRA’s weak monitoring mechanisms were also pointed out.

President’s Directives:

• The current variable fee structure will be replaced with a fixed fee structure.
• Other contract provisions, including intellectual property, termination clauses, and service expectations, will be reviewed.
• Uncommenced services like upstream petroleum audit and mineral audits will be terminated, with a focus on proper needs assessments for future endeavors.
• The Ministry of Finance and GRA will renegotiate the contract terms with SML.
• Stringent performance monitoring and adherence to the Public Financial Management Act (Act 921) will be emphasized.

Moving Forward:

The President’s actions aim to address identified shortcomings, ensure regulatory compliance, and safeguard public resources. The Ministry of Finance and GRA are tasked with implementing these directives and reporting progress to the President’s office.