- GNPC faces financial crisis due to government's $1 billion debt.
- Quasi-fiscal expenditures burden GNPC
- PIAC seeks law review for GNPC independence
- GNPC survival at risk post-2026 funding halt
The Ghana National Petroleum Corporation (GNPC) is facing a financial crisis due to the government’s massive debt of almost $1 billion. According to the Public Interest and Accountability Committee (PIAC), this debt is threatening the corporation’s viability, especially since it will no longer receive funding from the Petroleum Holding Fund after 2026.
PIAC’s Technical Manager, Mark Agyemang, highlighted that the government’s indebtedness to GNPC is causing financial “headaches” for the corporation. The government has requested GNPC to pre-finance or provide guarantees and loans to other state-owned enterprises, such as VRA, Karpowership, ECG, and the Tema Oil Refinery. This has resulted in GNPC being owed close to $1 billion, which the state is supposed to pay but hasn’t.
Agyemang emphasized that the government’s actions are undermining GNPC’s capacity to fulfill its primary responsibilities and contribute to its development. He advocated for a review of the law establishing GNPC, P.N.D.C.L 64, to enable the corporation to assert its financial independence. This would involve diversifying the governance structure to include independent appointees who can say no to government demands.
The Petroleum Revenue Management Act states that GNPC will no longer receive funding from the Petroleum Holding Fund after 2026. This raises concerns about the corporation’s survival, given its current financial struggles. PIAC warns that GNPC risks collapse if the government’s debt is not addressed.
To ensure GNPC’s sustainability, it’s essential to address these challenges and implement PIAC’s recommendations. The corporation’s financial viability is crucial for Ghana’s petroleum industry, and prompt action is needed to prevent its collapse.
GNPC’s financial struggles have been ongoing, with expenditures on non-core projects, such as the Western Corridor road enclaves, totaling $124.66 million as of 2022. This underscores the need for the corporation to focus on its primary responsibilities.
The government’s debt to GNPC poses a significant threat to the corporation’s survival. Addressing this issue and implementing reforms to ensure GNPC’s financial independence is crucial for Ghana’s petroleum industry.
