Finance Ministry maintains offsetting $50 million debt with non-capped funds – PIAC

The Public Interest and Accountability Committee (PIAC) says the Ministry of Finance claimed it was no longer indebted to the Ghana National Petroleum Corporation (GNPC) as it had agreed to write off a US$50 million advance owed the corporation.

The US$50million was advanced to the Ministry of Finance for the construction of Western Corridor roads in the Atuabo Gas Processing Plant enclave in 2014 and was expected to have been repaid in three months.

According to PIAC, the Ministry had explained that it had deliberately not capped earmarked funds to the corporation and so did not retain GNPC’s flows since the passing of the Earmarked Funds Capping and Realignment Act, 2017 (Act 947) which empowered the Finance Minister to cap all earmarked funds at 25 per cent.

These developments were highlighted in the 2022 PIAC annual report on the Management and Use of Petroleum Revenue in the country.

The committee in its reports over the years has raised concerns over the way the corporation was used of to finance quasi-fiscal expenditures.

This includes the continuous funding of the Western Corridor Gas Enclave Roads since 2014 which as of 2022 stood at US$124.66 million.

The report noted that in 2021 for example, GNPC could not realise its budgeted revenue from loans and guarantees amounting to US$126.68 million out of an accumulated total of US$318.09 million owed the Corporation by Government and its agencies since 2011.

In 2022, the Corporation budgeted to receive at least US$183.47 million out of a total amount of the US$316.38 million, excluding Karpower guarantee, and gas indebtedness owed it by Government of Ghana and its Agencies.

As at the end of 2022, however, a total amount of US$192,558,295.34 was recovered with an amount of US$36,534,424 recovered from the ECG HFO Commitment (Litasco) in 2022.

PIAC has therefore called on GNPC to double up efforts at recovering loans to Government and its agencies to ensure that the Corporation’s work programme did not suffer from non-implementation.

“For now, GNPC should discontinue granting loans and guarantees until significant recoveries are made with respect to outstanding loans and guarantees owed the Corporation” the committee recommended.