Finance Ministry ‘compelled GNPC to expunge $50m loan from books’ – PIAC report

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The Ministry of Finance has been cited for compelling Ghana National Petroleum Corporation (GNPC) to cancel a $50 million indebtedness to the Corporation.

The money was withheld by the Finance Ministry in 2014 by the previous government and is yet to be paid.

The 2018 Public Interest and Accountability Committee (PIAC) report, which captures this activity, said it was inappropriate for the Finance Ministry to compel GNPC to expunge the debt.

The transaction was also not backed by any form of agreement spelling out the terms of the loan and a repayment plan.

The breakdown

Political Interference

The wanton political interference in GNPC’s affairs and the tendency to use it to finance quasi-fiscal expenditure, if not checked by Parliament, according to the report, will undermine the Corporation’s operational efficiency and threaten its sustainability.

While the Committee is satisfied with the quality of spending by the Foundation, it recommends to Parliament, to consider placing some restrictions on the proportion of GNPC’s budget that can be channelled into CSI.

This is important, to forestall any future excessive expenditure in this category.

Natural Resource Economist, Gideon Ofosu-Peasah, has said that in the face of the current spending by GNPC for the quasi-fiscal expenditure of the government.

For him, there should be a cap on the spending on corporate social investments.

“The focus of the business should not only be focused on its core mandate. It should also be concerned about its environment and society as well but it should be. If that will derail you from your core mandate then there should be a cap”.

Mandate of GNPC

Ghana National Petroleum Corporation (GNPC) was established in 1983 and started operations in 1985 to support the Government’s objective of providing an adequate and reliable supply of petroleum products and reducing the country’s dependence on crude oil imports through the development of the country’s own petroleum resources.

In addition to the functions of petroleum exploration, development, production and disposal activities, the Corporation assumed responsibility for the importation of crude oil and petroleum products to meet national demand.

GNPC is Ghana’s national oil company mandated to explore on its own or partner all contractors in the exploration and production of petroleum in Ghana.

Source:Luv fm