Finance Ministry has demonstrated intent to abuse petroleum revenue, says NRGI’s Dennis Gyeyir

Dennis Gyeyir, the Africa Senior Programme Officer for the Natural Resource Governance Institute (NRGI), has said the Finance Ministry has clearly demonstrated intent to abuse petroleum revenues accrued from the country’s production of crude oil.

According to Mr Gyeyir, this is evidenced by the many instances where the Ministry has gone contrary to provisions made in the PRMA with regards to the use of petroleum funds.

“We have seen the Finance Ministry (present and previous administrations) demonstrate the intent to abuse petroleum revenues, they have been a lot cases that point to that fact.

“Capital gains on acquisitions made in the petroleum sector are not collected and recorded and even if they are, they are not channelled into the Petroleum Holding Fund but used for something else, unspent ABFA funds are not re-budgeted but are used as per the Ministry’s discretion, non-repayment of $500m loan to the Finance Ministry from GNPC, and currently the use of oil revenues from JOHL not subject to PRMA guidelines or rules,” he quipped.

He made the assertion speaking on the NorvanReports X Space on the topic “Is JOHL Under Political Capture? – Analyzing Implications of Securitizing JOHL assets for $420m LITASCO Loan” on Sunday, November 12, 2023.

Speaking on the topic, Mr Gyeyir noted that the current structure of JOHL “must be dismantled”, alluding to the fact that JOHL assets must be domiciled in Ghana and be subjected to the PRMA for greater transparency.

Meanwhile, the CSOs Budget Forum which includes the Natural Resource Governance Institute (NRGI), has called for the immediate cessation of the $420 million debt arrangement between Lukoil International Trading and Supply Company (LITASCO) and the Ghana National Petroleum Corporation (GNPC).

The call for the cessation of the debt arrangement aims to prevent the securitization of Jubilee Oil Holdings Limited (JOHL) assets against the aforementioned debt refinancing, a move also contested by the Minority in Parliament.

The GNPC’s 2023 work-plan, submitted to Parliament, revealed intentions to refinance the LITASCO SA loan facility, incorporating bank guarantees. In the plan submitted to parliament, GNPC, among others, indicated its intentions to arrange a ‘pre-export financing facility’ of up to $420 million.

In a press briefing on November 9, 2023, the CSOs Forum Budget emphasized the need for transparency and accountability by urging the government to bring JOHL assets under the operation of the Petroleum Revenue Management Act (PRMA). This move is seen as essential to ensure the proper oversight of JOHL’s operations.

Jubilee Oil Holdings Limited, a GNPC subsidiary acquired through a $164 million share purchase agreement in 2021, has become a focal point of contention.

The Minority in Parliament alleges that JOHL’s revenues are being utilized as a ‘slush fund’ for unapproved business activities by the GNPC, raising concerns about transparency and parliamentary oversight.