SML Brouhaha: Prof. Kobby Mensah asks critical questions

Prof. Kobby Mensah, a renowned political marketing lecturer, has questioned why stakeholders remained silent about the Strategic Mobilisation Ghana Limited’s (SML) contract with the Finance Ministry and the Ghana Revenue Authority (GRA) until recently.
Prof. Mensah furthered asked for evidence that may suggest that these stakeholders raised any concerns before the contract took effect.

“According to the documentary, most of the stakeholders who spoke against the SML deal are saying those activities that SML is carrying out are being done already? If this assertion is true why then did they allow the contract to go on without speaking out against it? What evidences are available to show that they raised objections? How do we tell that questions are not being raised now because someone is interested in it? Prof. Mensah wrote on his Facebook page.

Prof. Mensah was of the view that the complains that a timber merchant is not qualified to venture into the IT sector is not enough to disqualify SML from undertaking the project.

“The idea that a Timber Merchant can’t go into IT business is not sufficient to discredit SMLs competences because businesses diversify, and entrepreneurs or investors are not known to hold competences in the businesses they venture into before they do so. There are so many unanswered questions that we need clarity on”, he added.

Prof. Mensah’s post comes at the back of Prof. Ransford Gyampo admonishment for crusaders against corruption that their actions should not to be fueled by hatred and ignorance.

“There’s absolutely nothing wrong with raising queries about the activities of SML and calling for investigations. But we must be sure of the motives of thise if us leading the crusade. It must only be the desire to gate-keep and fight corruption, else we shoot ourselves in the foot by killing locak initiatives and destroying what can potentially be beneficial to us as a nation,” Prof. Gyampo stated.

SML has earlier tried to set the record straight explaining that its contract is for five years and not 10 years as being peddled around. Additionally, the company refuted the assertion that it receives a substantial $100 million annually for its services.

“The documentary represents a set of misrepresentations, false claims, and a general lack of understanding of the entire operations of the company. We challenge Fourth Estate to produce any contract anywhere that is for a 10-year period.”

“The 5th PPA Board at its 46th Board meeting in a letter referenced PPA/CEO/09/2286/23 approved a contract duration of five (5) years.”
It is important to note that the collaboration between the Customs Division of the Ghana Revenue Authority and a revenue and assurance audit firm, Strategic Mobilization Ghana Limited, has helped the country to rake in an extra GH¢3 billion in three years.

The extra revenue which would have been lost to the state was realized when the measurement and reporting of petroleum product supplies from over 20 depots across the country was digitalized by SML Ghana.

Since the GRA/Customs and SML Ghana partnership in 2020, the average volume of petroleum products per month recorded by SML meters is 400 million liters, which has resulted in extra revenue of GH¢3 billion for the government between June 2020 and June 2022.
By that feat, the Customs Division of GRA which has a unit responsible for collection from the petroleum downstream sector mobilized GH¢22.26 billion as against a target of GH¢20.20 billion, exceeding the target by GH¢2.06 billion.

This came to light at a stakeholder engagement SML Ghana held recently in Tema with the leadership of the downstream petroleum unit of the Customs Division to discuss the new initiatives and to solicit inputs on how both sides can improve on the success to further enhance the country’s revenue.

Context

GRA last year mobilized GH¢75.5 billion in domestic revenue, GH¢3.60 billion more than it was tasked to collect.
The collection was also a five per cent increase over last year’s target of GH¢71.94 billion.

The feat also means that the domestic revenue the GRA mobilized was 31.5 per cent more than what it collected in 2021.
The stakeholder engagement brought together the various Customs heads in charge of downstream petroleum depots across the country’s 16 regions.

Assistant Commissioner, Petroleum Downstream at GRA Customs Division, Sampson Anim, earlier lauded SML Ghana for its transformative technology to maintain transparency while enhancing the sector and increasing revenue.

“The system is perfect. What we previously had was a manual system of auditing but this is a digital system that captures all our lifting from the depots through delivery to the fuel retail outlets and whatever destinations the product is supposed to be,” he said.

SML Ghana’s impact

Known as the Electronic Metering Management System (EMMS), the SML Ghana system digitizes the entire process chain by providing an end-to-end audit and assurance to GRA in the downstream petroleum sector.

SML is a wholly-owned Ghanaian company with the strong financial backing of investors with varied business interests in Ghana across different industries.

Steered by a governing board, the organization currently has two main divisions with its Tema office specializing in the audit of downstream petroleum products, while the Osu office deals mainly with trade transaction pricing and business process audits.

A report by the Fourth Estate raised questions about the contract’s validity, with the Finance Minister Ken Ofori-Atta expanding it and estimating a potential cost of $100 million to the state over the next decade.

Under the terms of the contract, SML is tasked with monitoring and reporting fuel product diversion and dilution, as well as overall noncompliance in the petroleum industry.

This responsibility was previously carried out by the National Petroleum Authority (NPA).
Following this, the Minority in Parliament has called for a full-scale parliamentary probe into the contract between the government and the private entity.

The aim is to safeguard billions of cedis that might have been lost in the downstream petroleum sector.