The Chairman of Parliament’s Mines and Energy Committee, Samuel Atta Akyea, has dismissed allegations of cheating in the GRA-SML contract as mere propaganda.
These allegations arose following an investigative report by the Fourth Estate in December 2023.
SML, in response to the report, denied claims of a 10-year contract, stating that the agreement spanned 5 years. They also refuted accusations of siphoning $100 million annually from the deal.
During a visit to the Tema division of SML for fact-finding purposes, Atta Akyea advised against hastily branding the contract as a channel for political corruption.
He emphasized the importance of awaiting the findings from President Akufo-Addo’s initiative and engaging formally based on KPMG’s assessment.
“The committee is very careful not to prejudice what President Akufo-Addo is trying to do. Let Jubilee House come out with their findings based on what KPMG will say, we will engage them formally. What I hate is to try and do propaganda when you don’t have the facts and that is what some people are doing.
“A lot of people don’t have any clue as to what these individuals, this company is doing, yet they come to conclusions and for me, that is very sad. You have not even gone to their data room to see what they are monitoring and the world-class audit they are doing, and you come to the conclusion that this is a conduit for political bribery and all the kinds of things people might want to say, it leaves much to be desired. Those who are interested in knowing the truth will know.”
KPMG is scheduled to present its audit findings on the transaction involving the Ghana Revenue Authority (GRA) and Strategic Mobilisation Ghana Ltd (SML) to President Akufo-Addo on Friday, February 23.
Originally expected on Tuesday, January 16, the deadline was extended to accommodate a request from KPMG, as confirmed by the President.
A statement by Eugene Arhin, Director of Communications at the presidency, on Wednesday, January 24, stated, “KPMG is to submit its final report no later than Friday, 23rd February 2024.”
The scrutiny intensified after an investigative report by the Fourth Estate in December 2023 implicated SML, the GRA, and the Ministry of Finance. The report alleged that the GRA had awarded SML a 10-year contract worth $100 million annually, raising suspicions of irregularities.
SML refuted claims of a decade-long contract, asserting instead that it had secured a 5-year agreement. The GRA, in a statement released on December 20, 2023, maintained that proper procedures were followed in engaging SML’s services.
However, on January 2, 2024, President Nana Addo Dankwa Akufo-Addo directed SML to halt its ongoing revenue assurance operations and mandated an immediate audit of the contract with GRA and the Ministry of Finance, assigning KPMG to the task.
In response, SML expressed confidence that the audit outcome would provide clarity and accuracy regarding its operations.
Strategic Mobilisation Ghana Limited (SML) has filed a lawsuit against the media outlet Fourth Estate, which released “The GH¢3bn Lie Documentary,” accusing SML of receiving a controversial 10-year contract from the Finance Ministry.
In the suit filed on Thursday, February 15, SML claims that the publication has severely damaged its reputation in the public domain, leading to detrimental effects on its operations.
SML is seeking ¢10 million in damages, with one million for defamation and nine million for exemplary damages due to what it describes as reckless and malicious reporting by Fourth Estate.
“Plaintiff says that the onslaught of backlash from the public which has arisen from the Defendants’ false reportage has adversely impacted Plaintiff’s operations.”
“Plaintiff says that although it published rejoinders to the Defendants’ false reportage, the Defendants have failed and/or refused to retract and apologise to the plaintiff for the false information they have consistently peddled.”
Additionally, SML is seeking a perpetual injunction against the publication of further defamatory material, a retraction and apology, and any other orders deemed appropriate by the High Court.
The Fourth Estate’s December 2023 investigative report implicated Strategic Mobilisation Ghana Limited (SML), the Ghana Revenue Authority (GRA), and the Ministry of Finance. The report alleged that GRA had granted SML a purported 10-year contract with an annual payment of $100 million, raising concerns about possible irregularities.
SML refuted the claim, asserting that it had a five-year contract instead. The GRA, in a statement on December 20, 2023, maintained that proper procurement procedures were followed.
On January 3, 2024, SML welcomed President Akufo-Addo’s directive to suspend its ongoing revenue assurance operations and undergo an audit of its contract with the GRA and the Ministry of Finance. President Akufo-Addo appointed KPMG, an audit, tax, and advisory services firm, to conduct the immediate audit. SML expressed confidence that the audit would provide a clear and accurate depiction of its operations.
However, President Akufo-Addo extended the deadline given to audit firm KPMG to complete its audit following its request.
Former CEO of Chamber of Bulk Oil Distributors, Senyo Hosi, has found himself at the center of the documentary criticizing the controversial Strategic Mobilization Limited (SML) deal.
The allegations were raised during an episode of Good Evening Ghana by the host, Paul Adom Otchere.
During the show, Otchere alleged that Mr Hosi was implicated in the creation of a documentary that seeks to undermine the work of the SML, although he could not substantiate his claim with any evidence.
The SML deal has been a subject of extensive discussions and debates following the Fourth Estate’s documentary dubbed: “The GHS3 billion lie & the billion-dollar contract.”
Background
A new investigative report has revealed irregularities in a multi-million cedi contract awarded by the Ghanaian government, raising concerns about transparency and value for money.
The report by Fourth Estate released on Monday details their findings into a deal between the government and Strategic Mobilization Ghana Limited (SML) in 2019.
Under the contract, SML is receiving large monthly payments of up to GHS24 million, despite having no prior experience in the services they claimed to provide.
SML was hired through a single source procurement process to address issues like underreporting and diversion in Ghana’s downstream petroleum sector.
However, regulatory authorities said these problems were already being efficiently handled by established systems.
The report further revealed that SML took credit on its website for revenue increases in the sector, including an unfounded claim that it had saved Ghana over GHS3 billion.
But the revenue growth has been attributed to rising volumes and increased tax rates – factors SML did not contribute to.
When confronted by the Fourth Estate, SML admitted it did not perform the listed functions and removed the false statements.
Nonetheless, the large payments continue through the questionable contract despite experts saying SML’s role duplicates existing work and the contract should be canceled.
Adding to the controversy, government agencies have refused requests to disclose payment details to SML or respond to information requests, raising questions of transparency, according to the investigators.
Fresh details emanating from the camp of Paul Adom Otchere indicates that Senyo Hosi, a respected figure within the petroleum industry, is part of a group attempting to cast doubt on the legitimacy and effectiveness of the SML deal.
The motive behind such actions remains unclear, and these claims have sparked intense discussions within both the political and business communities.
It is important to note that these allegations are yet to be substantiated, and Senyo Hosi has not publicly addressed the accusations.
Host of Good Evening Ghana on Metro TV, Paul Adom-Otchere, has defended Strategic Mobilisation Ghana Limited (SML) accused of unlawfully receiving a 10-year contract with an annual payment of $100 million from the Ghana Revenue Authority (GRA).
In a December 2023 investigative report, The Fourth Estate implicated Strategic Mobilisation Ghana Limited (SML), the Ghana Revenue Authority (GRA), and the Ministry of Finance in a contentious contract.
The report alleged that GRA had granted SML a purported 10-year contract with an annual payment of $100 million, raising concerns about possible irregularities. SML refuted this claim, asserting that it had a five-year contract instead.
The GRA, in a statement on December 20, 2023, maintained that proper procurement procedures were followed. On January 3, 2024, SML welcomed President Akufo-Addo’s directive to suspend its ongoing revenue assurance operations and undergo an audit of its contract with the GRA and the Ministry of Finance.
Reacting to this, Paul Adom-Otchere has alleged the Fourth Estate team led by Manasseh Azure put out fake documents to push their narrative. He failed to indicate the exact documents used. But he still called on the Attorney-General to take the media team on at the court.
“I stood here and said that the SML is a good one and that the allegations that had been made by the Fourth Estate by were hogwash. We found out that Fourth Estate in keeping with their perceived criminality forged documents. We put out a video from here and they went on Facebook and responded with some statement. They forged that document. We know that. The Fourth Estate in wanting to show that the contract was signed for a number of years perpetrated forgery to all their readers. They should be charged for forgery by the Office of the Attorney General and Office of the Special Prosecutor, if he is doing his work well.”
Already, the Office of the Special Prosecutor (OSP) has initiated an investigation into the controversial contract between Strategic Mobilisation Ghana Limited (SML) and the Ghana Revenue Authority (GRA).
The focus of the probe is on potential breaches of procurement processes and allegations of corruption and corruption-related activities.
Meanwhile, President Akufo-Addo appointed KPMG, an audit, tax, and advisory services firm, to conduct an immediate audit.
Dean of Graduate Students at the University of Professional Studies, Accra (UPSA), Prof. Samuel Antwi, has pointed out that the extension of KPMG’s work tenure may result in the government having to pay additional fees for their services.
President Akufo-Addo ordered an audit into the contract between the Ghana Revenue Authority (GRA) and Strategic Mobilisation Limited (SML) due to concerns and revelations about the company’s performance and the accuracy of its claims.
The audit, initially scheduled to conclude on January 16, 2024, has been extended to February 23, 2024, following a request from KPMG, which has been approved by the president.
Prof. Antwi emphasized that despite being a request from KPMG, the extension would still incur additional costs for the government as the client.
“We’re going to pay for it because as I explained for every additional time except ‘give me some few days to put up my report’ an assignment that you were given two weeks to do, if you’re given six additional weeks, it means that there is some additional works you intend to do for which the client should pay.
“You can’t tell me that a job you have spent two weeks to do, you need six weeks to write a report. So we really need to interrogate why KPMG is asking for an additional six weeks.
“It means that in evaluating the work, the pre-audit arrangement, they made some mistakes in estimating the time they needed to complete the work. And once they realised that they needed an additional six weeks to complete the work, the client would have to pay more money.”
According to him, the turn of events is rather strange and KPMG may have to explain why they could not finish within the initial two weeks.
“They should come and tell us what is the issue that they’re unable to finish in two weeks, they need to finish in eight weeks,” he said.
President Akufo-Addo has rejected the Ghana Revenue Authority’s (GRA) request to allow the continuous operation of SML’s monitoring system during the ongoing audit conducted by KPMG.
The President has specified that the suspension should persist until KPMG completes its audit and submits the findings for review.
This decision was communicated by Eugene Arhin, the Director of Communications at the Office of the President, through a press statement issued on Wednesday, January 24.
“The President has denied GRA’s request and has directed that the status quo, with respect to the suspension of the performance of the contract, should remain in effect until the completion of the audit and, subsequent, submission of the audit report by KPMG,” an excerpt of the release said.
Initially set for completion by Tuesday, January 16, 2024, the new deadline for KPMG’s work is now Friday, February 23, 2024.
This extension follows a request from KPMG to the President, seeking additional time beyond the initial two-week period provided for the task.
“KPMG is to submit its final report no later than Friday, 23rd February 2024,” the statement added.
In a December 2023 investigative report, The Fourth Estate implicated Strategic Mobilisation Ghana Limited (SML), the Ghana Revenue Authority (GRA), and the Ministry of Finance in a contentious contract.
The report alleged that GRA had granted SML a purported 10-year contract with an annual payment of $100 million, raising concerns about possible irregularities. SML refuted this claim, asserting that it had a five-year contract instead.
The GRA, in a statement on December 20, 2023, maintained that proper procurement procedures were followed. On January 3, 2024, SML welcomed President Akufo-Addo’s directive to suspend its ongoing revenue assurance operations and undergo an audit of its contract with the GRA and the Ministry of Finance.
President Akufo-Addo appointed KPMG, an audit, tax, and advisory services firm, to conduct an immediate audit.
Meanwhile, the Office of the Special Prosecutor (OSP) has initiated an investigation into the controversial contract between Strategic Mobilisation Ghana Limited (SML) and the Ghana Revenue Authority (GRA).
The focus of the probe is on potential breaches of procurement processes and allegations of corruption and corruption-related activities.
The Office of the Special Prosecutor (OSP) has initiated an investigation into the controversial contract between Strategic Mobilisation Ghana Limited (SML) and the Ghana Revenue Authority (GRA).
The focus of the probe is on potential breaches of procurement processes and allegations of corruption and corruption-related activities.
This investigative move follows a complaint filed on December 18, 2023, by The Fourth Estate, represented by journalists Evans Aziamor-Mensah, Adwoa Adobea-Owusu, and Manasseh Azure Awuni. The details of the investigation were outlined in the Office of the Special Prosecutor’s half-yearly report released on December 29, 2023.
“The Office has commenced a preliminary investigation into contractual arrangements between Strategic Mobilization Ghana Limited (a company registered in Ghana) and Ghana Revenue Authority for the stated objective of the enhancement of revenue assurance in the downstream petroleum sector, upstream petroleum production, and minerals and metals resources value chain.”
“The preliminary investigation is based on a complaint filed on 18 December 2023 by The Fourth Estate (a project of Media Foundation for West Africa) represented by three (3) journalists – Evans Aziamor-Mensah, Adwoa Adobea-Owusu, and Manasseh Azure Awuni. The complaint alleged possible corruption, including breaches of the Public Procurement Act, in respect of the contractual arrangements,” the OSP added.
In a December 2023 investigative report, The Fourth Estate implicated Strategic Mobilisation Ghana Limited (SML), the Ghana Revenue Authority (GRA), and the Ministry of Finance in a contentious contract.
The report alleged that GRA had granted SML a purported 10-year contract with an annual payment of $100 million, raising concerns about possible irregularities. SML refuted this claim, asserting that it had a five-year contract instead.
The GRA, in a statement on December 20, 2023, maintained that proper procurement procedures were followed. On January 3, 2024, SML welcomed President Akufo-Addo’s directive to suspend its ongoing revenue assurance operations and undergo an audit of its contract with the GRA and the Ministry of Finance.
President Akufo-Addo appointed KPMG, an audit, tax, and advisory services firm, to conduct an immediate audit. SML expressed confidence that the audit would provide a clear and accurate depiction of its operations.
Meanwhile, the Minerals Commission has stated that it did not play any role in the award of the contract to Strategic Mobilisation Ghana Limited (SML) for revenue assurance services in the gold production sector.
The CEO of the Minerals Commission, Martin Kwaku Ayisi, responded to a Right to Information (RTI) request, stating that the commission had no involvement in awarding the contract to SML.
Ranking Member of Parliament’s Mines and Energy Committee, John Abdulai Jinapor, has raised concerns about the exclusion of the Minerals Commission from the contract awarded to Strategic Mobilisation Ghana Limited (SML), a company that is supposed to monitor and audit the gold production sector for the government.
Mr Jinapor, also the MP for Yapei Kusawgu, emphasized the significance of involving the Minerals Commission, the government agency responsible for regulating and licensing mineral exploration and extraction in Ghana, in the contract. He asserted that the commission, with its expertise and mandate, plays a vital role in ensuring quality assurance and revenue collection in the sector.
“They are supposed to ensure that we also meet the revenue requirement, and so they have a role to play when it comes to quality assurance in respect to revenue,” he stated.
Contrary to this, the Chief Executive Officer of the Minerals Commission, Martin Kwaku Ayisi, stated that the commission “did not play any role in the award of the contract” to SML, a subsidiary of a timber company. He added that the commission has no records of losses resulting from deliberate or accidental miscalculation of revenue in the mining sector.
The contract, awarded by the Ministry of Finance and the Ghana Revenue Authority (GRA), grants SML over $100 million annually for a five-year duration, renewable for another five years. President Nana Addo Dankwa Akufo-Addo has suspended the contract and appointed international audit firm KPMG to conduct an audit within two weeks, following revelations by The Fourth Estate, an investigative news website.
Mr Jinapor criticized the clandestine handling of the contract, stating, “A common contract is that you want to ensure that there is value for money, that there is quality assurance in terms of revenue.” He urged Parliament to verify if the proper procedures were followed in awarding the contract and if other companies were given the opportunity to tender.
The MP underscored that the contract’s transparency and accountability raise questions about the government’s management of the country’s mineral resources.
An aide to the former Chief Executive Officer of the Forestry Commission, Charles Owusu, is of the firm belief that there is no shady business going on between the government and Strategic Mobilization Limited (SML).
An international audit and accounting firm, KPMG, has been appointed to audit contract between the Finance Ministry and SML, following revelations by investigative journalist Manasseh Azure Awuni about false claims made by SML regarding an earlier contract for revenue assurance in the downstream petroleum sector.
The SML contract entitled the company to over $100 million annually for a five-year period, with the possibility of renewal for another five years.
Despite admissions by GRA officials in the investigative documentary that they do not use SML’s figures to calculate taxes and revenue, GRA claimed that SML’s operation had resulted in a significant increase in volumes.
However, the Africa Centre for Energy Policy and IMANI Africa countered the GRA’s claim, stating that the available data on the Ministry of Finance’s website for statutory reporting under the Energy Sector Recovery Act (ESLA) and on the National Petroleum Authority’s (NPA) website did not support the GRA’s assertion of significant revenue increment.
In reaction to the ongoing controversy, Charles Owusu vouched for SML, arguing that it has engaged in activities that have profited the country.
“The SML contract is all about working for government but you will only be paid based on the work you do. I don’t see what corruption issue there is. GRA has come to show the effects of work of SML which has profited the country.
“Presently, if you get fuel from the depot, with the introduction of SML, the government will get hold of its revenue. You can never run away with it because they have set their meters on all the depots in Ghana and are monitoring in their offices.”
In an interview on Peace FM, he further noted that “One thing I even like is the fact that they are able to monitor even at night. They have stopped certain individuals. When you try to temper with it, their alarm blows at their office and this allows GRA officers to arrive at the scene to arrest the individuals. It has happened before.”
According to the Africa Centre for Energy Policy and IMANI Africa, “In the year SML commenced operations (2019/2020), GRA’s data indicates a 5% growth in refined petroleum product consumption relative to the previous year (19.38 million litres). In the same period, the NPA reports a 7% growth (24.71 million litres) in product consumption. In the subsequent year (2020/2021), both GRA and NPA data align, indicating an 11% and 10% growth in product consumption, respectively.”
They added: “The actual growth between 2018/2019 and 2020/2021 was about 62.95 million from NPA data and 60.15 million from the GRA Data. In the 2021/2022 year, the total consumption of refined products in the country declined by 5% and 7% according to NPA and GRA respectively.”
SML had also stated on its website that its operations had stopped “under-reporting, diversion and dilution of fuel products and general non-compliance in the petroleum industry sector.”
When The Fourth Estate team pointed out that services preventing anomalies were performed by other companies contracted by the NPA, SML management admitted the claim was false and promptly deleted it from the company’s website on the same day.
Despite this, in June 2023, the Ministry of Finance instructed the GRA to expand the scope of SML Ghana’s work.
A Ministry of Finance letter said the “Honourable Minister [Ken Ofori-Atta] has determined that there is the need to monitor the production and shipment of oil and gold out of the country.
“To this end, he will like to expand the Revenue Assurance work being performed by SML to include upstream oil drilling by the production companies and the gold mining companies,” the letter, dated June 22, 2023, said.
Due to the controversy, the SML contract, awarded by the Ministry of Finance and the Ghana Revenue Authority (GRA), has been suspended by President Nana Addo Dankwa Akufo-Addo.
Meanwhile, Charles Owusu believes that “the company and the government will be exonerated” at the end of investigations.
The Minerals Commission has stated that it did not play any role in the award of the contract to Strategic Mobilisation Ghana Limited (SML) for revenue assurance services in the gold production sector.
The CEO of the Minerals Commission, Martin Kwaku Ayisi, responded to a Right to Information (RTI) request, stating that the Commission had no involvement in awarding the contract to SML.
Additionally, the response mentioned that the Minerals Commission has no reports of losses resulting from deliberate or accidental miscalculations in revenue within the mining sector.
The SML contract, awarded by the Ministry of Finance and the Ghana Revenue Authority (GRA), has been suspended by President Nana Addo Dankwa Akufo-Addo.
An international audit and accounting firm, KPMG, has been appointed to audit the contract, following revelations by investigative journalist Manasseh Azure Awuni about false claims made by SML regarding an earlier contract for revenue assurance in the downstream petroleum sector.
The SML contract entitled the company to over $100 million annually for a five-year period, with the possibility of renewal for another five years.
Despite admissions by GRA officials in the investigative documentary that they do not use SML’s figures to calculate taxes and revenue, GRA claimed that SML’s operation had resulted in a significant increase in volumes.
However, the Africa Centre for Energy Policy and IMANI Africa countered the GRA’s claim, stating that the available data on the Ministry of Finance’s website for statutory reporting under the Energy Sector Recovery Act (ESLA) and on the National Petroleum Authority’s (NPA) website did not support the GRA’s assertion of significant revenue increment.
“In the year SML commenced operations (2019/2020), GRA’s data indicates a 5% growth in refined petroleum product consumption relative to the previous year (19.38 million litres). In the same period, the NPA reports a 7% growth (24.71 million litres) in product consumption. In the subsequent year (2020/2021), both GRA and NPA data align, indicating an 11% and 10% growth in product consumption, respectively,” the statement by the CSOs indicated.
They added: “The actual growth between 2018/2019 and 2020/2021 was about 62.95 million from NPA data and 60.15 million from the GRA Data. In the 2021/2022 year, the total consumption of refined products in the country declined by 5% and 7% according to NPA and GRA respectively.”
SML had also stated on its website that its operations had stopped “under-reporting, diversion and dilution of fuel products and general non-compliance in the petroleum industry sector.”
When The Fourth Estate team pointed out that services preventing anomalies were performed by other companies contracted by the NPA, SML management admitted the claim was false and promptly deleted it from the company’s website on the same day. Despite this, in June 2023, the Ministry of Finance instructed the GRA to expand the scope of SML Ghana’s work.
A Ministry of Finance letter said the “Honourable Minister [Ken Ofori-Atta] has determined that there is the need to monitor the production and shipment of oil and gold out of the country.
“To this end, he will like to expand the Revenue Assurance work being performed by SML to include upstream oil drilling by the production companies and the gold mining companies,” the letter, dated June 22, 2023, said.
The award of contracts to SML has faced scrutiny from members of parliament, civil society groups, and anti-corruption campaigners. Questions have been raised about the basis for awarding contracts to SML, particularly as the upstream and gold mining sectors already had existing systems in place to protect the government’s interests.
The Minerals Commission, which was set up by an Act of Parliament as “the Government agency with the primary responsibility of developing and coordinating mineral sector policies and monitoring their implementation” says it was not involved in the contract with SML to monitor gold production in the country.
The Minerals Commission said it was not involved in the award of the contract and does not have reports of revenue losses in the gold mining sector.
“The Commission does undertake regular or special audits from time to time as per its mandate to deal with such issues and we do collaborate with other Government or public institutions to do that,” the CEO added in the RTI response.
The response from the Minerals Commission follows a similar response from the Petroleum Commission, the regulator of the upstream petroleum sector in Ghana.
The Petroleum Commission, in an earlier response to an RTI request, stated that it was unaware of the contract awarded to SML for monitoring oil production in the upstream petroleum sector. Similar to the Minerals Commission, the Petroleum Commission also indicated that it had no information or reports on losses in the sector, which was the purported reason for contracting SML.
The Ministry of Finance, which declined to provide a copy of the contract, stated in response to the RTI request that it did not have reports on revenue losses from agencies in the sectors where SML was contracted to monitor.
“We do not have direct information on purported reports from agencies in the petroleum and mining sectors about losses in the downstream, upstream and mining sectors,” the ministry said.
The Minerals Commission has stated that it did not play any role in the award of the contract to Strategic Mobilisation Ghana Limited (SML) for revenue assurance services in the gold production sector.
The CEO of the Minerals Commission, Martin Kwaku Ayisi, responded to a Right to Information (RTI) request, stating that the commission had no involvement in awarding the contract to SML.
Additionally, the response mentioned that the Minerals Commission has no reports of losses resulting from deliberate or accidental miscalculations in revenue within the mining sector.
The SML contract, awarded by the Ministry of Finance and the Ghana Revenue Authority (GRA), has been suspended by President Nana Addo Dankwa Akufo-Addo.
An international audit and accounting firm, KPMG, has been appointed to audit the contract, following revelations by investigative journalist Manasseh Azure Awuni about false claims made by SML regarding an earlier contract for revenue assurance in the downstream petroleum sector.
The SML contract entitled the company to over $100 million annually for a five-year period, with the possibility of renewal for another five years.
Despite admissions by GRA officials in the investigative documentary that they do not use SML’s figures to calculate taxes and revenue, GRA claimed that SML’s operation had resulted in a significant increase in volumes.
However, the Africa Centre for Energy Policy and IMANI Africa countered the GRA’s claim, stating that the available data on the Ministry of Finance’s website for statutory reporting under the Energy Sector Recovery Act (ESLA) and on the National Petroleum Authority’s (NPA) website did not support the GRA’s assertion of significant revenue increment.
“In the year SML commenced operations (2019/2020), GRA’s data indicates a 5% growth in refined petroleum product consumption relative to the previous year (19.38 million litres). In the same period, the NPA reports a 7% growth (24.71 million litres) in product consumption. In the subsequent year (2020/2021), both GRA and NPA data align, indicating an 11% and 10% growth in product consumption, respectively,” the statement by the CSOs indicated.
They added: “The actual growth between 2018/2019 and 2020/2021 was about 62.95 million from NPA data and 60.15 million from the GRA Data. In the 2021/2022 year, the total consumption of refined products in the country declined by 5% and 7% according to NPA and GRA respectively.”
SML had also stated on its website that its operations had stopped “under-reporting, diversion and dilution of fuel products and general non-compliance in the petroleum industry sector.”
When The Fourth Estate team pointed out that services preventing anomalies were performed by other companies contracted by the NPA, SML management admitted the claim was false and promptly deleted it from the company’s website on the same day. Despite this, in June 2023, the Ministry of Finance instructed the GRA to expand the scope of SML Ghana’s work.
A Ministry of Finance letter said the “Honourable Minister [Ken Ofori-Atta] has determined that there is the need to monitor the production and shipment of oil and gold out of the country.
“To this end, he will like to expand the Revenue Assurance work being performed by SML to include upstream oil drilling by the production companies and the gold mining companies,” the letter, dated June 22, 2023, said.
The award of contracts to SML has faced scrutiny from members of parliament, civil society groups, and anti-corruption campaigners. Questions have been raised about the basis for awarding contracts to SML, particularly as the upstream and gold mining sectors already had existing systems in place to protect the government’s interests.
The Minerals Commission, which was set up by an Act of Parliament as “the Government agency with the primary responsibility of developing and coordinating mineral sector policies and monitoring their implementation” says it was not involved in the contract with SML to monitor gold production in the country.
The Minerals Commission said it was not involved in the award of the contract and does not have reports of revenue losses in the gold mining sector.
“The Commission does undertake regular or special audits from time to time as per its mandate to deal with such issues and we do collaborate with other Government or public institutions to do that,” the CEO added in the RTI response.
The response from the Minerals Commission follows a similar response from the Petroleum Commission, the regulator of the upstream petroleum sector in Ghana.
The Petroleum Commission, in an earlier response to an RTI request, stated that it was unaware of the contract awarded to SML for monitoring oil production in the upstream petroleum sector. Similar to the Minerals Commission, the Petroleum Commission also indicated that it had no information or reports on losses in the sector, which was the purported reason for contracting SML.
The Ministry of Finance, which declined to provide a copy of the contract, stated in response to the RTI request that it did not have reports on revenue losses from agencies in the sectors where SML was contracted to monitor.
“We do not have direct information on purported reports from agencies in the petroleum and mining sectors about losses in the downstream, upstream and mining sectors,” the ministry said.
Pressure group OccupyGhana has called on President Nana Addo Dankwa Akufo-Addo to permit the Auditor-General to conduct the audit of the contract between Strategic Mobilisation Ghana Limited (SML) and the Ghana Revenue Authority (GRA).
According to OccupyGhana, the President’s decision to appoint KPMG, a revenue and assurance audit firm, for the task was deemed unconstitutional.
The group asserted that this action overlooks specific provisions intended to address such situations, potentially leaving open avenues for legal challenges.
The Ghana Revenue Authority (GRA) entered into the contract to bolster revenue assurance in the downstream petroleum sector, as well as the upstream petroleum production and the value chain of minerals and metals resources.
However, a media report has questioned the deal which led the President to order an audit by KPMG.
In a statement dated January 5, 2024, the pressure group explained that the 1992 constitution, in article 187, anticipated situations where public interest in the financial matters of public institutions (such as GRA) might require special audits.
“That is why article 187(8) specifically provides that when such matters arise, the Council of State should advise the President that an ‘Article 187(8) Public Interest Audit’ is required.
Indeed, and in practice, the President may seek and then obtain that advice,” it said.
“Then, the President would request the Auditor-General to conduct the audit. This provision in article 187 is so critical and significant, that the Constitution specifically sets it down as the only instance where a president has the power to request the independent Auditor-General to do anything,” the statement explained further.
OccupyGhana, therefore, urged the government not to spend time and money on an audit that might turn out to be unconstitutional and therefore worthless adding that the country loses nothing but gains everything if the Auditor-General was allowed to conduct the audit in accordance with the article stated above.
The Pressure group further opined that allowing the Auditor-General to audit the contract would give him the power to disallow payments found to be contrary to law and then to surcharge any expenditure disallowed upon the person responsible for incurring or authorising the expenditure among others.
“We therefore urge the Council of State to seize the initiative and send its advice to the President forthwith. We also urge the President to revoke the appointment and mandate of the private audit firm, and to comply with article 187 on the matter,” the statement said.
However, it urged the Auditor-General to conduct the special audit on his own motion because he is empowered to do so under section 16 of the Audit Service Act if the President failed to comply with the constitution with regards to the auditing of the contract.
Attached below is a copy of the statement;
OCCUPYGHANA PRESS RELEASE
Accra, 5 January 2024
DEMAND FOR AN ARTICLE 187(8) PUBLIC INTEREST AUDIT BY THE AUDITOR-GENERAL INTO GHANA REVENUE AGENCY AND STRATEGIC MOBILISATION LIMITED CONTRACT
OccupyGhana has seen and read a letter dated 2 January 2023 and emanating from the Office of the President that directs that an audit be conducted into the contract between the Ghana Revenue Authority (GRA) and Strategic Mobilisation Limited (SML). This contract has attracted a lot of public interest in recent days.
While we welcome both a public interest audit and the announced parliamentary inquiry into this matter, we are concerned that the President’s choice of a private audit firm to conduct this audit could be unconstitutional as it ignores direct constitutional provision made and meant to address such situations.
In article 187, the Constitution anticipates situations where public interest in the financial matters of public auditee institutions (such as through GRA) may require special audits. That is why article 187(8) specifically provides that when such matters arise, the Council of State should advise the President that an ‘Article 187(8) Public Interest Audit’ is required. Indeed, and in practice, the President may seek and then obtain that advice. Then, the President would request the Auditor-General to conduct the audit. This provision in article 187 is so critical and significant, that the Constitution specifically sets it down as the only instance where a president has the power to request the independent Auditor-General to do anything.
It is said that ‘if a thing is worth doing, it is worth doing well.’ We should not spend time and money on an audit that may turn out to be unconstitutional and therefore worthless, leaving room for legal challenges. Ghana loses nothing but gains everything if the Auditor-General is allowed to conduct this special audit in accordance with article 187(8) of the Constitution. The several advantages with complying with the constitutional provision include, critically, giving the Auditor-General the opportunity under article 187(7)(b) to disallow payments found to be contrary to law and then to surcharge (1) ‘any expenditure disallowed upon the person responsible for incurring or authorising the expenditure,’ and/or (2) ‘the amount of any loss or deficiency, upon any person by whose negligence or misconduct the loss or deficiency has been incurred.’
We therefore urge the Council of State to seize the initiative and send its advice to the President forthwith. We also urge the President to revoke the appointment and mandate of the private audit firm, and to comply with article 187 on the matter. We finally urge the Auditor-General that if the Council of State and/or the President fail(s), neglect(s) or refuse(s) to comply with article 187, the Auditor-General should commence and conduct the special audit on his own motion as he is empowered to do under section 16 of the Audit Service Act.
Strategic Mobilisation Ghana Ltd (SML), in a resolute stance, has asserted its confidence in the forthcoming audit, mandated for its contract with the Ghana Revenue Authority (GRA) and the Finance Ministry.
SML has expressed the belief that the investigation will ultimately validate the integrity of the deal.
SML is optimistic that the upcoming report from KPMG, the firm entrusted with conducting the audit, will showcase the contract’s integrity in safeguarding the state’s revenue.
In a press statement issued on Wednesday, January 3, SML welcomed the audit directive and assured full compliance.
The statement emphasised the company’s anticipation of the audit proving the legitimacy and efficacy of its dealings with the GRA and the Ministry of Finance.
“We welcome the directive and the decision to appoint KPMG to conduct an immediate audit of the contract.
“SML awaits the results of the audit, as it will help establish a clear and accurate picture of our operations. We remain resolute in upholding the highest business standards and welcome the scrutiny that this audit would bring.”
“We are confident that the findings will confirm the integrity of our collaboration with GRA and the Ministry of Finance and provide ample evidence of the value we provide citizens,” SML said.
The audit was ordered by President Akufo-Addo on Tuesday, January 2, with KPMG appointed to conduct the audit within a two-week timeframe.
Specific terms of reference for the audit were outlined in a press statement from the Presidency issued by Communications Director Eugene Arhin.
In December 2023, The Fourth Estate published an investigative piece implicating Strategic Mobilisation Ghana Ltd. (SML), the Ghana Revenue Authority (GRA), and the Ministry of Finance.
The report accused GRA of awarding SML a 10-year contract, generating $100 million annually, and raised concerns about alleged underhand dealings.
Following the report, SML refuted claims of a 10-year contract, asserting that it was awarded a 5-year contract instead. Additionally, SML denied allegations of receiving $100 million annually from its contract.
On Wednesday, December 20, 2023, the Ghana Revenue Authority issued a statement affirming that its board and management had followed the correct processes in procuring the services of SML.
The situation continues to unfold, with conflicting statements from the involved parties. We will continue to monitor and report on further developments.
Honorary Vice President of IMANI-Africa, Bright Simons, has called on KPMG, a global professional services firm, to reconsider and reject President Akufo-Addo’s directive to audit the SML/GRA contract.
The directive, issued by the President, seeks an extensive examination of the contract between the Strategic Mobilization Limited (SML) and the Ghana Revenue Authority (GRA).
Simmons, known for his unwavering commitment to good governance and ethical business practices, contends that the audit may compromise the independence and integrity of KPMG, given the political sensitivity surrounding the contract.
In a Tweet made on January 2, 2023, Mr Simons said: “KPMG’s practice oversight bosses should prudently preserve the firm’s reputation & drop this assignment. This issue is a hot political potato right now. The nature of the allegations requires an IN-DEPTH look by state bodies with the RIGHT POWERS & INDEPENDENCE. KPMG has neither.”
His comments follow President Akufo-Addo’s directive to the KPMG to carry out a full blown audit into the contract.
The President’s directive also follows an investigative piece by the Fourth Estate on what it terms as a shady deal between the SML Ghana and the Ghana Revenue Authority (GRA).
The President’s action comes after an investigation by The Fourth Estate revealed that SML had been awarded contracts that entitles the company to more than $100 million every year.
The company admitted it was not performing the advertised services that claimed to tackle under-reporting, diversion and dilution when the investigative journalists confronted it with evidence. It has since deleted those claims from its website.
The Managing Director of SML, Christian Tetteh Sottie, also admitted that the company’s claim that its services had saved Ghana GHS3 billion was false.
The directive reflects a commitment to ensuring transparency and accountability in the execution of the GRA’s contractual agreement with SML.
“The President of the Republic, Nana Addo Dankwa Akufo-Addo, has appointed KPMG, the reputable Audit, Tax and Advisory Services firm, to conduct an immediate audit into the transaction between the Ghana Revenue Authority (GRA) and Strategic Mobilisation Ghana Ltd (SML), a contract which was entered into to enhance revenue assurance in the downstream petroleum sector, the upstream petroleum production and minerals and metals resources value chain,” an excerpt of the release said.
President Akufo-Addo further instructed the Ghana Revenue Authority (GRA) and the Ministry of Finance to adhere to his directive and furnish KPMG with all necessary documentation for the upcoming audit.
Minority Leader, Dr. Cassiel Ato Forson, has declared that President Akufo-Addo’s directive for the Ghana Revenue Authority (GRA) and Strategic Mobilisation Limited (SML) to suspend their contract comes belatedly.
Dr Forson’s remarks add a sharp perspective to the unfolding developments, suggesting a sense of urgency that has long been overdue in addressing the contentious contract between GRA and SML.
This development follows President Akufo-Addo’s recent decision to appoint KPMG for an urgent audit of the transaction between the Ghana Revenue Authority (GRA) and Strategic Mobilisation Limited (SML). The move underscores a heightened commitment to scrutinizing the intricacies of the GRA-SML transaction, adding a layer of urgency to the unfolding situation.
A contractual agreement aimed at bolstering revenue assurance within the downstream petroleum sector, upstream petroleum production, and the value chain of minerals and metals resources.
President Akufo-Addo has set a tight two-week deadline for KPMG to fulfill the assigned task, directing the audit firm to submit pertinent recommendations upon completion. This decisive move signals a swift and time-sensitive approach to address the ongoing situation.
In a concise statement, the Minority leader characterized the President’s action as an endeavor to whitewash the contract under the guise of an audit.
“This whitewashing attempt by the President in the name of an audit will not dissuade Parliament from looking into this matter to stop the siphoning of state resources into the private pockets of government officials and their crony business partners,” Dr. Ato Forson stated.
Below is the statement by the Minority Leader Dr Ato Forson
President Akufo-Addo’s appointment of KPMG to audit the so-called revenue assurance agreement between Ghana Revenue Authority (GRA) and Strategic Mobilisation Limited (SML) has come too late in the day.
Parliament has already directed the Finance Committee to audit the infamous agreement and the Committee is actively seized of the matter.
The President, who should have led this fight in the wake of this scandal, is playing catch up since Parliament has also directed GRA to suspend all payments to SML.
This whitewashing attempt by the President in the name of an audit will not dissuade Parliament from looking into this matter to stop the siphoning of state resources into the private pockets of government officials and their crony business partners.
President Akufo-Addo has taken swift action by ordering the abrupt suspension of a crucial contract between the Ministry of Finance and Ghana Revenue Authority (GRA) and Strategic Mobilisation Ghana Limited (SML).
The suspended contract pertains to the vital task of revenue assurance services in both the downstream and upstream petroleum sectors, as well as the mining sector. The unexpected development marks a significant shift in the administration’s approach, raising questions and sparking intrigue about the motivations behind this abrupt decision.
Additionally, the President, in a bold step towards transparency and accountability, has mandated the renowned audit firm, KPMG, to conduct a thorough investigation into the services provided by Strategic Mobilisation Ghana Limited (SML) to the Ghana Revenue Authority (GRA).
The president’s directive includes a stringent timeline, with KPMG expected to submit its comprehensive report within a tight two-week period. This unexpected move signals a commitment to scrutinize and evaluate the intricacies of the contracted services, adding a layer of urgency to the unfolding narrative surrounding the suspension of the GRA-SML contract.
According to a statement signed by the communication’s director at the presidency, Eugene Arhin, President Akufo-Addo “also directed the Ministry of Finance and the Ghana Revenue Authority to suspend the performance contract pending the submission of the audit report, including any payments presently envisaged under its terms.”
KPMG has also been directed to “assess the appropriateness of the contract methodology, verifying compliance with legal standards and industry practices in the procurement process for the selection of SML.”
The president also tasked KPMG to, among others “evaluate the value benefit that SML has so far offered to the GRA through this engagement.”
In response to the investigative documentary titled ‘The GH¢3 Billion Lie’ by investigative journalist, Manasseh Azure, the Technical Assistant to the Managing Director of Strategic Mobilisation Ghana Limited (SML), Richard Marfo, has leveled allegations against the journalist.
Mr Marfo claims that Manasseh deliberately fabricated the contract details presented in the exposé.
Specifically, Mr Marfo emphasized that Manasseh misrepresented key aspects of the contract, particularly the duration, asserting that the actual contract was for five years, not the ten years reported in the documentary.
He accused Manasseh of selectively redacting and manipulating information to create a false narrative, questioning the accuracy and credibility of the investigative piece.
In a categorical denial, SML refuted the claims made in the documentary, challenging the media outfit to produce any contract evidence supporting the allegations.
“Manasseh has had PR works in the public. But we also want to use a little time to clarify some things. The first thing I want to put out there is the context in which Manassseh asks the questions as if he is doing a documentary within the downstream and those are the answers he had.
“The next is that the contract in question was 10 years. What Manasseh did has done a big and deliberate disservice to SML. A contract of five years, he went to the page where it stated 10 years, redacted whatever is in there. You can get this on section 3.1 of the contrat. Look at it carefully even the word contractor, he wrote there, contract. He put this thing out there and claims that that is the contract,” he said this on Joy News programme, which was monitored by GhanaWeb.
“…I am asking, where is that source coming from? We are claiming that Manasseh put those words together and at the right times, we will seek legal redress on those matters.”
Additionally, SML rejected the assertion of receiving $100 million annually from its contract, dismissing these claims as baseless and purely speculative.
Mr Marfo raised questions about the reliability of Manasseh’s sources, indicating the company’s intention to pursue legal action to address the alleged misrepresentation.
The core controversy revolves around the documentary’s claims regarding the Ministry of Finance awarding a substantial contract to SML for monitoring Upstream Petroleum Production and auditing the value chain of Minerals and Metals Resources.
The investigative piece raised concerns about SML’s purported lack of experience in the petroleum industry and questioned payments for services not rendered.
The Finance Committee of Parliament has recommended the suspension of all payments related to the government’s contract with SML starting from the beginning of next year.
This decision comes as part of a broader move to conduct a thorough parliamentary probe into the said contract.
The committee asserts that, upon a comprehensive review of the contract, it has become apparent that parliamentary approval, in accordance with the Financial Management Act, is necessary.
Consequently, the Ghana Revenue Authority (GRA) is expected to be duly notified about this statutory requirement.
This development unfolded during the deliberations on the budget approval concerning various government obligations for the upcoming year, 2024.
Speaking on behalf of the Minority, Dr. Cassiel Ato Forson addressed journalists regarding the contract, stating, “As part of the report, the Parliament of the Republic of Ghana has resolved that the Ghana Revenue Authority (GRA) must immediately stop all payments to SML beginning January 1, 2024.”
He continued, “Again, parliament resolves that GRA must be aware that the contract that the Ministry of Finance has with SML constitutes a multi-year commitment and section 33 of the Public Financial Management Act is clear on the matter that all multi-year commitments must be presented to parliament for consideration and approval.”
Highlighting the current status of the contract, Dr. Ato Forson emphasized, “So the contract in its current shape is not valid and must come to Parliament for approval. It is also important to note that the same Finance Committee working with Parliament has resolved to initiate a probe into the SML. I urge the Committee of Finance to conduct this probe diligently and in a manner that will show transparency.”
Parliament’s Finance Committee has announced its decision to investigate Strategic Mobilisation Ghana Ltd (SML) over allegations surrounding a purported 10-year contract with the Finance Ministry during Ken Ofori-Atta’s tenure.
Ranking Member on the Finance Committee, Dr Cassiel Ato Forson, disclosed this information to the media on Friday, December 22.
“It is also important to note that the same Finance Committee working with parliament has resolved to initiate a probe into the SML. I urge the Committee of Finance to conduct this probe diligently and in a manner that will show transparency,” Minority Leader, Dr Cassiel Ato Forson said.
A Fourth Estate report has raised concerns about the legitimacy of a contract, indicating that Finance Minister Ken Ofori-Atta has expanded it, potentially costing the state $100 million over the next decade.
The contract assigns Strategic Mobilisation Ghana Limited (SML) the responsibility of monitoring and reporting fuel product diversion, dilution, and general noncompliance in the petroleum industry, tasks previously handled by the National Petroleum Authority (NPA).
Strategic Mobilisation Ghana Limited (SML) has issued a response to allegations surrounding a purported 10-year contract with the Finance Ministry during Ken Ofori-Atta’s tenure.
The company contested the claims made in “The Fourth Estate” documentary, asserting that it contains misrepresentations and false information.
In a press release from its Public Relations Unit on Tuesday, December 19, SML clarified that its contractual agreement with the Finance Ministry and the Ghana Revenue Authority (GRA) spans 5 years, contrary to the reported 10 years. Additionally, the company denied the assertion that it annually receives a substantial $100 million 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.”
Meanwhile, the Finance Committee of Parliament has proposed a suspension of all payments associated with the government’s contract with Strategic Mobilisation Ghana Ltd (SML) starting next year.
This recommendation is based on the need for a parliamentary investigation into the said contract.
According to the committee, after a thorough review of the contract, it was determined that Parliamentary approval is necessary in accordance with the Financial Management Act. Consequently, the committee deems it essential to notify the Ghana Revenue Authority (GRA) about this statutory requirement.
This development came to light during a debate on the approval of the budget for other government obligations in the year 2024.
Minority Leader, Dr Cassiel Ato Forson speaking to journalists on the deal said “As part of the report the parliament of the Republic of Ghana has resolved that the Ghana Revenue Authority (GRA) must immediately stop all payments to SML beginning January 1, 2024.
“Again, parliament resolves that GRA must be aware that the contract that the Ministry of Finance has with SML constitutes a multi-year commitment and section 33 of the Public Financial Management Act is clear on the matter that all multi-year commitments must be presented to parliament for consideration and approval.”
“So the contract in its current shape is not valid and must come to parliament for approval,” he said.
The Finance Committee of Parliament has proposed a suspension of all payments associated with the government’s contract with Strategic Mobilisation Ghana Ltd (SML) starting next year.
This recommendation is based on the need for a parliamentary investigation into the said contract.
According to the committee, after a thorough review of the contract, it was determined that Parliamentary approval is necessary in accordance with the Financial Management Act. Consequently, the committee deems it essential to notify the Ghana Revenue Authority (GRA) about this statutory requirement.
This development came to light during a debate on the approval of the budget for other government obligations in the year 2024.
Minority Leader, Dr Cassiel Ato Forson speaking to journalists on the deal said “As part of the report the parliament of the Republic of Ghana has resolved that the Ghana Revenue Authority (GRA) must immediately stop all payments to SML beginning January 1, 2024.
“Again, parliament resolves that GRA must be aware that the contract that the Ministry of Finance has with SML constitutes a multi-year commitment and section 33 of the Public Financial Management Act is clear on the matter that all multi-year commitments must be presented to parliament for consideration and approval.”
“So the contract in its current shape is not valid and must come to parliament for approval. It is also important to note that the same Finance Committee working with parliament has resolved to initiate a probe into the SML. I urge the Committee of Finance to conduct this probe diligently and in a manner that will show transparency.”
The Founding Editor-In-Chief of the Fourth Estate, Manasseh Azure Awuni, has raised questions about the value additions provided by Strategic Mobilization Ghana Limited (SML) to the upstream petroleum and gold production sectors.
The Ghana Revenue Authority (GRA) in a statement that the consolidated contract gives SML more than $100 million a year noting that “By implication, if there is no value addition, SML is not paid.”
However, Manasseh Azure Awuni countered this claim, asserting that, based on the contract extended by the Finance Ministry, SML is not remunerated for value addition.
He clarified that SML is expected to be paid as long as production occurs, irrespective of any value addition to the petroleum upstream and gold sectors.
In a Twitter post on December 20, Manasseh wrote: “The GRA has made a major false claim in its press statement. On the consolidated contract that gives SML more than 100 Million US Dollars a year, the GRA said: “By implication, if there is no value addition, SML is not paid.” In the contract, however, SML is not expected to add value to the upstream and gold sectors. It will be paid as long as production takes place, as evidenced in the attached contracts. SML will receive 0.75$ PER BARREL of the 160,000 barrels of oil Ghana produces a day. SML will also receive 0.75% of the total gold production.”
The journalist further noted that using 2022 gold production figures, SML will be making about $50 million a year from the gold production alone.
“The contract says the company should monitor, so what value addition is the GRA talking about?” he further quizzed.
Meanwhile, GRA has refuted the claim that a 10-year contract has been awarded to SML. The GRA says the Finance Ministry signed a 5-year contract.
In response, Manasseh said “Granted that this is true, SML will still be making more than $100 Million a year for the next 5 years, if you add its earnings in the downstream sector.”
He added that the only time SML will not make money is when Ghana stops the production of oil or gold.
The GRA has made a major false claim in its press statement. On the consolidated contract that gives SML more than 100 Million US Dollars a year, the GRA said: “By implication, if there is no value addition, SML is not paid.” In the contract, however, SML is not expected to… pic.twitter.com/SNRK81NWcW
The Founding Editor-In-Chief of the Fourth Estate, Manasseh Azure Awuni, has raised questions about the value additions provided by Strategic Mobilization Ghana Limited (SML) to the upstream petroleum and gold production sectors.
The Ghana Revenue Authority (GRA) in a statement that the consolidated contract gives SML more than $100 million a year noting that “By implication, if there is no value addition, SML is not paid.”
However, Manasseh Azure Awuni countered this claim, asserting that, based on the contract extended by the Finance Ministry, SML is not remunerated for value addition.
He clarified that SML is expected to be paid as long as production occurs, irrespective of any value addition to the petroleum upstream and gold sectors.
In a Twitter post on December 20, Manasseh wrote: “The GRA has made a major false claim in its press statement. On the consolidated contract that gives SML more than 100 Million US Dollars a year, the GRA said: “By implication, if there is no value addition, SML is not paid.” In the contract, however, SML is not expected to add value to the upstream and gold sectors. It will be paid as long as production takes place, as evidenced in the attached contracts. SML will receive 0.75$ PER BARREL of the 160,000 barrels of oil Ghana produces a day. SML will also receive 0.75% of the total gold production.”
The journalist further noted that using 2022 gold production figures, SML will be making about $50 million a year from the gold production alone.
“The contract says the company should monitor, so what value addition is the GRA talking about?” he further quizzed.
Meanwhile, GRA has refuted the claim that a 10-year contract has been awarded to SML. The GRA says the Finance Ministry signed a 5-year contract.
In response, Manasseh said “Granted that this is true, SML will still be making more than $100 Million a year for the next 5 years, if you add its earnings in the downstream sector.”
He added that the only time SML will not make money is when Ghana stops the production of oil or gold.
The GRA has made a major false claim in its press statement. On the consolidated contract that gives SML more than 100 Million US Dollars a year, the GRA said: “By implication, if there is no value addition, SML is not paid.” In the contract, however, SML is not expected to… pic.twitter.com/SNRK81NWcW
The Ghana Revenue Authority (GRA) has refuted the claims made by ‘The Fourth Estate’ that it granted a ‘questionable’ contract to Strategic Mobilization Ghana Limited (SML) for monitoring Upstream Petroleum Production and auditing the value chain of Minerals and Metals Resources.
In an official statement, the authority clarified that, in collaboration with the Ministry of Finance, it entered into a consolidated contract with SML to monitor and audit the Downstream Petroleum Sector in 2019, Upstream Petroleum Production in 2023, and the Minerals and Metals Resources Value Chain in 2023.
Contrary to the ten years mentioned by ‘The Fourth Estate,’ the GRA emphasized that the contract is designed to operate for five years.
“The new and consolidated contract which is for a term of five years and not ten years as alleged by the publication and was agreed upon based on the performance of SML in monitoring the downstream petroleum sector and the provision of instant reconciliation of real-time data in the sector”, the statement signed by the Communication And Public Affairs Department of the GRA said.
Describing the Performance of the Downstream Petroleum sector under the Assurance Contract, the GRA noted that prior to engaging SML, the authority relied on a manual system for measuring fuel in depots.
The GRA highlighted that using dipsticks for measurement was outdated and presented a risk to officers who had to climb a ladder to measure the fuel in the tankers.
“It was inefficient and prone to revenue leakages. Currently, oil deposited by the Bulk-Oil Distribution Companies in the depots is measured by SML with the aid of sensors installed on the depots (Red flow metres). During offloading from the depots, SML again measures all the various liftings of the Oil Marketing Companies (OMCs)”.
The GRA emphasized that all information is captured and reconciled with data from the Integrated Customs Management System (ICUMS) through the GRA petroleum unit.
The statement clarified that if there are discrepancies, Customs informs the Oil Marketing Companies (OMC) to enter a post-entry to correct any differences.
It highlighted that in the petroleum sector, SML provides additional independent data, apart from the Customs ICUMS data, capable of validating anomalies in quantities imported, discharged, and accounted for by way of taxes.
The GRA further explained that the revenue assurance exercises conducted by EY Ghana and later by the Revenue Assurance and Compliance Enforcement (RACE) of the Ministry of Finance confirmed systemic deficiencies in the accounting and collection of petroleum taxes between 2015 and 2020.
Strategic Mobilisation Ghana Limited (SML) has issued a response to allegations surrounding a purported 10-year contract with the Finance Ministry during Ken Ofori-Atta’s tenure.
The company contested the claims made in “The Fourth Estate” documentary, asserting that it contains misrepresentations and false information.
In a press release from its Public Relations Unit on Tuesday, December 19, SML clarified that its contractual agreement with the Finance Ministry and the Ghana Revenue Authority (GRA) spans 5 years, contrary to the reported 10 years. Additionally, the company denied the assertion that it annually receives a substantial $100 million 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.”
“Again, it’s NOT TRUE that SML takes $100 million annually from its contract. The contract, which is yet to be operationalized, per their projections leads them to that claim,” an excerpt of their statement said.
A Fourth Estate report has raised concerns about the legitimacy of a contract, indicating that Finance Minister Ken Ofori-Atta has expanded it, potentially costing the state $100 million over the next decade.
The contract assigns Strategic Mobilisation Ghana Limited (SML) the responsibility of monitoring and reporting fuel product diversion, dilution, and general noncompliance in the petroleum industry, tasks previously handled by the National Petroleum Authority (NPA).
In response to these revelations, the Minority in Parliament is urging a comprehensive parliamentary investigation into the government’s contract with SML. The objective is to ensure the protection of billions of cedis that could be at risk in the downstream petroleum sector.
Strategic Mobilisation Ghana Limited (SML), allegedly an extension of a timber company, is facing scrutiny over a GH₵ 3 billion contract from the Ghana Revenue Authority (GRA) for “revenue assurance” services in the downstream petroleum sector.
The Fourth Estate’s investigative report reveals that SML, despite lacking experience, was “handpicked for the contract through the single-source procurement method.”
“In 2019, when the GRA entered into an agreement with SML Ghana, Mr. Sottie was the Technical Advisor to the Commissioner General of the GRA. Mr. Sottie left his job as the Technical Advisor to the GRA Commissioner General in the same year to manage SML Ghana in 2020 when the company started implementing its contract with the GRA. The GRA has been the only customer of SML Ghana since its establishment, according to Mr. Sottie. This means at the time the company was handpicked for the contract through the single-source procurement method, it had no prior experience in the services it claimed to have expertise,” the report stated.
When questioned about SML’s history, Managing Director Christian Tetteh Sottie disclosed only that it was “an offshoot of a timber company” but reportedly refused to name the timber company.
Further investigation by The Fourth Estate revealed through online records that the timber company linked to SML is Evans Timbers Limited. Apparently, the CEO of SML, Evans Adusei, is also the CEO of Evans Timbers GH. Evans Adusei is the sole shareholder of SML, with Evans Adusei and his daughter, Esther Adusei, serving as directors. SML’s principal activities include general trading and services, import and export of general goods, and audit service activities.
It’s worth noting that Christian Tetteh Sottie, the current Managing Director of SML, was a Technical Advisor to the Commissioner General of the GRA in 2019 when the GRA entered into an agreement with SML. He later transitioned to managing SML in 2020 when the company began implementing its contract with the GRA.
With the GRA as the sole customer of SML Ghana since its establishment, concerns arise about the company’s qualifications for the contract.
The company allegedly falsely claimed on its website to address issues such as under-reporting, diversion, and dilution of fuel products, prompting skepticism from officials at the Petroleum Division of the GRA.
As seen on the fourth estate website
However, during The Fourth Estate’s investigation, Christian Sottie reportedly clarified that SML did not engage in checking underreporting or anomalies in the downstream sector, contradicting its website claims. The sudden disappearance of these claims from the company’s website further deepens the mystery surrounding SML’s operations.
An explosive investigative report by investigative journalist Manasseh Azure Awuni‘s The Fourth Estate, titled “THE GH₵ 3 BILLION LIE,” exposes startling revelations about Strategic Mobilisation Ghana Limited (SML).
Despite making wild claims of saving Ghanaian billions, SML continued to receive monthly payments of up to GH₵24 million from the government. The blockbuster report, released today on December 18, 2023, delves into a murky contract signed with the Ministry of Finance and the Ghana Revenue Authority (GRA).
The investigation, conducted by Evans Aziamor-Mensah, Adwoa Adobea-Owusu, and Manasseh Azure Awuni of The Fourth Estate, uncovers a trail of deceit involving false and unsubstantiated claims made by SML. The company’s dubious operations became the basis for substantial payments it received from the government, with indications that officials from the Ministry of Finance and GRA were aware of the false claims.
The Fourth Estate team confronted SML’s management with the findings, leading to the sudden disappearance of major services claimed by the company from its website. This action raised further questions about the legitimacy of SML’s dealings with the government.
The investigation also sheds light on an outrageous deal initiated by Finance Minister Ken Ofori-Atta, entitling SML to over $100 million annually for the next decade. The report highlights a 2019 contract signed between the Government of Ghana and SML, questioning its necessity amid pre-existing measures introduced in 2018 to curb losses in the downstream petroleum sector.
Key revelations include the questionable procurement process, where SML, led by Managing Director Christian Tetteh Sottie, was handpicked through a single-source method despite lacking prior experience in the services it claimed to provide. Procurement expert Kobina Ata-Bedu raises concerns about potential breaches of Ghana’s procurement laws.
The report dismantles SML’s false claims of resolving issues such as underreporting, diversion, and dilution of fuel products in the petroleum industry. The company’s website displayed misleading information that was later removed after the Fourth Estate’s investigation.
Christian Tetteh Sottie, the Managing Director of SML, admitted that the company did not engage in activities related to checking underreporting or anomalies in the downstream sector, contradicting its earlier claims. The GRA officials, present during the confrontation, expressed shock at the services SML claimed to provide.
Despite the revelations, SML’s Managing Director denied knowledge of the GH₵3 billion savings claim, attributing it to a mistake made by an IT Systems Engineer during a presentation to the GRA. The Fourth Estate’s persistent questioning forced admissions of discrepancies, prompting SML to remove the false claims from its website.
The Minister of Finance, Ken Ofori-Atta, who initially lauded SML for saving billions, now faces scrutiny as evidence suggests financial mismanagement. Despite unanswered Right to Information requests, sources close to the Ministry of Finance reveal monthly payments of up to GH₵24 million to SML.
The shocking details unveiled in this report raise serious questions about the transparency and legitimacy of government contracts, urging further investigation into SML’s dealings and the accountability of public funds.
The Minority caucus in Parliament is urging the immediate suspension of a 10-year contract between the Finance Ministry and Strategic Mobilisation Ghana Limited (SML) for revenue assurance services.
Ranking Member on the Mines and Energy Committee of Parliament, John Jinapor, characterized the contract as a “rip-off” and a “burden on taxpayers” designed to enrich “greedy politicians.”
He has called for its suspension until a probe by the minority caucus can investigate potential mismanagement.
“We do not believe that there is value for money, this contract is a rip-off, this contract only ends up filling the pockets of greedy politicians and individuals.
“We cannot allow the taxpayer to be burdened with such unnecessary contracts that only go a long way to fill the pockets of individuals, so we would advise, that immediately that contract should be suspended pending a parliamentary investigation. When we go into it and find out that all those allegations are true, we will ensure that this contract is abrogated.”
Mr. Jinapor also expressed concerns about a possible delay in negotiations with the International Monetary Fund (IMF) due to Ghana’s failure to service its external debts.
There are reports indicating that the IMF board meeting to consider the second tranche of a crucial $3 billion credit facility has been postponed until January 11, 2024. Jinapor cautioned that this delay could seriously jeopardize the hard-won economic gains that the government has achieved.
The Fourth Estate, in its recent investigation, has uncovered rot in a contract between the Finance Ministry and Strategic Mobilisation Ghana Limited (SML), and how the company failed to save Ghana over GHc3 billion in revenue as it had earlier claimed.
Strategic Mobilisation Ghana Limited in 2020 started revenue assurance services to the government of Ghana.
The GRA and the Ministry of Finance contracted SML to monitor the volumes of petroleum products lifted. However, the GRA told The Fourth Estate that the figures SML churned out as its monitoring of volumes were not the ones GRA uses to calculate petroleum taxes or revenue for the state. The GRA uses figures from the loading gantries, which the authority was using even before SML was contracted.
In the first of this series, The Fourth Estate’s Evans Aziamor-Mensah, Adwoa Adobea-Owusu and Manasseh Azure Awuni revealed that Strategic Mobilisation Ghana Limited (SML), which started revenue assurance services to the government of Ghana in 2020 had made a number of false claims.
The company claimed in February 2023 that it had saved Ghana over GHc3 billion in revenue that would have been lost to the state but for its services in the contract it signed with the Ministry of Finance and the Ghana Revenue Authority (GRA).
The investigation found this claim to be completely false. The Managing Director of SML, Christian Tetteh Sottie, claimed he did not know about the figure when The Fourth Estate confronted him with counter evidence. He said the media, including the state-owned Daily Graphic, had taken a presentation SML made to the GRA board out of context and reported the wrong information. He said SML had called the journalists to draw their attention to the supposed error.
When asked why the story of saving Ghana GHc3 billion was still on the website of SML the morning of the interview with The Fourth Estate, in July 2023, he said, “I don’t of any website matter(sic).”
When asked why the story of saving Ghana GHc3 billion was still on the website of SML the morning of the interview with The Fourth Estate, in July 2023, he said, “I don’t of any website matter(sic).”
SML admitted its false claims and deleted them from the website of SML shortly after our interview
The company had also claimed that its services had stopped “under-reporting, diversion and dilution of fuel products and general non-compliance in the petroleum industry sector.”
When The Fourth Estate confronted the company with evidence that it did not perform any of those services that tackled those problems, which were the causes of revenue leakages in the downstream petroleum sector, SML admitted its claims were false and deleted them from the website of SML that same day.
SML also admitted its ultrasound metres at the nation’s fuel depots were less accurate than the metres of the loading gantries at the depots, which are calibrated and certified by the Ghana Standards Authority every six months.
The GRA and the Ministry of Finance contracted SML to monitor the volumes of petroleum products lifted. However, the GRA told The Fourth Estate that the figures SML churned out as its monitoring of volumes were not the ones GRA uses to calculate petroleum taxes or revenue for the state. The GRA uses figures from the loading gantries, which the authority was using even before SML was contracted.
The Managing Director of SML, Christian Sottie, denied knowledge of the GHc3 billion savings and claimed the media misreported SML. But the story is still on the website of SML.
SML also confirmed to The Fourth Estate that it had never detected any case of under-declaration since it started its monitoring services for the GRA over three years ago.
Apart from the false claims, SML does not tackle any of the problems identified as causing revenue losses in the downstream sector, a fact SML and government officials admitted when we interviewed them.
This notwithstanding, the Ministry of Finance, in June 2023, instructed the GRA to expand the scope of SML Ghana’s work.
A Ministry of Finance letter sighted by The Fourth Estate said the “Honourable Minister [Ken Ofori-Atta] has determined that there is the need to monitor the production and shipment of oil and gold out of the country.
“To this end, he will like to expand the Revenue Assurance work being performed by SML to include upstream oil drilling by the production companies and the gold mining companies,” the letter dated June 22, 2023, stated.
The Ministry of Finance letter on the expansion of SML Contracts to cover oil and gold production in Ghana
Sources close to the Ministry and SML Ghana have confirmed the contract has been signed and stakeholders in the mining industry have been contacted in writing to help SML operationalise the terms of the contract.
Last week, representatives from the GRA and SML met the Ghana Chamber of Mines to discuss the execution of the contract. The Fourth Estate’s sources familiar with discussions at the meeting said SML invited the Ghana Chamber of Mines to visit the company to inspect the setup it is putting in place to implement the new contract. The Chamber is to visit.
Per the terms of this new contract, the government will pay SML US$0.75 for any barrel of oil produced in Ghana.
Ghana currently produces between 160,000 to 170,000 barrels of oil per day. The Pecan field project is expected to add 80,000 barrels per day in a year, a Deputy Minister of Energy, Andrew Mercer, recently told Reuters.
SML’s share of US$0.75 per barrel a day means the company will make at least US$120,000 per day from the 160,000 barrels per day.
The contract also mandates the state to pay SML Ghana 0.75 per cent of the total amount of gold that is produced and monitored in Ghana. Ghana is currently the largest producer of gold in Africa, beating South Africa with 3.7 million ounces of Gold in 2022.
Using the 2022 production figures to estimate SML’s earnings, the company’s 0.75% share of 3.7 million ounces at a global price of US$1,800 per ounce (as contained in the Finance Minister’s 2024 budget statement) will amount to US$50 million from the gold sector alone.
The Contract spells out what should be paid to SML under the gold and oil upstream petroleum sectors. Together with the downstream sector, the company will be paid over $100 million a year
Together with the downstream and upstream petroleum sectors, SML Ghana will be paid more than US$100 million by the government of Ghana through the “revenue assurance” contracts.
This money is more than the amount allocated to 19 out of the 27 ministries in the 2024 budget of the Republic of Ghana by the Ministry of Finance.
The amount due SML per this contract is more than the annual revenue from many taxes, including the controversial electronic transaction tax (E-Levy).
The contract term is 10 years which means the company would have rake-in 1 billion dollars in 2032
“A typical create loot and share”, a mining expert.
A mining expert who spoke to The Fourth Estate on condition of anonymity described the engagement of SML to monitor gold production as a “typical create, loot, and share” scheme to plunder the resources of the state.
The source said SML has no role in the mining sector and won’t perform any function that is not already in place to monitor and assure revenue for the government.
“To put it simply, what we do here is that we crash rocks in search of gold. After crashing, we take the rocks that have gold particles to what we call the Gold Room to extract the gold,” the source explained.
“In the gold room of every mining company, we have officials of the Ghana Revenue Authority to protect the government’s interest and calculate taxes on whatever we produce,” the source continued.
The source further explained that aside from the GRA officials, the Gold Room also has officials from the Precious Minerals Marketing Company (PMMC), the state institution certified to grade, assay, value and process precious minerals.
“The PMMC is the government’s assayer, so they take samples of the gold we produce to their labs in Accra to test and report of the percentage of actual gold in the bars.”
The source said the mining companies in Ghana refine their gold outside the country and reports from the gold refineries abroad are returned to Ghana for reconciliation with the PMMC report.
“For instance, if the PMMC’s test report says a bar has 97% gold and 3% silver, and the refinery report says it has 94% gold and the rest are of silver and other metals, the report is reconciled.”
The source explained that all the gold that leaves the mines is airlifted by helicopters with security protection to the Kotoka International Airport in Accra for onward export.
“Between the mines and the airport, anything could happen, so we have Customs officials in every helicopter that lifts the gold from the mines to Kotoka, where they hand over to their superiors for the paperwork and export.
“So, what is SML coming to do?” the source asked. “Are they coming to do the work of PMMC or GRA?”
The Petroleum Commission says it is not aware of the contract with SML
The regulator of the upstream sector, the Petroleum Commission, has told The Fourth Estate that it has no knowledge of the contract with SML to monitor petroleum production in Ghana. It also said in a response to a right to information request that it has no report of leakages in the sector, a reason SML was contracted to monitor.
The Commission, according to its official website, was established by “an Act of Parliament, 2011 (Act 821) as a result of hydrocarbon discoveries in commercial quantities, to regulate and manage the utilisation of petroleum resources and, coordinate the policies in the upstream petroleum sector.”
Executive Director for Africa Centre for Energy Policy, Benjamin Boakye
The Executive Director of the Africa Centre for Energy Policy (ACEP), Benjamin Boakye, told The Fourth Estate that, SML’s role is needless and would result in loss of revenue to Ghana without adding value to the process.
“Recently, Tullow installed new metering systems that will be calibrated by the Standards Authority. Is the Finance Ministry saying that those metres are wrong?,” he asked.
