The Minority in Parliament has uncovered yet another clandestine attempt by the Akufo-Addo/Bawumia NPP government to borrow a staggering $431.5 million using GNPC without the approval of Parliament.
The Minority has sighted authoritative documents to the effect that this decision was taken at a recent meeting at the presidency, held at the instance of President Akufo-Addo and chaired by the President himself. The Chief of Staff, the Minister of Finance, Deputy Minister of Energy, Board Chairman and Chief Executive Officer of the GNPC were all present in the said meeting at which the President instructed GNPC to be borrow this amount from LukOil International Trading and Supply Company (LITASCO SA), with allocations as follows;
●US$155 million for the refinancing of LITASCO debt
●US$150 million to settle the debt owed by the Government of Ghana (GOG) to Karpower
●US$126.50 million to renew the Karpower bank guarantees.
The Minority is highly scandalised by this development which effectively is an attempt to side-step Parliament and violate the laws of Ghana. It would be recalled that before Parliament went on its recent recess, GNPC had table for Parliamentary approval a loan facility of $650 million as part of its Work Programme and Budget for 2023. The Parliamentary Committee on Mines and Energy subsequently considered this request and directed GNPC to submit the full terms of this loan agreement for consideration and approval in line with Article 181 of the 1992 Constitution.
Even before GNPC returns to Parliament with the detailed terms of this loan request, President Akufo-Addo has through an Executive fiat ordered GNPC to commit Ghana to yet another loan to the tune of $431.5 million, using oil from the TEN fields as collateral for over five(5) years. This loan is being contracted at an interest rate of SOFR 1 Month + Margin, and a structured fee of 2.5% flat rate.
Even more worrying for us in the Minority is the fact that this shady arrangement is being routed through the tainted and controversial SPV called Jubilee Oil Holdings Limited (JOHL), from which government intends to rely on as a source of repayment instead of relying on proceeds from the Government of Ghana. Not too long ago, Parliament had cause to query the Minister of Finance over his decision to lodge $100 million of Petroleum proceeds in this corrupt vehicle called JOHL, instead of the Petroleum Holding Fund as required under the Petroleum Revenue Management Act. It does appear that the Akufo-Addo/Bawumia government is bent on proceeding with this illegality.
Apart from the clear breach of the laws of Ghana regarding approval of such loan agreements, it is our contention that this whole arrangement will further hinder GNPC’s ability to obtain the needed funds to focus on its core mandate, such as continuing the reconnaissance works on the Voltain Basin Project and fulfilling its cash call obligations.
The Minority’s biggest concern of all is the fact that this agreement affects all participating interests held directly or indirectly by the Seller (Government of Ghana), including royalty entitlements. The arrangement further entitles the Buyer to substitute cargoes from other interests held by the Government of Ghana should production volumes from the TEN fields prove insufficient to meet the minimum quantity.
In light of the above concerns, the Minority hereby calls on Civil Society Organisations and all well-meaning Ghanaians to rise up and speak against yet another attempt by this Akufo-Addo/Bawumia NPP government to once again collateralise Ghana’s oil resources for their short-term expediency. We cannot allow this unbridled and reckless borrowing which has already brought Ghana’s economy to its knees to continue. In the coming days, the Minority in Parliament will be taking steps to haul the necessary government officials, including officials of the GNPC, to provide the necessary answers.
*John Abdulai Jinapor*
Ranking Member, Committee on Mines and Energy.