We are working to retrieve debts owed by gov’t, SOEs – GNPC
The Ghana National Petroleum Corporation (GNPC) says plans are underway to reconcile its books with respect to gas payments in order to retrieve outstanding debts owed the company by the government and other state-owned enterprises.
According to the Auditor-General’s report for 2017, the government of Ghana and some state-owned enterprises owed the corporation GH₵778m as at 31st
December 2015.
Currently, there is no evidence of a repayment plan. Debts owed GNPC include GH₵102m by the government of Ghana, GH₵261m by the Ministry of Finance, GH₵198m by Tema Oil Refinery, and GH₵216m by the Ghana National
Gas Company.
Appearing before the Public Accounts Committee (PAC) hearing on Tuesday at Parliament House in Accra, the Deputy CEO of GNPC, Joseph Dadzie, indicated that the debts owed the company have affected its cash flow, which has
hampered operational activities.
He said the corporation has written to its debtors and is working The Private Enterprise Federation (PEF) wants regulatory agencies to be allowed to retain a significant portion of their user fee revenues to enable them to serve businesses
better.
Most regulatory agencies share their user fee revenues, also known as internally-generated funds (IGFs), with the central government based on approved sharing formulae, which vary depending on the agency.
Since 2017, the central government, through the passage of a law to regulate revenue earmarking, has sought to increase its share of user fee revenues in a
bid to improve budgetary flexibility.
According to the CEO of PEF, Nana Osei Bonsu, “PEF recommends that 60 per cent of user fees paid by business applicants are retained by the respective agencies for their operations to [help] administer timely processing of applications.”
Mr. Bonsu said this at the unveiling of the Ghana business with the Ministry of Finance to determine how the payments
would be made.
Mr. Dadzie also admitted in an interview with Business24 that the Ministry of Finance had made some payments to GNPC, but maintained that “there has to be a broader reconciliation of the payments and also amounts that are owed by
other parastatals to GNPC.”
On whether there could be a possibility of writing off some of the debts, he explained that the corporation does not have the
authority to write off debts.
Chairman of PAC James Klutse Avedzi urged GNPC to expedite action to retrieve monies owed it to ensure efficiency and profitability
in its operations.
A 2019 report by the Public Interest and Accountability Committee (PIAC), the oil revenue management watchdog, revealed that GNPC supplied US$334.6m
the worth of raw gas to the Ghana National Gas Company (GNGC), but no payment was received for the supplies.
“This is largely on account of VRA’s [Volta River Authority] inability to pay GNGC for the lean gas supplied.
Added to the outstanding balance of US$333.5m, this brings the total indebtedness
in respect of lean gas supplies to US$668.1m,” the report said.
The report added that despite the indebtedness, GNPC continues to provide guarantees for a range of state-owned enterprises (SOEs), amounting to US$645.5m in 2019.
“This is about double compared with the previous years’ and also outweighs the corporation’s total equity financing expenditure of US$164.79m for the period,” it said.