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Five prominent Non-Governmental Organisations (NGOs) and an individual, Priscilla Enyonam Abotsi, have taken legal action against the government to recover to the state over GHS 1billion paid to Strategic Mobilisation Limited (SML).
The NGOs – Media Foundation for West Africa (MFWA), Centre for Democratic Development (CDD-Ghana), Africa Centre for Energy Policy (ACEP), Ghana Anti-Corruption Coalition (GACC) and Human Rights and Governance Centre – are challenging the legality of the over GHS1billion payment to SML.
In seeking accountability for the use of public funds, the six parties contend in a suit filed at the Accra High Court that SML’s failure “to register in the Public Procurement Authority’s (PPA) supplier database is contrary to section 40 (7) of Public Procurement Regulations, 2022 (L.I. 2466).”
They further argue that the seven service contracts between the Ghana Revenue Authority (GRA) and SML, “through single source procurement method is contrary to Section 40 of the Public Procurement Act, 2003 (Act 663) as amended, because none of the conditions under section 40 of Act 663 as amended, was satisfied.”
The service contracts are Transaction Audit Services, Measurement Audit of Downstream Petroleum Products, Consolidation Services Agreement (Transaction Audit and External Verification Services), External Price Verification Services, Addendum to Measurement Audit for Downstream Petroleum Products Agreement, Consolidation of the first consolidation contract and downstream petroleum audit contract and extension of the scope of SML’s services and Contract Extension.
The defendants are SML, GRA, Kenneth Nana Yaw Ofori-Atta (former Minister of Finance) and the Attorney-General respectively.
The filing of the suit comes in the wake of the release of the report of an audit, commissioned by President Nana Akufo-Addo, into the contractual relationship between the GRA and SML. The audit found some anomalies in the contract and recommended some changes.
In an interview with Citi News, Sulemana Braimah, the Executive Director of the MFWA, said the legal action is driven by the commitment to safeguard the resources of the state and is nothing personal.
“I think that, if anything at all, we would say that it’s based on some of the findings of the KPMG report that required that actions be taken to ensure that what is due to the state comes back to the state.
“It has nothing to do with being satisfied with the KPMG report. If anything at all, that gave us a little more into what we thought were the wrong things that were done in relation to the contract,” Mr Braimah said.
“We are a country that is supposed to be governed by law and laws are not made for the beauty of having laws. Laws are made so that things will be done properly. Laws are made so that there will be equity, there will be fairness, there will be justness and there be accountability and in our view the award of the SML contract and the delivery of the contract had in our view a number of things that are at variance with the laws of our land particularly and specifically relating to public procurement laws regarding parliamentary oversight and so on.
“Essentially, we are saying if these laws were breached, the right things must be done. If we’ve lost money as a result of these breaches, the money must be retrieved and sent back to the state. So essentially, we are saying the laws were not followed, monies have been paid, and those monies must be brought back to the state,” he added.
Background
Earlier this year, President Akufo-Addo, following an expose’ by The Fourth Estate and the attendant public outcry, directed audit firm KPMG to conduct an audit of the transaction between SML and GRA.
The KPMG audit report revealed significant irregularities, including the failure of the GRA to secure the necessary approvals from the PPA and Parliament before entering into the contracts with SML.
For example, the audit found that the flow meters at various depots used to calculate volumes were faulty. The meters installed by SML on their pipes contained water, leading to inaccurate data that could not be relied upon for tax purposes.
In response to the KPMG findings, the President directed the GRA to conduct comprehensive technical needs and value-for-money assessments before implementation of the upstream petroleum and minerals revenue assurance contracts with SML.
He also directed the GRA to consider terminating the contract for transaction audit and external price verification services, which according to KPMG, has only been partially fulfilled by SML.
