It has now emerged that the Mahama-led National Democratic Congress (NDC) government is not only borrowing haphazardly from the international capital market, but the local companies and financial institutions as well.
One of such companies is the Ghana National Petroleum Company (GNPC), which has become the cash cow for the government. According to the 2014 Auditor General Report, the government has borrowed various sums of money totaling US$152,537,354.
According to the Auditor General’s report on the public accounts of Ghana; public boards, corporations and other statutory institutions for the year ended December 31, 2014, the Finance Ministry owed GNPC an amount of fifty million American dollars.
The report stated; “We observed that the Ministry of Finance owed the Corporation an amount of US$50,000,000 advanced to it in December, 2013 for three months. The amount had not been paid as at the time of our audit. “Also, an amount of US$102,537,354 representing the net effect of assets and liabilities transferred to the state has been outstanding since 2010.
“GNPC’s funds for other developments have been unduly locked up by the government. This was as a result of Government’s inability to settle its indebtedness to GNPC and also management’s inability to pursue government for the amount”, the report emphasized.
Two other local companies namely; Tema Oil Refinery (TOR) and Ghana Gas Company together owed GNPC a total of US$92,112,277 as at December31, 2013. The breakdown of the above figure is as follows; Tema Oil Refinery (TOR)-US$58,404,874 and Ghana Gas Company-US$33,707,403.
Continuing, the report explained; “Following an impairment review the amount owed by TOR had been reviewed down to US$52,348,305. The other receivables are fully recoverable; however, the Corporation does not hold any collateral over these balances.”
Interestingly, however, GNPC has been contributing to the above mentioned companies, even though it has no equity interest, and more so, it was not benefitting from it financially. The Saltpond Offshore Company Limited (SOPCL), which is an associate company of GNPC also owes the Corporation an amount of US$22.76 million.
“The GNPC books as at December 31, 2013 show balances due from SOPCL (an associate company in which the Corporation has a 45% shareholding) of US$22.76 million (GHC49.22 million). An impairment review has written down the recoverable amount to US$5.99 million (GHC12.97 million)”, the report narrated.
Touching on the income of the petroleum company, the report observed that there was an increase of 47.1 percent of the 2012 figure, which stood at GHC1,062,615,461 to GHC1,563,498,708 in 2013. “There was an increase in total income of 47.1% from GHC1,062,615,461 in 2012 to GHC1,563,498,708 in 2013. This was mainly attributed to increases in sales and non-trading income.
“Total expenditure also went up from GHC1,018,075,825 in 2012 to GHC1,493,167,502 in 2013, a rise of 46.7%, mainly resulting from increases in Government 60% share, operating costs, petroleum project expenditure, finance charges and administrative and general expenses,” the report continued.
The report explained further that the non-current assets rose by 6.1 % from GHC421,502,276 in 2012 to GHC447,074,574 in 2013, adding that was attributed to increase in petroleum projects, investments in joint venture and additions to property, plant and equipment.
Current assets also grew by 54.9 percent from GHC422,960,865 in 2012 to GHC655,234,192 in 2013, the report noted adding it was as a result of increases in debtors and short term investments.