Energy ministry shields Akufo-Addo family’s complicity in oil deals
The Ministry of Energy, has opted to attack the Ranking Member on the Mines and Energy Committee, John Jinapor, claiming he is out with an “unfortunate aim of sullying the reputation of the President and some senior government officials over his directive to the Ghana National Petroleum Corporation (GNPC) to go into a re-financing arrangement with LITASCO.
The order by Nana Akufo-Addo, is to use the controversial Jubilee Oil Holdings Limited (JOHL) revenues to secure a substantial loan from LITASCO.
The Russian company; LITASCO heavily leans on the first family, and has always had Edward Akufo-Addo aka “Bumpty”, the President’s younger brother linked to it.
This loan is intended to address a long-standing debt accrued through the ruling family’s involvement in the oil business since 2017, and The Herald’s findings are that, the President is unwilling to seek parliamentary approval for the loan reported to be in the region of US$700 million.
The loan is supposed to be paid back with crude oil lifted from the Jubilee fields according to other documents cited by The Herald.
It has emerged that, the President’s family through a company called Stratcon Energy and Trading Limited run by Bumpty’s son, has been actively engaged in the procurement of Heavy Fuel Oil (HFO) and Light Crude Oil for power generation through Litasco since his assumption of power, resulting in the accumulation of significant debt and allegations of misuse of resources within the GNPC to favor the ruling family’s business interest.
The Ranking Member on Parliament’s Mines and Energy Committee, John Jinapor, had in a statement alleged that the government seeks to contract the facility using GNPC without the necessary approvals.
But the Ministry of Energy in a rebuttal issued on September 22, 2023, described the move by the Minority “as a calculated attempt to sully the reputation of government” for what they say is political reasons.
It clarified that the GNPC-LITASCO’ re-financing arrangement, has gone through various processes and is yet to be sent to parliament when the house reconvenes in October this year.
“It is important to state that, this particular facility the minority mischievously makes allusion to is being re-financed for the sixth time. In the 2023 Work Programme of the GNPC, the corporation indicated clearly, their intentions to raise $620million from the LITASCO facility to finance their work programme and proceeded to obtain the necessary parliamentary approval including the refinancing of the loan” the statement said.
It continued “Now, GNPC settled on the terms and conditions of this facility with LITASCO just last week Thursday, September 14, 2023, duly obtaining its Board’s approval. The record will show that on the same day, the document was sent to the Ministry of Energy for a “no objection”. After the Ministry of Energy expressed its no objection, it then forwarded the document to the Ministry of Finance for its ‘no objection” and approval too, in line with the dictates of the Public Financial Management Act (PFMA). MOF’s approval was given on Friday, September, 15, 2023.”
The Energy Ministry, further questioned why the Minority Ranking Member and the Minority group in general would allege wrongdoing, while Parliament is yet to make a decision on the agreement.
“The only possible reason one can larch unto for the minority’s action is to cause disaffection for government for possible electoral gains, given the proximity to the electioneering campaign season” it said.
The Ministry, however, called on the general public to ignore the inaccurate claims made by the Minority in parliament and treat it with contempt.
A memo prepared by the GNPC boss, Opoku Ahweneeh Danquah and intercepted by The Herald, has revealed how in the presence of the Chief of Staff, Frema Osei Opare, Secretary to the President, Nana Asante Bediatuo, Minister of Finance (MoF) Ken Ofori-Atta, Deputy Minister of Energy (MoE), the Chief Executives of Karpower and Litasco, and other parties, to discuss the imminent default confronting Ghana with respect to the Karpower Bank Guarantees.
The GNPC boss wrote that “on the 14th of September 2023 at 11am GMT, the Board Chairman and I were invited to Jubilee House to meet with His Excellency, the President of the Republic of Ghana. The meeting was to provide direction on the Litasco Phase 6 Facility”.
The memo disclosed that “…the President of the Republic of Ghana instructed that GNPC and Litasco must proceed with negotiating and concluding on the Litasco Phase 6 refinancing immediately”.
The loan, about US$430 million, will also partially settle the debt owed to Karpower, one of the Independent Power Producers (IPPs) favoured by the President. This move has raised questions about preferential treatment for Karpower, as numerous IPPs are currently owed by the state to the tune of US$2.2 billion.
Insiders suggest that, this modus operandi to pay off IPPs, appears to be linked to generating additional resources for the President’s family, disadvantageous to other IPPs in the process.
Civil Society Organizations (CSOs) have been actively advocating for the return of JOHL assets hidden in the Cayman Islands at the behest of the Finance Minister and the President.
Despite persistent calls, these efforts have yet to yield results. The latest attempt to leverage JOHL revenues for securing long term loans implies that the family wants to maintain control over these resources for at least five more years, even after the President’s term in office expires.
Insiders, have also revealed that the President is pressuring Litasco to increase the loan amount to approximately US$700 million, to bolster the President’s exit strategy and extend the collateralization of the revenues to about 10 years.
As a result, he has instructed the GNPC board to swiftly approve the agreement with Litasco. This development has raised concerns about the effectiveness of the GNPC board, particularly as the decision was made in consultation with the board chairman, Freddie Blay and the CEO of the corporation, according to the Memo available to The Herald.
Some board members, are expressing apprehension regarding the decision and the future accountability that may rest upon them.
Critics argue that the President’s actions seem to be aimed at exploiting backdoor channels to the International Monetary Fund (IMF) programme to further enhance his family’s wealth before the conclusion of his presidency in approximately 15 months.
The minority in Parliament, has issued a warning, stating that they will not approve the transaction. However, the President appears reluctant to seek parliamentary approval.
The use of JOHL funds for these purposes, as well as the concealment of assets, raises concerns about transparency and accountability in the utilization of petroleum resources. This ongoing situation is sure to remain a subject of considerable debate and scrutiny in the coming months.
Below is the statement issued by the Energy Ministry on Sunday.
IGNORE JOHN JINAPOR AND MINORITY’S MISCHIEF; THERE HAS BEEN NO WRONGDOING IN ‘GNPC-LITASCO’ PHASE 6 FINANCING
The Ministry of Energy’s attention has been drawn to a rather mischievous statement by the minority group in parliament, led by its ranking Member on the Mines and Energy Committee, Hon. John Jinapor on the above subject, with the unfortunate aim of sullying the reputation of His Excellency the President and some senior government officials.
We find their statement engineered, clearly, on the altar of political expediency and wish to correct the deliberate falsehoods contained in same as follows:
1. The Work Programme of the National Oil Company, Ghana National Petroleum Corporation (GNPC) is approved every year by Parliament which includes loans they may need to execute their programme.
2. It is important to state that, this particular facility the minority mischievously makes allusion to is being re-financed for the sixth time. In the 2023 Work Programme of the GNPC, the corporation indicated clearly, their intentions to raise $620million from the LITASCO facility to finance their work programme and proceeded to obtain the necessary parliamentary approval including the refinancing of the loan.
3. Parliament’s Mines and Energy Committee has since requested that the terms and conditions of the loan be brought to parliament in line with the oversight functions of the house. This is trite and the right thing to do. Government actors in this matter have no intentions of hiding any part of the process in secrecy.
4. With a clear understanding of the importance of parliamentary approvals in our democracy and the house not seen as a rubber stamp, government actors shall not under any circumstance finalise the terms and conditions of a loan before approval by parliament. In this instant case, government knows that, it needs an approval and not a ratification from parliament.
5. Now, GNPC settled on the terms and conditions of this facility with LITASCO just last week Thursday, September 14, 2023, duly obtaining its Board’s approval. The record will show, that on the same day, the document was sent to the Ministry of Energy for a “no objection”. After the Ministry of Energy expressed its no objection, it then forwarded the document to the Ministry of Finance for its ‘no objection” and approval too, in line with the dictates of the Public Financial Management Act (PFMA). MOF’s approval was given on Friday, September, 15, 2023.
6. The document is now due for Parliament when the house reconvenes mid-October for approval.
7. From the foregoing, it is clear that, GNPC needed to meticulously finalise the terms and conditions of the facility and obtain the necessary procedural approvals ahead of the final parliamentary approval.
8. The Ministry therefore struggles to establish why the ranking Member and the minority group, given their expected knowledge of these procedural requirements, would allege wrongdoing on the part of government actors and in fact impugn the integrity of even His Excellency the President, when indeed, what is being done is in line with law, propriety and in fact, the principles of good governance.
The only possible reason one can larch unto for the minority’s action is to cause disaffection for government for possible electoral gains, given the proximity to the electioneering campaign season.
9. We, on the back of the above stated incontrovertible facts reject outrightly, the inaccurate claims by the ranking Member and his colleagues to the effect that the facility is being procured clandestinely and not in accordance with law.
10.We wish to caution that, these hasty claims of a mirage of some misdeed on the part of government, obviously for political benefits, will as a matter of fact continue to denigrate the reputation of the entire political class. The collateral damage, will naturally, be suffered by the minority too.
11.The general public is therefore asked to completely disregard the statement by the minority and treat it with the utmost contempt it deserves.
*END*
Issued by the Communications & Public Affairs Unit
Contact: 03022683961
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