By Alex Ababio
Earlier in 2022, Ghana’s petroleum sector was embroiled in controversy over an alleged $100 million missing from the country’s oil proceeds. The fact that this huge amount, intended for national development, instead found its way to dubious circumstances raises urgent questions of accountability and transparency in the government’s financial dealings.
The Disappearance of Funds
This dispute arises from the proceeds from the sale of 944,164 barrels of crude oil from the Jubilee and TEN fields during the first quarter of 2022. These funds were not, however, paid into the Petroleum Holding Fund (PHF) as required under the Petroleum Revenue Management Act (PRMA), said the Public Interest and Accountability Committee (PIAC). The funds, however, were diverted into a phony offshore account belonging to Jubilee Oil Holding Limited (JOHL)66, a subsidiary of the Ghana National Petroleum Corporation (GNPC).
Dr. Steve Manteaw, Chairman of the Civil Society Platform on Oil and Gas in Ghana, also lent support to this travesty with a comment that should have shattered the seemingly indifference to the rest of the world: “The Petroleum Holding Fund is the receptacle for all petroleum revenues… it was created deliberately to avoid the co-mingling of petroleum revenues with the general pool of funds that come to the Government and therefore to allow for proper tracking and accounting for petroleum revenue in this country”.
A Breakdown: The Misdirected Funds
Investigative reports show that the government had acquired a 7% stake in the Jubilee and TEN fields in 2021. This stake was supposedly acquired for GNPC. However, it was later assigned, for accounting purposes, to JOHL, a company incorporated in a tax haven—the Cayman Islands. Paying into JOHL’s offshore account, the oil proceeds were therefore bypassing the PHF and, effectively, parliamentary scrutiny.
This maneuvering effectively sheltered the funds from public view. He added that: “It doesn’t fall within the remit of the Ministry of Finance to be granting loans; the granting of loans or payment of loans is not reserved for the Ministry of Finance, and it does not have jurisdiction over the assessment or disbursement of public resources, that is for the Parliament, the Parliament is the authority who has [the] jurisdiction to grant permission for public resource expenditure protocol”.
Lack of Proper Investigation
Glaring irregularities notwithstanding, very few have actually investigated the matter. The Minority in Parliament brought a motion of censure against the Minister for Finance, Ken Ofori-Atta for an unauthorized transfer of funds. However, the proceedings led to no concrete outcomes, and the Finance Minister stayed in office.
The GNPC has however defended the transaction, insisting that JOHL was entitled to the funds it got. And so Jubilee Oil Holding Limited is a 100 percent owned by GNPC and we believe that it is a company that is registered in accordance with the Companies Act and not the Petroleum Revenue Management Act, deputy CEO of GNPC, Joseph Dadzie, explained. This position has made it more difficult for accountability efforts.
Research Directions: Regional Differences and Similarities
Ghana’s experience is not unique. Similar schemes have been used to siphon off petroleum revenues across Africa. In Nigeria, for example, the “Malabu Scandal” was about the diversion of $1.1 billion to a company secretly owned by a former petroleum minister. These are public funds, which have been siphoned off through obscure transactions and offshore accounts.
Likewise in Angola, billions in oil proceeds were said to be missing because of secret deals involving state-owned companies and shell companies. These cases reflect a widespread tendency to exploit gaps in regulation and weak oversight systems to siphon off public funds.
Archaic Measures and Recommendations
In order to avoid such financial malfeasance on its part, there must be some firm actions taken by Ghana:
We can start with the following: Strengthen Legal Frameworks: Amend laws to block loopholes that allow the diversion of funds. This also means that all petroleum revenues, from whatever entity, must be deposited into the PHF.
Improve Controls and Accountability: Strengthen the capacity of both parliamentary committees and independent institutions, such as PIAC, to exercise oversight over and probe financial dealings in the petroleum sector.
Enhance Transparency: Require disclosure of all contracts, transactions, and financial dealings surrounding petroleum revenues. This will allow civil society and the media to oversee and hold officials accountable.
Enforcement of Anti-Corruption Measures: Implement strict penalties for those found guilty of misappropriating public funds at individuals and entity-level (prosecution, asset recovery).
The missing $100 million of Ghana’s petroleum revenue exposed several critical weaknesses in the management of the country’s finances. If concrete steps are not taken to address these issues, public trust will erode further and the developmental aspirations of the country will continue to be thwarted. Authorities must do a thorough investigation, who is accountable for this situation, and implement reforms that will secure Ghana’s resources for the people of the country.