The Ghana National Petroleum Corporation (GNPC) is at the brink of collapse, Former Power Minister Dr Kwabena Donkor, has hinted.
According to Dr Donkor who disclosed this in Parliament, “the financials don’t speak well of GNPC. He thus has called for stringent measures to be rolled out to forestall the collapse of the institution.
“The future is bleak for GNPC and, therefore, we must insist that GNPC stays on the straight and narrow path in its operations,” he stressed.
He bemoaned the fact that the GNPC is funding activities unrelated to its mandate, and warned of dire consequences if this development continues.
“We will urge that from a purely financial analysis, without injection of new funds, GNPC is on the brink of bankruptcy,” he said.
The GNPC is the state agency responsible for the exploration, licensing, and distribution of petroleum-related activities in Ghana.
It has been in operation since its establishment in 1983 by the PNDC Law 64, to support the government’s objective of providing adequate and reliable supply of petroleum products and reducing the country’s dependence on crude oil imports, through the development of the country’s own petroleum resources.
It is on record that the company in 2020, made a loss of USD163.392 million.
The company blamed this on the COVID-19 pandemic which wreaked havoc on many economies.
However, commenting on the report of the Committee on Employment Welfare and State Enterprises on the Financial Performance of GNPC for 2019 and 2020, Mr Duffour noted that the corporation’s coffer is in a bad shape.
He, thus, charged Parliament to take a keen interest in the management of the corporation.
“…Mr Speaker, in supporting the motion. I want to call the attention of this house to the need to bring GNPC, even if it is a committee of whole, to bring GNPC before this house for more critical scrutiny,” he said.
Also, Chairman of the Mines and Energy Committee Samuel Atta Akyea, noted that it appears the GNPC has drifted from its core mandate, a development which has accounted for its current woes.
Worried over the current state of the corporation, a ranking member on the Mines and Energy Committee, John Jinapor, bemoaned that the financial position of GNPC is devastating – a situation he said could lead to the collapse of the company.
He further lamented the huge losses recorded over the period in review. “I’m very, very worried about the state of GNPC reading this report. And if you look at Page 4, is tasked with the profitability assessment of the company. If we look at the gross profit margin, which is the gross profit expressed as a percentage of your total sales, it has reduced from 50% in 2018 to 26% in 2019 to 0.3% in 2020.” “If you look at the operating profit… it has moved from 28% to -19.23%, nearing the point that money doesn’t like noise.”
This comes after policy think tank IMANI Africa and the Africa Center for Energy Policy (ACEP) alleged that GNPC could cost Ghana between US$5 billion and US$6 billion. According to the two companies, the GNPC’s current arrangement with Genser Energy Holdings, a US-based Ghanaian-owned energy company, would lead to financial loss to the state.
GNPC, however, has debunked the assertion, emphasising that the figures quoted by ACEP and Imani to represent programmed losses are in fact budget deficits.
GNPC further stated that what it presents to Parliament in its annual Work Program is what the Corporation intends to spend on its activities and the sources of funding for such projects, and the means of financing the forecasted deficit, if any.
“It is based on these mis-represented figures that ACEP and Imani draw their conclusion that GNPC’s operations raise significant debt concerns, and that cumulatively, the Corporation’s actions could cost Ghana between US$5 billion and US$6 billion. These conclusions cannot be any further from the truth,” a document from GNPC sighted by The Independent Ghana read.
“The two organisations make basic errors, in their inability to distinguish between deficit financing and profit/loss,” the Corporation added.
According to GNPC, it remains a perennial loss-making organisation that has made a loss in only one year, i.e. 2020.
Source: The Independent Ghana