Head of the Majority Caucus in parliament, Alexander Kwamina Afenyo-Markin, has declared that the long-term agreement between the Ghana Revenue Authority (GRA) and Strategic Mobilisation Limited (SML) does not require parliamentary endorsement, as it is a deal between two domestic organizations.
SML, a completely Ghanaian-owned enterprise, has been at the heart of this discussion, with opponents contending that the extended duration of the SML contract with the GRA should have compelled parliamentary review.
However, Mr. Afenyo-Markin, speaking to the media, disputed this interpretation, claiming it distorts the legal stipulations. He argued that critics are confusing different legal regulations, thus misinforming the public and complicating the contractual proceedings.
He expressed dissatisfaction with what he termed the “oversimplification of the issues,” particularly the assumption that all government contracts – especially those that extend over multiple years – must be subjected to parliamentary oversight.
“You cannot get up and generalize it,” he stated, while calling for a nuanced understanding of the legal framework governing these agreements.
“Our argument is that this assertion is wrong,”
The Majority leader emphasized his point. He cited Article 181 of the constitution, noting that this provision applies to international commercial transactions. He pointed out Section 5 of Article 181, which requires parliamentary approval for international agreements, but not for local contracts such as the one with SML.
“Section 5 talks about an international commercial transaction. So, local contracts or MOUs or agreements of multi-year value that are local cannot come under the anticipation of Article 181, Section 5,” he explained. This distinction, he noted, is often overlooked, leading to confusion and misinterpretation.
Article 181(5)
Article 181(5) of the 1992 Constitution stipulates that all international business or economic dealings involving the government must be submitted to parliament for approval before they can be enacted.
For a transaction to fall under Article 181(5), it must satisfy two conditions: it must be an international business or economic transaction, and the Ghanaian government must be a participant in the transaction.
A business deal is deemed ‘international’ under Article 181(5) if it includes a notable foreign component. This could mean that the transaction itself has an international aspect, the parties involved (besides the government) are foreign nationals, live in different countries, or – in the case of companies – are operated and controlled from outside Ghana.
While many governmental transactions may be international, not all will be covered by Article 181(5). Only those with a ‘notable’ foreign element are included. The term ‘notable’ signifies that the foreign elements or connections must undergo a qualitative assessment to establish their significance to the transaction’s international nature.
Background
On January 2, this year, President Nana Addo Dankwa Akufo-Addo tasked KPMG with conducting an urgent audit of the transaction between the GRA and SML after a media report suggested the deal was suspicious and financially harmful to the state.
Following receipt of the audit report, the president directed that the downstream petroleum audit services provided by SML should continue, as KPMG’s findings indicated these services were essential and had resulted in significant savings for the state.
However, the president also ordered a review of the contract – specifically to change the fee structure from variable to fixed. Additionally, other contract provisions, such as those concerning intellectual property rights, termination conditions, and service delivery expectations, were to be revised.