Due to large debts owing by the government and its agencies, the Ghana National Petroleum Corporation (GNPC) is currently experiencing a serious financial crisis.
Through loans, guarantees, and payments made on behalf of the government to state-owned firms (SOEs) such the Volta River Authority (VRA), Karpowership, the Electricity Company of Ghana (ECG), and the Tema Oil Refinery, GNPC owes over $1.23 billion as of the end of 2023.
The Public Interest and Accountability Committee (PIAC) has voiced worries that GNPC’s financial viability is being jeopardized by this debt. Mark Agyemang, Technical Manager at PIAC, pointed out that GNPC has been forced to pre-finance or guarantee a number of government projects, which has resulted in a position where the state, which is in charge of these debts, is also the entity that owes GNPC.
In addition to these financial difficulties, the Petroleum Revenue Management Act stipulates that GNPC will no longer receive funds from the Petroleum Holding Fund (PHF) after 2026. PIAC cautions that GNPC’s sustainability may be in jeopardy if the current debt problem is not addressed and financial independence is not guaranteed.
PIAC recommends that GNPC stop making new loans and guarantees to government organizations until outstanding debts are paid off in order to lessen these problems.
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Furthermore, in order to allow for a more diverse governance structure and maybe provide the company more financial independence and less political clout, PIAC supports a review of the laws governing GNPC.
GNPC’s continuous financial burden underscores the need for urgent reforms to ensure the corporation’s sustainability and continued contribution to Ghana’s petroleum sector.
