Home » Minerals Commission Exonerates Itself from SML Contract Controversy

Minerals Commission Exonerates Itself from SML Contract Controversy

Clarity Emerges in Ghana's Gold Sector Amid Contractual Dispute

by Oluwatosin Racheal Alabi

The Minerals Commission of Ghana has officially distanced itself from the controversial contract awarded to Strategic Mobilisation Ghana Limited (SML), a subsidiary of a timber company. This contract, which involves revenue assurance services in the gold production sector, has been a topic of intense public debate and scrutiny.

In a recent development, the Chief Executive Officer of the Minerals Commission, Martin Kwaku Ayisi, stated in response to a Right to Information (RTI) request by investigative journalist Manasseh Azure Awuni, that the Commission played no role in the awarding of this contract. This clarification comes amidst rising concerns over the contract’s implications and the Commission’s involvement.

Ayisi’s statement, accessed by Myjoyonline.com, also indicated that the Commission has no reports of losses due to calculation errors in the mining sector’s revenue. This response is significant as it delineates the Commission’s scope of operations and its stance on the SML contract.

The contract, granted by the Ministry of Finance and the Ghana Revenue Authority (GRA), allows SML to earn over $100 million annually for its duration. It is a five-year contract with an option for renewal for another five years.

President Nana Addo Dankwa Akufo-Addo recently suspended this contract, calling for an audit by KPMG following a resolution passed by parliament to investigate the matter. This decision was influenced by revelations from an investigation by The Fourth Estate, which raised questions about SML’s claims and operations.

The Fourth Estate’s investigation brought to light discrepancies in SML’s claims about its revenue assurance role in the downstream petroleum sector. Despite SML’s assertion of saving Ghana more than GHS3 billion, evidence suggested otherwise. The company later retracted these claims, with SML’s Managing Director, Christian Tetteh Sottie, attributing the discrepancy to media reportage errors.

The GRA, however, upheld SML’s claim of significant savings, although it did not detail how these savings were actualized. This stance was counteracted by civil society organizations like the Africa Centre for Energy Policy and IMANI Africa, who argued that the data did not support GRA’s claims of significant revenue increment.

Analysis of data from the Ministry of Finance and the National Petroleum Authority indicated variations in product consumption growth, which did not conclusively support GRA’s claims. For example, a 5% and 7% growth in refined product consumption was reported by GRA and NPA, respectively, for the year SML commenced operations.

Despite these anomalies, the Ministry of Finance directed GRA in June 2023 to expand SML’s scope to include monitoring oil and gold production. This expansion was based on the perceived need to oversee these sectors more closely, despite existing systems to protect government interests in these areas.

Similar to the Minerals Commission, the Petroleum Commission, regulator of the upstream petroleum sector, also denied knowledge of the contract and any associated losses in the sector. This position underscores a lack of coordination among various governmental bodies concerning the SML contract.

The awarding of the SML contract has raised questions among members of parliament, civil society groups, and anti-corruption campaigners. They have questioned the rationale behind awarding such contracts, especially when existing systems are in place.

The Minerals Commission’s clarification on its non-involvement in the SML contract adds a new dimension to the ongoing debate. It highlights the need for transparency and proper coordination among government bodies in contract awards and oversight. As Ghana navigates this complex issue, the importance of clear communication and accountability in government operations becomes ever more evident.

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