The Chairman of the Public Interest and Accountability Committee (PIAC), Dr Steve Manteaw, has said the tension brewing at the country’s national oil company, the Ghana National Petroleum Corporation (GNPC), is sending a wrong signal to investors.
He said the situation, which had led to the exchange of various memos between the board chairman and the chief executive officer (CEO), some of which had been made public, cast a slur on the corporate governance systems in the corporation which played a key role in securing the interest of the country in the oil and gas sector.
Addressing journalists at a workshop by the Institute of Financial and Economic Journalists (IFEJ), with support from the German Development Corporation (GIZ) on the 2017 and 2018 reports of PIAC, Dr Manteaw said the current situation defied the corporate chain of command.
“There is competition for influence between the board chairman and the CEO. The board chairman behaves as if the GNPC is an extension of the party domain he controls and that for me is problematic.
“GNPC is a commercial entity and, therefore, if we politicise it as we have, you make it unattractive for the company to attract the brightest and best and the good companies of this world,” he said.
He said the country risked losing investors because companies would not want to work with an entity that was heavily politicised.
“We may lose the opportunity to attract investors to work with us. No companies worth their salt would want to work with a commercial entity that is heavily politicised. There will be the risk in change in direction and policy if there is a change in government,” he said.
Dr Manteaw said the current turf war was as a result of a disagreement over procurement and recruitment between the Chief Executive of GNPC, Dr K. K. Sarpong, and the Board Chairman, Mr Freddie Blay.
He said there was, therefore, pressure mounting on Dr Sarpong to reverse a decision that sought to bring the procurement function of the corporation’s chief finance officer directly under him.
“It is actually demoralising the staff. The GNPC board is split right in the middle, the staff are also split right in the middle and it is not good for efficient and effective work,” he said.
Many other corporate governance experts have condemned the present interference of the board chairman in the day-to-day activities of the state-owned corporation, particularly when the board chairman position is not an executive role.
Financing quasi expenditure
Dr Manteaw said the use of GNPC to finance quasi expenditure was gradually making it a cash cow and not allowing it to operate as a commercial entity.
“GNPC has been spending on projects that ordinarily should be financed through the budget,” he said.
That, he explained, would hinder the agenda of weaning the GNPC off national budget to be able to raise its own funds to finance its operations after a while.
“More importantly as we look at GNPC with the prospects of weaning it off the national budget, GNPC will find it difficult to raise funds. A company that takes money and applies it to areas that are not within its core functions will find it difficult because if any financial institution is to do due diligence before lending money, I doubt GNPC will sail through,” he said.
The GNPC, he said, had been spoon-fed by oil revenues since the start of commercial oil production and if this trend continued, the law would have to be amended at the end of the period to provide for further spoon-feeding of the company.