Sole Sourcing: Revisiting the SML Deal – Is Ken Ofori-Atta Guilty?

Introduction
Recent public discourse across traditional media and social platforms has intensified scrutiny of sole-sourced government contracts. Questions have been raised regarding entities with little or no expertise securing significant public contracts. This has triggered a broader conversation around procurement integrity, value for money, and accountability in public office.

With aforementioned in mind, this article will analyze the contractual relationship between Strategic Mobilisation Ghana Limited (SML) and the Ghana Revenue Authority (GRA); and the associated allegations against former Finance Minister Ken Ofori-Atta.

Given the heightened public interest and the serious nature of the claims—including procurement breaches, financial loss, and potential personal enrichment—it is important to move beyond perception and examine the facts as established by the available reports.

What the SML Deal Was Intended to Achieve

Prior to the SML contract, the GRA had an agreement with West Blue Ghana Ltd on 4^th August 2015. West Blue provided technical assistance to GRA with respect to National Single Windows Project. On 1^st June 2018 SML was appointed as a sub-contractor to West Blue (a then service provider to GRA) to provide transaction audit service till 31 December 2018.

On 1^st January 2019, GRA executed a contract with SML for extended audit services renewal on a monthly basis. (This agreement followed the expiration of the West Blue contract and the SML sub-contract on 31^st December 2018.)

Between 2018 and 2020 , GRA and SML entered into agreements using the sole-sourcing method , without PPA approval in breach of Act 663 (as amended) and the Public Financial Management Act 2016, which mandated that multi-year contracts required parliamentary approval.

On 27 August 2020, PPA ratified the GRA’s decision to contract SML using the single-source method inline with Section 90 (3) (c) of Act 663 as amended.

On 22^nd June 2023, Ministry of Finance (MOF) instructed GRA to expand the scope of SML’s services to include upstream oil drilling and gold mining. On 27 September GRA sought approval from PPA on the expanded scope as per directives from the Ministry of Finance. PPA approval was granted on 27 September 2023.

Ghana had lost considerable sums of revenue dues to under-declaration, diversion and manipulation of petroleum data. In light of this the GRA and SML agreements were to ensure revenue assurance, particularly in the petroleum downstream sector. GRA therefore

Inlight of the conversation and controversy surrounding SML And GRA, two entities conducted their own investigations; KPMG audit commissioned by President Akuffo Addo and the investigative findings released by the Office of the Special Prosecutor (OSP).

KPMG was tasked to examine the processes , approvals , payments and value for money. Its tone was not accusatory but neutral. The OSP on the other hand approached the investigations to establish criminality.

Where Both Reports Agree

Both reports (KPMG and the OSP) identified breached in procedure in the SML–GRA arrangement. The two bodies identified the following

- Public Procurement Authority (PPA) approval was missing

- Parliamentary approval should have been sought

- Oversight and documentation were weak
- Payments were made before full regulatory compliance

These raised serious issues pertaining to governance which requires institutional reform.

Where The Reports Diverge

1. On the Nature of the Lapses
KPMG describes the failures as administrative and procedural. The OSP interprets them as criminal and intentional.

2. On SML’s Performance
Based on the KPMG report, there was quantitative increment in volumes of petroleum lifted of about 1.8 billion litres within the period 1 May 2020 31^st December 2023. This amounted to 38.6 litres per month. According to the report, the contract led to a significant increase in volumes, with a recorded rise of 1.7 billion litres, and consequently, an increase in tax revenue to the State amounting to GH¢2.45 billion.

Additionally, the report highlighted qualitative benefits, such as the implementation of 24/7 electronic real-time monitoring of outflow and partial monitoring of inflows of petroleum products at depots where SML installed flowmeters.

KPMG confirms that SML delivered some services and invested in infrastructure. The OSP believes there was no value for money.

3. On Payments
KPMG acknowledges that SML received GH¢720 million between 2020 and 2023 for the GH¢2.45 billion in revenues they brought in to the state coffers. SML received payment of 29.41% of the revenue they helped the state to generate under the contract. The OSP frames the same payments as unlawful and potentially harmful to the state.

4. On Ken Ofori‑Atta
The KPMG report does not state that Ken Ofori-Atta personally profited under the SML agreement. KPMG audit report is not accusatory. It did not accuse the former Finance Minister of corruption, personal gain, or criminal intent. It notes that the contract originated at the Ministry of Finance and that oversight lapses occurred under his leadership — but stops short of attributing wrongdoing to him personally.

The OSP, however, implies criminal liability, though no court has validated these claims.

Myths versus Reality

In politics perception they say is reality. Due to the cacophony of the then opposition and media houses, the public has often treated the KPMG report and OSP’s findings as one and the same.

Whereas the KPMG report cited governance and regulatory lapses, the OSP report concluded criminality.

President Obama summed it best when he visited Ghana in 2009. “Africa doesn't need strongmen, it needs strong institutions”. Ghana like the rest of Africa has weak institutions. Corporate Governance , systems and controls , supervisions and oversights functions are very weak. More often than not, we treat poor processes, lack of functional oversight as corruption.

This contract for all intents and purposes delivered benefits to the state, and should not be tinted with a political lens and labelled as causing financial loss to the state – to wit corruption.

A More Honest National Conversation and Lessons Learnt

In every situation, individuals and organisations even if they mean well will make mistakes, we are human afterall. Our ability to learn from institutional failings should be a learning curve for all.

1. PPA

In all, the SML contract highlighted a litany of compliance breaches. GRA and SML were granted PPA approval (after PPA had rejected three (3) previous attempts).

As a Public body, PPA in the interest of transparency and accountability ; should have published on its website , its rational for rejecting previous approval attempts.

If the PPA (in its oversight functions) manages to publish approvals and rejections of contracts; the public will be much more educated on the process of awarding contracts.

So far the PPA, OSP and the KPMG audit report have not helped us on why these attempts were rebuffed. We are none the wiser (on why PPA finally) approved the sole-sourced contract.

2. Remedies

Compliance and regulatory breaches (by state institutions) happen all the time. There are remedies and actions that can be taken in real time to right institutional failings.

Under the Public Procurement Act (Act 663) , any contracts without PPA approval could be voidable. However, this element of lack of PPA approval was “ratified” when the contract received PPA approval. The Public Procurement Act (Act 663) does not proscribe a penalty where a contract has been ratified.

With the subsequent ratification in mind, public bodies like GRA and their Senior Management should be named and shamed and possibly fined.

Where approvals were not in place before moneys were expended, refunds may be requested with interest. Under Article 187(7)(b) of the 1992 Constitution of Ghana, if the illegal contract leads to a loss of public funds, the Auditor General can disallow the expenditure and surcharge the principal spending officer (the person who authorized the contract) for the full cost.

In the case of SML , they should forfeit any payments they received prior to any approvals by PPA.

This was a contract involving a state institution and a private entity. The Key wording here is contract.

Any remedies, should be contractual in nature. Afterall the contract brought in benefits to the state and any lapses were subsequently ratified.

To allege criminality , the onus is thereon the OSP to prove criminal intent and willful financial loss. The bar in proving that a crime took place is very high (unlike a contractual remedy). For a finding of criminality, it is not sufficient to establish procedural breaches. There must be clear evidence of intent, personal benefit , willful financial loss. These elements must be distinguished from administrative inefficiencies.

Where procedural breaches occur, the question of value-for-money must be assessed independently. A contract that yields revenue gains raises legitimate questions as to whether the threshold for “financial loss to the state” has been met. Financial loss must also be willful in nature. In light of the gains associated with the contract, proving financial loss, where there has been a gain in revenue is problematic to say the least.

If Ghana is to move forward constructively, the debate must be grounded in learning from such thematic outcomes.

My Final Thoughts

1. Did SML and GRA finally get approval from PPA? The answer is Yes.
2. Did the KPMG’s audit report evince a loss in the contract like Goldbod did (and blamed it on transactional costs)? The answer is a Big No.
3. Did the SML deal bring in ₵ 2.45 billion (about 2 trillion old Ghana cedis) in revenue, which benefitted the state? Yes it did.
4. Were any Public Official including Ken Ofori-Atta bribed? So far the OSP has not been able to state that Ken Ofori-Atta was bribed.
5. Has Ken Ofori-Atta personally gained any monetary benefits from the SML deal? OSP alleges corruption, but without proving that Ken Ofori-Atta benefited personally, then the OSP’s argument are weak.
6. Did the State suffer a financial loss as a result of the SML contract? SML performed its mandate under the contract. They charged for their services. As a result of their performance , the state managed to accrue ₵ 2.45 billion (about 2 trillion old Ghana cedis).
7. Where public bodies do not have the ingenuity in ideas and personnel is it a good idea to bring private entities on board? Public-Private partnerships should be encouraged, where there is value for money.
8. Was there value-for money in the SML deal? If I manage to bring in money that you were losing , that is value. The state gained ₵ 2.45 billion. SML also gained by charging for its services.

Making public office holders accountable is a right course of action. Accountability demands fairness and integrity within public discourse. Let us also be circumspect in calling out witch-hunting.

Post SML and with a change in government , single sourced contracts are still ongoing. In the words of Sammy Gyamfi, “NDC never said sole-sourcing was a sin or unlawful”. With this logic, If GRA grants SML a sole-sourced contract, OSP shouldn’t be alleging corruption and illegality.

Authored by Kwadwo Kusi-Frimpong, a specialist in Law, Finance, Financial Crime, Governance, and Regulation. He brings substantial expertise from his work with banks and financial institutions across the United Kingdom, Switzerland, and The Netherlands.

Kwadwo has appeared on TV3 and is a regular contributor of Ghana Broadcasting Corporation flagship programmes including News, Market Avenue and Talking Point.

He is a graduate of University of Ghana (Political Science and Philosophy), Graduate Diploma in Law and LLM from University of Law (formerly College of Law), and a post graduate degree in Financial Strategy from Said Business School, University of Oxford.

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