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Feb 19, 2019 | Business & Finance

CSOs Demand Review Of Corporate Governance Structure Of GNPC

By Modern Ghana
Dr Steve Manteaw
Dr Steve Manteaw

Civil society organisations in the extractive sector are calling for a review of the corporate governance structure of the Ghana National Petroleum Corporation (GNPC). The advocates are concerned about what they describe as over-politicization of the state entity.

Ghana Oil and Gas for Inclusive Growth (GOGIG) as well as Ghana Extractive Industries Transparency Initiative (GHEITI) are spearheading the call.

The call was made in Kumasi on the sidelines of a discussion of the reports on the 2015/2016 mining, oil and gas and the Ghana Commodity Trading Pilot.

The GNPC was set up to lead the sustainable exploration, development, production and disposal of the petroleum resources of Ghana, by leveraging the right mix of domestic and foreign investments in partnership with the people of Ghana.

The GNPC is bedeviled with political wrangling, the latest being administrative war between the Chief Executive and Board Chairman over the hiring of a procurement manager.

PoliticiSation of GNPC

Co-chair for the Ghana Extractive Industries Transparency Initiative (GHEITI), Dr Steve Manteaw, believes the development is dangerous for investors.

“…in fact previous governments have also done same but it looks like the whole problem in terms of politicisation of a national commercial entity as strategic as GNPC has been compounded under this government.”

Mr Manteaw continues that the situation has grown to the extent that, “in some respect it appears that GNPC is being treated as an extension of the NPP bureaucracy where you have the party Chairman is chairing the board and then through the instrumentation of this same party chairman appointing the former deputy youth organizer as the CEO of GNPC foundation”.

According to him, the situation sends wrong signals in terms of the expectations of the international community to depoliticise GNPC and allow it to operate as a purely commercial entity.

Effects on 2020 elections

GNPC was established to represent Ghana’s commercial interest in oil production and as a commercial entity, GNPC is expected to make profit and pay dividends to the state.

The CSOs say the situation where GNPC has moved from its core mandates of exploring for oil and even getting into production of oil, and into doing or financing expenditures is bad.

They hold that the added mandates of the GNPC have become the liabilities of the government to finance through the budget.

Dr. Manteaw fears government might use GNPC to facilitate quasi physical expenditure in the 2020 election, if the current feud is not addressed.

“My particular worry is that if Ghanaians are not careful, in the 2020 elections we will see a lot of quasi-physical expenditures being undertaken by GNPC through its foundation all ostensibly to influence the outcome of the 2020 elections”.

He is worried that if care is not taken Ghana will not reap the full benefit of its discovery of oil in commercial quantities.

Corporate governance review

In addition, the Ghana Oil and Gas for Inclusive Growth (GOGIG) has said the corporate governance structure of GNPC must be looked at again.

Technical Consultant for GOGIG, Samuel Bekoe, says whichever corporate governance existing at GNPC needs a review.

He indicates that sometimes the political capture in GNPC which seems like its becoming uncomfortable because of some of the information that has been going around about GNPC.

According to him, in the last government and in this government, it has been the same and the government should have a relook at the corporate governance structure.

“…we should have a discussion on this issue and look at what are the corporate governance measures that will help GNPC to build as a company that will be Independent of government In the near future.

"We need better corporate governance in terms of how we select people for GNPC, GNPC employment, Procurement in GNPC, whoever is held the standard operating procedure etc”.

Mr Bekoe says the situation is neither pleasant for Ghanaians nor pleasant for investors.

GNPC is expected to be off government subvention and produce oil and gas independently after 15 years from when Ghana struck oil in 2007.

The strategic vision of GNPC is to become an independent oil producer and so we don’t want to end up like NNPC or PETROBRAS whose activities affected both the Nigeria and Brasil economy respectively.

Source: Joynews

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