Political Risk Analyst, Dr. Theo Acheampong has called on the President to make available the full report of KPMG on the Strategic Mobilization Limited (SML) deal, indicating that the whitepaper published by the Presidency failed to give full details of KPMG’s findings on the SML deal.

While he commended the President for engaging the KPMG to probe the SML deal, he noted that substantive issues that were revealed by KPMG’s report have confirmed his assertions that some of SML’s claims do not have any scientific backing.

One issue he mentioned he has with the SML deal is the legal and regulatory issues around the technical needs assessment of the deal that the SML failed to do. He noted that that component of the deal must be properly dealt with.

“The fact that the Parliamentary approval was not taken for these multi-year contracts that flouted the Public Financial Management Act of the country. And the fact that even at the corporate management level of the GRA, some of the earlier contracts, specifically the 2018 and 2019 contracts, were not sent to the board of the GRA for approval”.
Dr. Theo Acheampong

Furthermore, Dr. Acheampong indicated that the SML deal blatantly violated several Public Financial Management Act and other corporate governance protocols of the country, an occurrence he noted would not have happened in other jurisdictions.

He noted that the SML was supposed to provide four services to Ghana through the Ghana Revenue Authority (GRA). The services, he indicated, include transaction auditing, external price verification, downstream petroleum audits, and upstream petroleum and mining audits.

He stated, however, that the SML failed to provide these services, emphasizing that the government’s claim that the SML provided partial services is flawed as there is no value for money the government spent on the deal.

“So we need to know even in terms of percentages, if you said they delivered 80% or 90%, fine, we can accept that. But if they partially delivered and it is let’s say 20-30%, and they still haven’t met 70%, it is simple arithmetic. Again, it goes to show the importance of releasing the full report…”
Dr. Theo Acheampong

SML’s Intervention Ineffective

Moreover, Dr. Acheampong asserted that the downstream petroleum audit, as highlighted by KPMG, showing a rise in petroleum volume of 1.7 billion liters, since SML’s operation, and a boost in tax revenue of approximately GH₵ 2.5 billion, would be considered inconclusive until the complete KPMG report is made available to the public.

He noted that though SML’s intervention could have contributed to the increased revenue made on petroleum, it is not entirely responsible for that as the volume of petroleum consumption continues to increase over time.

He indicated that as the pricing regime for petroleum is dynamic, the impact of SML’s intervention on the increase in volume can only be ascertained when other factors like pricing dynamics and consumption are isolated from one another.

“And so, I have quite a number of question marks around that without having fully seen the full report. On the upstream and mining side, I think it is even a nonstarter and I’ve argued that SML does not have the capability or the capacity to do the sort of auditing that is required, especially, with upstream petroleum”.
Dr. Theo Acheampong

He noted that the major problem with upstream operation is related to cost and not revenue, emphasizing the need for proper cost auditing to be done.

He noted that several other companies can conduct cost auditing more effectively than SML proposes to do and suggested that the government should engage any of such companies to save cost and get value for money .

Moreover, Dr. Acheampong emphasized the importance of conducting thorough transfer pricing audits for the bulk minerals involved in mining operations.

He pointed out that a detailed examination of the transfer pricing practices is necessary to ensure transparency and accuracy in the valuation of these minerals.