President Orders KPMG Probe into Alleged Controversial GRA-SML Contract

In the latter part of 2023, a scandalous exposé unfolded, revealing a concerning alliance between the Ghana Revenue Authority (GRA) and Strategic Mobilisation Ghana Limited (SML). The partnership, entailing substantial annual allocations to the private contractor under the guise of revenue assurance in the petroleum downstream sector, triggered public outcry. Further investigation revealed SML’s additional role as the primary auditor of the upstream petroleum and minerals sectors, raising questions about a potential yearly cost exceeding $120 million.

In response to the public uproar and a documentary by the Fourth Estate, President of Ghana ordered an inquiry into the GRA-SML contract. KPMG, a global professional service company, was engaged to investigate the contractual relationship between the two entities.

Testing GRA’s Claims

GRA had issued a statement justifying its association with SML, asserting a 33% improvement in downstream petroleum sector figures over the two-year period from 2018 to 2021. To scrutinize these claims, a comparison was made between GRA and National Petroleum Authority (NPA) data. The analysis revealed discrepancies, challenging GRA’s assertions and questioning the effectiveness of SML’s intervention.

  YearVolumes (NPA) (Million litres) Volumes (GRA ) (Million litres)
AnnualMonthlymonthly differential AnnualMonthlymonthly differential
2018/194,507.03375.59  4,366.80363.9 
2019/204,803.65400.324.71 (7%)4,599.38383.2819.38 (5%)
2020/215,262.43438.5438.24 (10%)5,088.55424.0540.77 (11%)
2021/224,975.12414.59-23.95 (-5%)4,740.32395.03-29.02 (-7%)

Contradictory SML Data

SML had previously claimed significant savings in the state’s revenue outlay. However, a thorough examination of SML’s data, in comparison with GRA’s and NPA’s, exposed intentional inflation, rendering SML’s dataset unsuitable for tax purposes. Despite these discrepancies, SML received substantial payments, prompting concerns about the necessity and effectiveness of their involvement.

Extension of SML Contract

The extension of SML’s contract to include auditing of gold production and other minerals raised eyebrows. The lack of stakeholder consultations and the absence of distinctive features from existing methods of production accounting led to skepticism about the rationale behind this decision. Questions were raised about the hefty annual fee of $40 million allocated to SML and the additional $55 million for gold production, which seemed arbitrary and unnecessary.

KPMG’s Intervention

The President’s engagement of KPMG for the investigation faced criticism due to the company’s existing contracts with GRA and its potential conflict of interest. Concerns were raised about KPMG’s impartiality and the company’s track record in similar contexts in other countries. Suggestions were made for an independent investigation by statutory and constitutionally empowered agencies, as well as Parliament, to determine if the state had been misled.

Opportunity for Holistic Examination

The SML situation presented an opportunity to holistically examine various revenue assurance contracts across sectors, freeing up resources for development. The need for a comprehensive examination of revenue losses in the downstream sector, the illicit practices of some Oil Marketing Companies (OMCs), and GRA’s entitlements by law was emphasized. The hope was expressed that those in power would act to rectify these issues for the benefit of the state.

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