GNPC Faces Risk of Collapse Post-2026 Due to $1 Billion Debt, PIAC Warns

The Ghana National Petroleum Corporation (GNPC) is facing a precarious future beyond 2026, as its financial health is at risk due to the government’s mounting debt to the Corporation.

According to a report by the Public Interest and Accountability Committee (PIAC), the government owes GNPC $1.14 billion as of the end of 2022.

This debt comprises payments made on behalf of the government and State-Owned Enterprises (SOEs), as well as contributions to national and local projects, and gas supplied to the Ghana National Gas Company (GNGC).

PIAC’s report, titled “The Role of GNPC in the Upstream Petroleum Industry: Challenges and Prospects,” highlights the Corporation’s financial challenges.

PIAC has raised concerns about GNPC’s expenditures that go beyond its core mandate, which are hindering its ability to operate as a financially independent entity in the petroleum industry.

For instance, expenditures on various Gas Enclave roads in the Western region totaled US$124.66 million by the end of 2022.

These expenditures, often made on behalf of the government and other agencies, are impeding GNPC’s ability to fulfill its primary responsibilities and contribute to its development.

PIAC warns that without funding from the Petroleum Holding Fund (PHF) after 2026, as stipulated in the Petroleum Revenue Management Act (PRMA), GNPC may struggle to survive without government support.

PIAC also expresses concern that GNPC is vulnerable to political influence, leading to quasi-fiscal expenditures and advances to other parastatals that should be the responsibility of the central government.

To address these challenges and ensure GNPC’s sustainability, PIAC recommends several measures.

Firstly, PIAC suggests that GNPC allocate more funds to its mandate and development by refraining from making payments on behalf of the government and its agencies.

Additionally, PIAC calls for urgent action to recover funds owed to GNPC.

PIAC also recommends that GNPC stop funding programmes and projects for other agencies.