SML Probe: OSP Reveals Ghana Saved GHS 2.6 Billion and US$173 Million from Terminated Contracts

Introduction

In a significant development within the ongoing SML probe, the Office of the Special Prosecutor (OSP) in Ghana has disclosed that the country saved over GHS 2.6 billion and US$173 million by terminating specific parts of the Strategic Mobilisation Ghana Limited (SML) IT assurance contract. This announcement builds on earlier reported savings of GHS 1.2 billion from the main contract termination, highlighting the financial impact of anti-corruption measures in the extractive sector.

The SML probe centers on scrutinizing IT assurance agreements in Ghana’s petroleum and mining industries, aimed at ensuring revenue transparency. President Nana Akufo-Addo ordered the termination of the upstream oil and minerals monitoring contracts earlier this year, following a KPMG audit and OSP-initiated legal investigations. This move prevented costs for services that SML never commenced, demonstrating proactive governance in protecting public funds.

For those tracking OSP Ghana savings or government contract terminations, this update underscores the role of independent oversight in fiscal accountability. Read on to understand the breakdown, context, and broader lessons from this case.

Analysis

The OSP’s detailed addendum provides a clear breakdown of the avoided costs from the terminated SML contracts. These contracts operated on a variable fee structure linked to export volumes of crude oil and gold, sectors critical to Ghana’s economy. By halting them before implementation, Ghana avoided substantial expenditures over a five-year period.

Upstream Crude Oil Monitoring Costs

Ghana exports approximately 3.85 million barrels of crude oil per month. Under the SML agreement, the fee was fixed at US$0.75 per barrel. This would have resulted in monthly costs of about US$2.89 million, or US$34.65 million annually. Over five years, the total projected expense stood at US$173 million.

These figures are derived directly from OSP estimates, emphasizing how volume-based fees in crude oil export monitoring could escalate without delivering corresponding services. SML did not begin operations due to the timing of the KPMG audit and OSP probes, making termination a timely intervention.

Minerals Gold Export Monitoring Fees

For gold exports, valued at over GHS 5.8 billion monthly, SML’s proposed fee was 0.75% of the export value. This translated to GHS 43.7 million per month and GHS 525 million per year. Across five years, the cumulative cost would have reached GHS 2.6 billion.

The OSP notes that these gold export monitoring services were never activated, sparing Ghana from fees on unperformed work. This analysis illustrates the potential burden of unchecked contracts in the minerals sector, where export values fluctuate but fee structures remain rigid.

Overall, the terminated SML contracts represented a risk to state finances, particularly amid calls for transparency in IT assurance deals within Ghana’s extractive industries.

Summary

The OSP’s statement confirms total savings exceeding GHS 3.8 billion (including the prior GHS 1.2 billion) from ending the SML deal’s upstream and minerals components. These savings stem from unincurred costs for crude oil (US$173 million over five years) and gold exports (GHS 2.6 billion over five years). Termination followed presidential directive amid audits and investigations, preventing “further costs” during ongoing probes into contract awards.

This concise overview captures the essence of the SML probe OSP savings, positioning it as a win for fiscal prudence in Ghana’s anti-corruption landscape.

Key Points

Practical Advice

For citizens, journalists, and stakeholders interested in government transparency, here’s actionable guidance on engaging with cases like the SML probe:

Monitor Official Statements

Regularly check OSP and Ghana Revenue Authority (GRA) updates for primary sources on contract audits. Tools like government portals provide real-time data on extractive sector revenues.

Understand Fee Structures

When reviewing IT assurance contracts, calculate potential costs using export data from sources like the Bank of Ghana. For instance, multiply monthly volumes by per-unit fees to forecast five-year impacts, as done in this case.

Support Civil Society Oversight

Engage with groups advocating for extractive industry transparency. Participate in public forums or submit freedom of information requests to track contract awards.

Educate on Export Volumes

Use verified stats—Ghana’s 3.85 million barrels/month crude and GHS 5.8 billion/month gold—to benchmark similar deals. This empowers informed advocacy without speculation.

Applying these steps fosters greater public involvement in safeguarding revenues from terminated contracts Ghana.

Points of Caution

While the savings are confirmed, exercise care in interpreting the SML probe:

• Investigations into contract awards remain ongoing; no final culpability has been determined.
• Savings projections assume steady export volumes; actual figures may vary with market conditions.
• Fees were for proposed services never rendered, but full audit details await OSP conclusions.
• Avoid conflating termination savings with broader corruption findings until verified.

These cautions ensure balanced discourse on OSP Ghana SML investigation, prioritizing facts over assumptions.

Comparison

Compared to the initial GHS 1.2 billion savings from the main SML contract termination, the additional GHS 2.6 billion (gold) and US$173 million (crude oil) represent a threefold increase in fiscal relief. The main contract focused on downstream petroleum, while these targeted upstream oil and minerals—diversifying the savings across Ghana’s extractive value chain.

Versus Prior Reports

Early OSP remarks highlighted only the core termination; this addendum quantifies unstarted sectors, elevating total avoided costs. In context, Ghana’s annual crude exports (around 46.2 million barrels) align with global benchmarks for mid-tier producers, making the US$173 million projection realistic.

Gold savings dwarf prior figures due to high monthly values, underscoring minerals’ revenue potential. This comparison highlights escalating impacts as probes deepen in the SML contracts Ghana.

Legal Implications

The SML probe carries direct legal weight, as OSP investigations under Act 959 (Office of the Special Prosecutor Act, 2017) probe procurement irregularities in public contracts. President Akufo-Addo’s termination order aligns with executive authority over state agreements, suspending operations pending audit outcomes.

Key implications include potential procurement law violations (Public Procurement Act, 2003, Act 663) if undue awards are proven. Ongoing probes may lead to asset freezes, prosecutions, or contract reforms. Civil society demands for transparency invoke constitutional rights to accountability (Article 35, 1992 Constitution). No convictions yet, but the framework ensures verifiable enforcement.

These elements affirm legal safeguards in terminated SML contracts, promoting rule of law in extractives.

Conclusion

The OSP’s revelation of GHS 2.6 billion and US$173 million savings from terminated SML contracts marks a milestone in Ghana’s anti-corruption drive. By averting costs on unperformed crude oil and gold monitoring, the state exemplifies fiscal vigilance amid probes. This case educates on the perils of variable-fee structures and the value of timely audits.

As investigations continue, it reinforces the need for robust oversight in extractive revenues. Stakeholders should leverage these insights for sustained transparency, ensuring public funds benefit Ghanaians. The SML probe OSP savings story is a pedagogical blueprint for accountability worldwide.

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