Why GNPC has terminated the $3million a year sponsorship with the Ghana FA

State-owned oil company, Ghana National Petroleum Corporation (GNPC), has announced its decision to sever ties with the Ghana FA and Black Stars following a decision by its Board to vote US$1.5million to support sports development in the country.

Per the 2015 Financial Report of the GNPC, the five-year sponsorship for the Black Stars will run out in December 2017.

However, the agreement signed between the GNPC and GFA, is renewable yearly, subject to the satisfaction of certain conditions.

According to sources at the Ministry of Youth and Sports (MOYS), the disbursement of the US$1.5million (which is 50 per cent of the Black Stars deal) to the MOYS will all but end the GNPC’s $3 million-a-year sponsorship, although it will continue to pay the salaries of the national team coach, Kwasi Appiah.

The decision of the GNPC Board to finance sports development was announced in a statement issued by the Ministry of Youth and Sports last Wednesday, confirming the receipt of a communication from the GNPC Board to that effect.

It will be recalled that before approving the GNPC’s budget for the 2017 fiscal year, Parliament’s Sub-Committee on Mines and Energy — which has oversight responsibility for GNPC — asked that the funding for the Black Stars be removed from the company’s expenditure, stating that sponsorship of the national team was not among the core business of the oil firm.

Background

In January 2013, the Ghana National Petroleum Corporation signed a 5-year sponsorship deal with the GFA worth $3m a year for the Black Stars. GNPC thus replaced Goldfield Ghana limited who had quit their partnership with the GFA a year earlier.

There have been recent back and forth regarding the GNPC’s $15m partnership agreement with the Ghana FA has come to an end.

The decision comes after a brouhaha over how the National Petroleum Regulatory body should invest 30% of the national kitty in one football team

Leader of government business in parliament, Osei Kyei-Mensah Bonsu, has recently questioned in the media and on the floor of parliament, the lack of transparency and accountability of the GNPC investment into the Black Stars, describing the deal as one that “does not make sense”.

But with the current review of the GNPC deal that includes a slash down of the quantum among other things, and the stern call for scrutiny by government, will the company continue to remain as the headline sponsor of the Black Stars?

GNPC’s decision to sponsor the Black Stars was heavily influenced by the then president John Dramani Mahama. To affirm this, the deal was even announced to the press by the president himself, stating that he (the president) had instructed the oil company to divert finances to support the Black Stars.

GNPC-GFA Deal (Terms of The Contract)

The Ghana National Petroleum Corporation concretized its decision to be the Headline Sponsor of the Black Stars to the tune of USD 3million each year for a period of 5 years subject to annual renewal

To ensure that this relationship becomes very successful, the two institutions agreed on the following terms of the deal;

- Operate a joint account called ‘The Black Stars Trust’ with signatories from both institutions

- Form a six (6) member Joint Implementation Committee (JIC) (with three representatives from GNPC and three members of GFA) to oversee and ensure the smooth running of activities and furnishing both parties with reports

Why is GNPC decided to become the Headline Sponsor of the Black Stars?

The GNPC explained that, its decision to sponsor the Black Stars was as follows;

1. This sponsorship agreement is in consonance with GNPC’s vision is to be a world class global oil and gas company whose operations have a profound impact on the people of Ghana. This association with the Black Stars underlines the global nature of our common vision of competing successfully on the global stage in a manner that impacts Ghanaians positively and profoundly.

According to Nana Boakye Asafu-Adjaye, Chief Executive of GNPC, “The business case for supporting the Black Stars brand was not a difficult one. The Black Stars are a potent vehicle for projecting GNPC’s brand as a dependable partner in oil and gas exploration globally. The Black Stars are a perfect fit for GNPC. We both aspire to compete successfully on the global stage in a manner that impacts Ghanaians positively and profoundly”.

2. GNPC and the Black Stars are already very attractive brands with common histories; both formed as national vehicles under Ghanaian Management affirming our common belief, as espoused by our First President, Dr. Kwame Nkrumah that the Ghanaian is capable of managing his own affairs. It is noteworthy that at this time of Ghanaian sponsorship, the National Team is coached by a Ghanaian and Managed by Ghanaians.

3. The inspirational power of football is incredible. We therefore want young boys and girls who follow the game and who are looking for role models to see the National Team and its members as such and also draw lessons about good leadership and teamwork from them.

4. The unifying potential of football cannot be over emphasized. This is manifested in the way the whole country virtually comes to a standstill any time the Black Stars engage in an international assignment. Simply put, football is a unifying force to reckon with. And supporting the Black Stars is also a way of contributing to national unity and harmony, ‘a happy nation is a wealthy nation’. GNPC is very proud to be part of this feat.

5. His Excellency the President’s confidence in the Team resonates with us and we expect that with this Headline Sponsorship the Black Stars will “Go for the Gold” at this African Cup of Nations tournament, go beyond the semi-finals in the 2014 World Cup and win the 2015 African Cup of Nations.

Controversies

Despite the Ghana Football Association’s $3m sponsorship a year partnership deal with GNPC for the Black Stars, the association still continue to profoundly rely on government for finances to cater for the team. It remains unclear how much of allocation of the GNPC sponsorship monies goes into Black Stars expenses.

The GNPC deal stipulates that, the company will foot the salaries and other costs of the Black Stars head coach. But even with the case of Avram Grant who was pegged on a $50,000 a month salary, it essentially means that GNPC will doll out nearly $600,00 annually for settling the salary of the head coach. This figure does not add up to a quarter of the 3 million a year paid to the GFA.

Both the Ghana FA and GNPC have failed to transparently explained how the deal works and which specific areas of the team the sponsorship covers.

Previous sports ministers, notably Muntaka Mubarak, who questioned the mode of application of the Goldfields Ghana Sponsorship in 2009, Mustapha Ahmed, who instructed for all Black Stars sponsorship to be channeled through the ministry, and recently the immediate past sports minister Nii Lante Vanderpuye, who called for a review of the Black Stars deal, all had heated public clashes with the football association.

For instance, in 2014, the GNPC advanced over $2million to the Ghana FA for the Black Stars’ pre-world cup camping and friendly matches. Meanwhile, a Presidential Commissions of Inquiry report revealed that the GFA realised some funds from Fifa match agents who arranged those friendly matches for the Black Stars in the lead up to the tournament in Brazil. Besides, FIFA also disbursed a $1.5m preparatory money to the GFA for same purpose.

This prompted the then GNPC Chief Executive Officer, Alex Mould to call for a full disclosure on a $2m payment the FA.

Ultimately, it still remains unclear, how much of financial allocation goes to the GFA from the GNPC and other sponsors of the Black Stars including Puma and Unibank.

“Waste of Money”

With the turn of a new year and a new administration, there has been pressure from influential quarters of the new government to either review or entirely abrogate the GNPC-Black Stars marriage, with the maojority leader Osei Kyei Mensah Bonsu describing the agreement as a “waste of money”.

The Suame MP reiterated that the Black Stars has become unproductive, therefore urging the government to review its investment into GNPC and suggested that some of the company’s allocation diverted into other productive sectors of the economy.

“We will take a critical look at the money we give to GNPC.” He told Nhyira FM.

“We will make sure we give them the money they need to work but the money that they allocate to the Black Stars does not add up. “They always give the Black Stars huge sums of money but they it always go waste”.

According to sources at the Ministry of Youth and Sports (MOYS), the disbursement of the US$1.5million (which is 50 per cent of the Black Stars deal) to the MOYS will all but end the GNPC’s $3 million-a-year sponsorship, although it will continue to pay the salaries of the national team coach, Kwasi Appiah.

The decision of the GNPC Board to finance sports development was announced in a statement issued by the Ministry of Youth and Sports last Wednesday, confirming the receipt of a communication from the GNPC Board to that effect.