SML changed its name from SMEL after PPA refused single-source approval – Report

In the full KPMG report released by President Nana Addo Dankwa Akufo-Addo, it has been revealed that Strategic Mobilisation Ghana Limited (SML) changed its name from Strategic Mobilisation Enhancement Limited (SMEL) after the Public Procurement Authority (PPA) refused to approve the single-source process three times in 2017.

Additionally, the contract's disapproval was because the company lacked the capacity or prior experience in delivering the services - curbing under-declaration, dilution, and diversion of petroleum products — the factors responsible for revenue losses in the downstream petroleum sector.

The report indicated that SMEL, established on February 14, 2017, changed its name to SML on November 22, 2017.

"SMEL was incorporated on February 14, 2017. During the period from June 16 to September 14, 2017, GRA made three (3) unsuccessful attempts to obtain PPA’s approval to single-source SMEL to provide transaction audit services. On November 22, 2017, SMEL changed its name to SML," page 11 of the KPMG report highlighted.

Page 14 of the same report noted that the Ghana Revenue Authority, in 2018, proceeded to award contracts to SML without the approval of PPA.

On June 1, 2018, SML was appointed as a sub-contractor to West Blue Ghana Limited, then a service provider to GRA, to provide transaction audit services for seven months.

"On January 1, 2019, GRA executed, without PPA’s approval, an extended transaction audit services agreement with SML, renewable on a monthly basis, following the expiration of West Blue’s contract and SML’s subcontract agreement on December 31, 2018," it added.

According to the KPMG report, the Ghana Revenue Authority entered into six service agreements with SML, utilizing the single-source method without approval from PPA.

President Akufo-Addo suspended the contracts after The Fourth Estate investigation and tasked KPMG to audit and submit a report.

The contract entered into by GRA and SML was to enhance revenue assurance in the downstream petroleum sector, the upstream petroleum production, and the minerals and metals resources value chain.

SML, after an investigative piece by The Fourth Estate in December 2023, debunked claims of being awarded a 10-year contract duration, insisting that it had been given a 5-year contract instead.

The company further dispelled claims that it takes $100 million annually from its contract.

The Ghana Revenue Authority, in a statement issued on Wednesday, December 20, 2023, also affirmed that its board and management followed the correct processes in procuring the services of SML.

The Fourth Estate also stated that its investigations have disproved wild claims by the SML that it had helped save Ghana billions of cedis that would have been lost in the downstream petroleum sector but for its intervention.

The Finance Committee of Parliament, on December 23, 2023, recommended suspending all payments under the government's contract with SML from 2024, pending a probe into the contract by Parliament.

The committee said, upon a review of the contract, it requires Parliamentary approval under the Financial Management Act, hence the need for GRA to be notified about the statutory requirement.

SA/MA