EXPLAINER: All the facts about ¢3billion SML contract with Ghana Revenue Authority


A team of investigators has cast doubt on a multi-billion cedi deal in Ghana to prevent a major revenue leakage in the West African country’s petroleum sector. The revelation was made after the investigators concluded a one-year-long probe into the deal signed between the Ghana Revenue Authority (GRA) and the Ministry of Finance on the one hand and private audit firm Strategic Mobilisation Limited (SML) on another in 2020. 

What did the consolidated contract say?

Under the consolidated contract, SML was tasked to monitor and audit Ghana’s downstream petroleum sector, upstream petroleum production, and minerals and metals resources value chain.

The downstream operations involve converting oil and gas into the finished product. These include refining crude oil, petrochemical plants, petroleum products distributors, retail outlets, and natural gas distribution companies.

According to the GRA, the contract, which was for five years, “was agreed upon based on the performance of SML in monitoring the downstream petroleum sector and the provision of instant reconciliation of real-time data in the sector.”

Findings of the investigators

The investigators revealed that contrary to claims by SML that it had been in the monitoring and auditing business for some years, the company’s first client since its founding is the Ghana Revenue Authority

In a publication made on Dec. 18, 2023, the investigators with The Fourth Estate, the online news portal of the Media Foundation for West Africa (MFWA), revealed that

“the GRA has been the only customer of SML Ghana since its establishment… This means the company was handpicked for the contract through the single source procurement method at the time, and it had no prior experience in the services it claimed to have expertise [in].”

In a banner headline published by the state newspaper, Daily Graphic, SML was reported to have saved the West African nation a whopping ¢3 billion since the start of the contract. However, the investigators revealed the claim was false.

It appears the Ministry of Finance and the GRA were aware the claims were false, for some officials of the GRA said they had confronted the company about its claims of savings and volumes on two separate occasions,” the investigators reported.

The banner headline in State’s Daily Graphic in 2023. Photo source: Daily Graphic

According to the investigators, contrary to claims by the SML that its activities have ensured that the country is not shortchanged in tax payment, it is rather the activities of third-party companies and officials of the GRA who are monitoring key activities in the petroleum sector.

“Third-party companies working with the NPA were responsible for checking dilution, diversion, under-declaration, and other anomalies in the sector.

The Customs Division of the GRA also has officials at the depots and various entry points to ensure that all petroleum products that enter the country are properly accounted for. They do this with independent monitors who police the processes for the owners of petroleum products at various points of the product chain,” the investigators said in their report.

SML Ghana’s response to the report of the investigators

Within hours after the investigation report was made public, SML Ghana refuted the claims, describing them as “misrepresentations, fabricated claims, and a fundamental misunderstanding of their role in Ghana’s petroleum and minerals sectors.”

“SML’s engagement with GRA is solely a risk-reward contract. GRA invests nothing in the entire investment chain. There is no cost commitment from the GRA. SML is not exempted from the payment of duties and taxes,” the statement reads.

In explaining its activities under the contract, SML Ghana said,

“SML installed ultrasonic flow meters to check the volumes of petroleum products loaded at the gantries from the depots to reconcile in real time with the volumes recorded in ICUMS.

This system additionally assures Customs that no loading activities occur in the depot in their absence. The installed metering system is designed to detect and record the movement of petroleum products at the depots.”

The company challenged The Fourth Estate to “produce any contract anywhere that is for 10 years…[and] again, it is not true that SML takes US$100million annually from its contract.”

Response from the GRA to the investigation

In a press release reacting to the report of the investigation published on its website in Dec. 2023, the GRA has defended the consolidated contract awarded to SML Ghana.

“The work of SML over the period has led to a significant increase in the figures reported in the downstream petroleum sector, from an average of 350 million litres per month in 2018 and 2019 to 450 million litres per month from 2020/2021,” Ghana’s revenue body said.

It maintained that the revenue variance gained during two years since SML was contracted “will exceed GHS3billion,” adding, “this performance is attributable mainly to the introduction of ICUMS and SML systems.”

“[The] GRA restates that the consolidated contract, a risk-reward contract, seeks to bring efficiency in Revenue Assurance Services provided to GRA.

“According to the contract, SML is required to provide resources to execute the contract. By implication, SML is not paid if there is no value addition. In short, the principle of risk and reward is the fulcrum of the contract,” GRA said.

Reaction from Parliament

Following the release of the investigation report, Parliament’s Finance Committee recommended that all payments made to SML under the consolidated contract be suspended in Jan. 2024.

The Minority Leader, Cassiel Ato Forson, said their review of the contract showed it required the approval of Parliament under the Financial Management Act, 2016 (Act 921) of Ghana.

“As part of the report, the Parliament of the Republic of Ghana has resolved that the Ghana Revenue Authority (GRA) must immediately stop all payments to SML beginning Jan. 1, 2024.

Again, Parliament resolved that GRA must be aware that the contract that the Ministry of Finance has with SML constitutes a multi-year commitment, and Section 33 of the Public Financial Management Act is clear on the matter that all multi-year commitments must be presented to Parliament for consideration and approval,” he told the press in Dec. 2023.

Mr Ato Forson, who also doubles as the lawmaker representing the people of Ajumako Enyan Esiam Constituency in Ghana’s Central region, noted the contract with SML in its “current shape is not valid and must come to Parliament for approval.”

“It is also important to note that the same Finance Committee working with Parliament has resolved to initiate a probe into the SML. I urge the Committee of Finance to conduct this probe diligently and in a manner that will show transparency,” he added.

Response from Ghana’s Presidency

In a response that has divided opinion in the West African country, President Nana Akufo-Addo has asked private auditing firm KPMG to audit the transaction. 

A statement dated Jan. 2, 2024, said the tax and advisory services firm has been tasked to “conduct an immediate audit into the transaction between the Ghana Revenue Authority (GRA) and Strategic Mobilisation Ghana Ltd (SML), a contract which was entered into to enhance revenue assurance in the downstream petroleum sector, the upstream petroleum production and minerals and metals resources value chain.”

According to Ghana’s Presidency, the auditing firm has two weeks to submit the “appropriate recommendations” to the President.

To speed up the work, the President has directed the country’s Ministry of Finance and GRA to “provide KPMG with whatever assistance they will require for [the] conduct of the audit.”

The two parties to the country have also been instructed to suspend the “performance of the contract, pending the submission of the audit report, including any payments presently envisaged under its terms.”

Opposition to President Akufo-Addo’s intervention

However, the President’s intervention has been widely criticised by some civil society organisations operating in the country.

Two leading organisations in the natural resource sector, IMANI Africa and the Africa Centre for Energy Policy (ACEP), have opposed the selection of a tax audit firm, KPMG, to probe the transaction.

“KPMG’s practice oversight bosses should prudently preserve the firm’s reputation and drop this assignment. This issue is a hot political potato right now. The nature of the allegations requires an in-depth look by state bodies with the right powers and independence. KPMG has neither,” the Vice President of IMANI Africa, Bright Simons, said on X (formerly Twitter).

For the Executive Director of the African Centre for Energy Policy, Ben Boakye, the international audit firm has its “integrity at stake if it accepts this job.”

“It is a client of GRA, and its investigation against the leaders of one of its large portfolios is exceedingly suspicious. Simply unethical,” he said.


It is unclear whether audit firm KPMG will decline the invitation as social and political commentators recommended in Ghana to preserve its “integrity” based on what many have described as a “political potato.”

What is true is that according to the President’s statement, KPMG has two weeks to share its report and recommendation to the political leadership of the West African country, barring any unforeseen circumstances.

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