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The Energy Minister Boakye Agyarko has served notice that days when the Ghana National Petroleum Corporation (GNPC), was used as a cash cow are over.
“It had a solid balance sheet and that balance sheet was leveraged to support other government entities in providing either guarantees or limited liquidity for specific purposes.
“So in the past, you have a situation where ECG, for example, couldn’t raise guarantees A&B on some of the emergency power plants and therefore the resort was to GNPC’s balance sheet as a government entity.
“From my own perspective I think it is not a healthy practice simply because the co-mingling of assets from different entities raises certain contingent liability issues that may not be easily addressed legally,” he said Monday when he appeared before the Public Accounts Committee of Parliament (PAC).
It was revealed at the sitting that the GNPC is unable to account for over $70000 dollars in its audited account for 2015.
Commenting on the development, Mr. Boakye advocated that “since these balance sheets are autonomous in their entities we stay away from cross leverage.”
Nonetheless, he said if the energy sector needs collateralization or leveraging, the transaction must be properly structured as a financial transaction rather than instruction to leverage.
“Instead of a minister or some authority instructing GNPC to go proceed and to do something, I think we should stay away from that.
“We should encourage or rather develop a situation where each entity stands on its own and finances its activities so that we can determine the viability of each entity without cross leveraging,” he stated.