GNPC’s illegal loan of $700 million

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PNDC law 81, passed in 1982 allows Cocoboard to go on the international market, without recourse to parliament, to borrow for their operation which is largely limited to purchasing of cocoa from Ghanaian farmers for export. This law allows Cocoboard to leverage the cocoa purchased from farmers against the loan by way of collateral, with prior approval of ?secretary for finance?.


However, each time Cocobaord had gone onto the international market to secure what is known as ?cocoa syndicated loan?, they have found it prudent to secure parliamentary approval.

Again,PNDC law 64 section 15, passed in 1983 empowers GNPC to go onto the international market to secure loans for its operations, subject to prior approval of the ? finance secretary?s and tied to a collateral.Now,this law was promulgated at the time Ghana was under a military despotically despotic despot, with no parliament.

This is why the law talks about the authority of ?secretary for finance?s? approval being sought. However, Ghana is now under a democratically democratic democracy with stratified governance structure of executive, judiciary and the legislature firmly in-place. We also have ministers superintending our sectors of the economy, with the concept of ?secretaries? as heads of sectors of the economy now becoming defunct.

And as captured in the 4th republican constitution of 1992,in article 181 clause 3,mandates all foreign loan agreements being contracted in the name of government of Ghana, to obtain parliamentary approval.

Consequently, this law the GNPC is currently desperately hanging onto and belligerently seeking to secure a loan of $700m is completely invalid, belatedly outmoded and vividly void, as it has been clearly captured in the 1992 constitution that ?any law which is in contradiction to the 1992 constitution shall be considered null and void?.

But against all the warnings being issued by well-meaning citizens of this nation, GNPC is blind-folded going ahead to contracting this loan based on a PNDC law 64 section 15 which was passed in 1983 which allows GNPC to secure loans with prior consent of only the ?secretary of finance? and use its share of oil from our oil find.

But GNPC is a state institution whose assets belong to the state so GNPC has no oil of its own, and as a result, when GNPC secures a loan but defaults on payment, then, the government of Ghana will be required to step-in and clear the mess.

So, the argument being advanced by Alex Mould to justify the legality of GNPC?s power to secure such gargantuan loans, based on a PNDC law which clearly is null and void, presently, is an act of purely pure purity of an illegally illegal illegality which can potentially land him in prison, for decades, when ndc is no longer in power and the tacit support of government to embolden him to embark on such recklessly reckless recklessness is no longer at his disposal.



Justice Abeeku Newton-Offei

(Executive Director)

Center for Media Policy

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