GNPC to spend $43 million USD on corporate social responsibility – ACEP

The CSR budget of GNPC represents 2819%, 270%, 240%, 629% of the capital budget of some ministries, the think tank has said.

The Africa Centre for Energy Policy (ACEP) is alarmed by the decision of the Ghana National Petroleum Corporation (GNPC) to allocate a prodigious $43 million USD on the corporation’s  social responsibility (CSR) and less on its operational functions.

According to ACEP, GNPC is spending $20 million on its operations in the Voltaian Basin which is less than 50% of the expenditure being allocated on CSR programmes.

“The Corporation plans to spend US$ 43.05 million on corporate social responsibility for the 2019 operational year.”

ACEP stated that spending that much on corporate social responsibility gives a cause for concern particularly, when it is juxtaposed against GNPC’s “operating expenditure beyond the traditional cash call on the producing fields.”

“In 2019, GNPC proposes to spend $20.3 million on its operations in the Voltaian Basin and its subsidiaries in the sector. This is less than 50% of what GNPC wants to spend on CSR,” the energy policy think tank stated.

ACEP raised the concerns in a detailed analysis of GNPC’s work programme for the 2019 financial year.

ACEP believes that the current outlook of GNPC in recent times has become more popular in delivering development projects rather than its core mandate.

“While GNPC, like any corporate entity, has a responsibility towards society, it is unusual for sound corporate organisations to spend more than 10% of its cash flow (not profit) on corporate social responsibility. The Corporation’s CSR expenditure becomes more profound when its CSR budget is compared with the budget of some critical ministries.”

ACEP in its analysis concludes that the CSR budget of the Corporation represents 2819%, 270%, 240%, 629% of the capital budget of the Ministries of Justice and Attorney General, Energy, Agriculture and Finance respectively.

“In relation to the total budget of the mentioned ministries, GNPC’s CSR budget represents 210%, 254%, 47%, and 65% respectively,” ACEP added.

ACEP is therefore urging Parliament not to support and approve the CSR budget proposal of GNPC.

“Parliament should not approve any CSR budget for the Corporation until the end of the fifteen-year financing window provided in the PRMA has elapsed. This should free up funds for the Corporation to deliver on its core mandate as an upstream oil player,” ACEP stated.