On 14th August, 2023, this author received an interesting message from the Fourth Estate, a brilliant project by the Media Foundation for West Africa aimed at enhancing the capacity of journalists in Ghana to undertake socially impactful investigative journalism. At inception, the Fourth Estate was helmed by an award-winning journalist currently on a Nieman Fellowship at Harvard.

Quite apart from the fact that the Fourth Estate is a media organisation one usually takes seriously, many of the causes taken up by activist think tanks like ACEP and IMANI, with which this author is affiliated, often begin as inquiries by journalists seeking research support or as leaks by unhappy insiders unable to go public for fear of retribution.

On this occasion, however, Fourth Estate wasn’t really looking for research support. They just wanted a quote. They had been investigating a tax exemption package granted a hotel project under Ghana’s 1 District 1 Factory (1D1F) policy, and were sure of their grounds but needed someone in the policy space to underscore a point or two in the classic mode of quality journalism.

This author thus faithfully recited the conventional wisdom against the practice of government officials and state institutions taking policies enacted with very noble objectives and bastardising them to suit narrow, parochial, interests. Why should a hotel be granted tax exemptions through a policy meant to industrialise a country? And a very high-end hotel in one of the poshest enclaves in Accra – the Airport Residential Area – saturated with high-end hotels at that?

Incoherent policy execution with wasteful implications is of course a pet subject of this author as any frequent reader of this blog knows. High-end hotels as a special case of this phenomenon pops up every now and then, like bad jokes in a dry tale. Not too long ago, there was a bit of confusion when it came out that the Ghana Infrastructure Investment Fund (GIIF) had pumped millions into a luxury hotel and apartment complex – under the Pullman brand – in the same Airport Residential Area and that the project had stalled with little prospect of recovery of funds within the expected timeframe.

Once again, why on Earth would a country with massive infrastructure deficits in essential areas like water treatment, affordable power provision, arterial road networks etc. spend funds from one of its modest Sovereign Wealth Funds on luxury hotels? Matters would have been left at lamenting policy incoherence with the usual dark undertones of cronyism had the Fourth Estate inquiry not carried an interesting twist: the journalists weren’t even sure that the beneficiary of the 1D1F-based tax exemption, 4-Mac Limited, existed. They couldn’t find any details in Ghana’s corporate register on the entity, nor of any entity bearing the name of the hotel it is building, Le Meridien. For a company deemed worthy of ~$3.919 million (nearly 50 million GHS) in tax exemptions, that felt very odd.

When the first part of the Fourth Estate’s piece came out, the “shady identity” angle was so intriguing that this author considered digging into the affair but, alas, a full plate did not allow. In the second part, however, there was a reference to his suggestion of the possibility of the name used in the Parliamentary proceedings being a “trading” rather than the legal incorporated name, a point disputed by another analyst. So, it was time to dig.

The digging continues, but the mound of dirt piling up is not pretty. First, to clear the issue of the non-existence of the entity. As suspected, it does exist. Just that the Parliamentary records misspelt the name with an extraneous hyphen guaranteeing the kind of results the Fourth Estate got.

4-Mac is actually just “4 Mac”. It is fully owned by a certain Jeffery Amponsah. The only other Director is a Vida Amankwah. Mr. Amponsah has worked closely on the hotel project with one Prince Damptey, the sole shareholder of a kind of general purpose consultancy called, Pridam Investments. Pridam also has only two Directors, Mr. Damptey and Ms. Yvonne Koufie. Messrs Damptey and Amponsah appear to be the driving minds behind the Le Meridien Hotel project, the beneficiary of the sweetheart ~$4 million tax exemption granted by the ever-beneficent Parliament of Ghana.

Le Meridien’s entry into the posher rosters of high-end hotels in Ghana has been celebrated for a while now. Originally billed to open in 2021, the 160-room hotel is now two years over schedule, with substantial works still remaining, and more delays expected. It has become part of a raft of premium hotel properties, representing more than 2000 rooms in capacity, clustered around the same vicinity of Accra. The Hilton. The Protea. The Pullman. The Southern Sun etc. All heavily delayed.

That there is an oversupply of high-end hotels in Accra already, and an even worse oversupply in the pipeline, is reflected in falling revenue per room numbers across the hotel industry in Accra by more than 50% in recent years even as everyone complain about high prices and underwhelming services.

Clearly, what is needed is additional capacity in more medium-range facilities to improve the country’s attractiveness to a wider range of tourists and to exert true competitive pressure on prices in order to boost volumes. Doing that would in turn lift occupancy rates and thus shave off any adverse impact from competition on revenues. Ghana’s own strategic tourism plan sees things this way. And, yet, here is the government breezily dispensing additional incentives for the building of high-end hotels. And a pliant Parliament rubberstamping each such request brought before it. But back to 4 Mac/4-Mac.

The founder and owner of 4 Mac – the entity at the center of the Fourth Estate investigation – is not one of the famous entrepreneurs hogging the limelight on tabloid pages in Ghana. But he is a wizened operator, a crawler in the dark underbelly of public sector contracting in Ghana. In addition to 4 Mac, he also owns Byes and Ways. Both 4 Mac and Byes and Ways are based in Ghana’s second city of Kumasi, away from the prying eyes and wagging tongues of Accra. Both entities are regularly in conflict with Ghana’s Auditor General.

In 2016, the Auditor General insisted that it could not find evidence by way of documentation, like waybills and invoices, to support liabilities purportedly owed to 4 Mac to the tune of 21.7 million GHS (local Ghanaian currency units) in connection with a 50.24 million GHS (~$13 million then) contract and was therefore rejecting them. The management of the Ministry of Energy, which had issued the said contract for 4 Mac to supply electricity poles, insisted that, notwithstanding the lack of documentation, the liabilities were not only valid but were actually 10 million GHS higher.

In the same year, state auditors flagged a purported debt of ~822,000 GHS arising from what Byes & Ways, the sister company of 4 Mac, was said to be representing as exchange rate losses due to the time gap between contracting and execution. Except that the ~8.3 million GHS contract for wooden poles had been a Cedi (local currency) contract so any talk of forex losses was pure artifice. Having been caught out so glaringly, the Ministry’s mandarins backed down.

In 2018, things came to a head when state auditors once again flagged a 28.4 million GHS debt attributed to Byes & Ways by the Energy Ministry. The auditors had, after some sleuthing, discovered that about 90% of the supposedly outstanding amount was actually effected in December 2016 and, thus, the Energy Ministry’s demand for funds from the Finance Ministry in June 2017 to clear the said debt was pure contrivance. The issue having blown over into the press, the owner of Byes & Ways/4 Mac made a ballistic entry to deny his company’s awareness of these claims being made on its behalf. With the posture of a martyr astride a cross, he demanded a judicial inquest. Needless to say, the matter died a quiet death.

Another fascinating episode involving the 4 Mac crew is the intriguing exchange of 1.1 acres of highly valuable land in the plush Roman Ridge area belonging to the Ghana Library Authority for 1.068 acres of land of far lower pedigree in the Oyarifa area belonging to Byes & Ways. Crude estimates of the difference in value placed the loss to the state in the region of more than 2 million dollars. After much huffing and puffing, that matter also lost steam.

All the above points to a worrisome intertwining of narrow private commercial interests and public sector contracting characterising deals involving the 4 Mac – Byes & Ways twin-entity.

Admittedly, seeing a long list of controversies around public money linked to a company that has been granted an incongruous benefit by Parliament at the expense of the state would bias even the most objective reviewer, but we were determined to examine the tax exemptions granted 4 Mac on their merits.

Unfortunately, it is hard. The justifications provided by the Parliamentary Committee for the ~$4 million were just plain ridiculous. Their sheer incongruity makes it impossible, however much one tries, to grant the decision any merit at all. For the reader’s benefit, the entire text is reproduced below.

In short, Parliament has decided to grant a massive tax exemption because the hotel is a “strategic investment”. But why? What makes it strategic? Absolutely nothing was said to validate the claim, except some half-hearted comments about employment generation in another part of the record of proceedings. By the job creation measure, literally every kiosk, okro farm, washing bay and petrol station set up anywhere in Ghana is a “strategic investment” on some defensible scale.

Of the list of 1297 items to be imported by 4 Mac in financial year 2022/2023, for which duty and taxes have been waived by Parliament, our analysis suggest that more than 70% probably shouldn’t be imported by any entity truly desiring to strategically create jobs in Ghana. They include pantry mops, fly killers, kitchen cabinets, glass doors, wall shelves, hand basins, sinks, Mosaic tiles, porcelain wares, etc. etc.

Think about it. The Parliament of Ghana grants tax waivers of ~$4 million to a company under the country’s flagship industrialisation policy (1D1F) so that they can import sliding aluminum doors, handrails, tiles, wallpaper and specialty flooring.

Not to forget toilet-roll holders and soap dispensers!

What is even more bizarre about the entire spectacle is the timing. The request for tax waiver was presented to Parliament in July 2022. Throughout the period it was traversing the bureaucracy there, the country was in the throes of a debilitating balance of payments crisis partly occasioned by the scarcity of dollars. The government, furthermore, was in tough negotiations with the IMF, during which, for the umpteenth time, tax exemptions and other anti-revenue practices were under discussion. Yet, here was the national Parliament, at the instigation of the Ministry of Finance, granting tax waivers so that an aspiring hotelier could import “back of house shower enclosures” with scarce dollars without paying duty.

Meanwhile, the government was promising things like the below to the IMF.

What is the point, seriously, of all this report-publishing and tap-dancing around the issue in successive IMF programs if no one really intends to stop abusing the use of tax waiver provisions to enrich favoured business people?

This is what the IMF said on June 30th, 2015, when its team visited Ghana to review the country’s previous program:

The team notes, however, that more needs to be done to further enhance tax administration and eliminate tax exemptions to improve the revenue performance over the medium term.

This is what it said on 10th February 2017 during another mission:

The new government’s intentions to reduce tax exemptions, improve tax compliance and review the widespread earmarking of revenues should help in this regard.

This is what it said on 19th July 2021:

Measures that could be implemented relatively quickly include rationalizing VAT and import duty exemptions


In the meantime, the authorities could proceed to remove non-standard statutory VAT and import duty exemptions, particularly those that disproportionately benefit higher income groups

The reader would no doubt have guessed that this is a song that has been played from the remotest antiquity. Here is the IMF again on 14th April 1999:

Revenue is projected to rise to almost 19 percent of GDP, driven by the curtailment of tax exemptions and improvements in administration, including the introduction of the VAT and the taxpayer identification system.

The reader must be getting the picture by now. But even assuming that politicians in Accra never really take these commitments seriously, it is still valid to ask if the IMF itself does.

Well, there is something even more pernicious at work. The government has indeed been removing tax exemptions. Just not from favoured business people. For ordinary entrepreneurs and other business actors, however, the IMF commitments are indeed relied upon to deny tax incentives critical to their ability to grow, all the better to create room for favourites and cronies to benefit.

For example, the Ghanaian Chamber of Agribusiness blame the refusal of the authorities to grant tax-based incentives for critical imported inputs and machinery for declining productivity in the agroprocessing arena, notwithstanding agroprocessing being a clear 1 District 1 Factory priority.

Farm mechanisation inputs and industrial juicing equipment are stuck at the ports even as rich wannabe hoteliers get millions of dollars in tax exemptions to cart in their precious porcelain massage beds from Milano.

Such genius moves! Such impeccable style!

[This short essay is a preliminary response to a report issued yesterday by a Ghanaian parliamentary committee in connection with a joint IMANI – ACEP investigation of a sweetheart gas deal between Ghana’s national oil company, GNPC, and a private company called, Genser.]

As everyone now knows, Ghana is in the throes of full-blown national bankruptcy. Unable to pay its debts, the government has reached out to the IMF for a bailout program. Central to that program is an effort to dial down the rate at which the country is accumulating losses in its energy sector due to waste, mismanagement and cronyism. The World Bank, which is playing tag team with the IMF on the salvation plan, also has energy sector waste and inefficiencies in its sights. Analysts believe that energy sector liabilities are on course to eventually hit $12.5 billion, more than four times the size of the ongoing IMF bailout. One group within the value chain, independent power producers (IPPs), are already owed nearly $2.3 billion.

When analysts at IMANI and ACEP saw evidence that a private sector operator called, Genser, had secured a deal to obtain gas at a price less than 40% of what the seller, Ghana’s national oil company GNPC, itself says it costs to obtain the commodity, they naturally decided to dig into the legal agreement since it is of such wasteful stuff that the bigger mess has been created. It was later discovered that another agreement had been signed that will bring total discounts to nearly 75% of the commodity value. After a thorough review of the evidence, and extensive interactions with their sources, IMANI and ACEP analysts published a series of essays criticising the arrangements and demanding urgent redress.

A few months following the publication of the IMANI-ACEP concerns, the select committee in Parliament responsible for the mining and energy sectors decided to hold hearings on the matter.

First to be called on 27th September 2022 was the GNPC. Subsequently, on 18th October 2022, a representative of IMANI and ACEP appeared before the committee. It was apparent from the outset that the ruling party’s representatives on the committee had made up their mind on the issues. For example, they spent an hour quarreling with the representative over the meaning of the “sweetheart” term used in the two organisations’ description of the gas deal. Then the rest of the time interjecting and openly attacking the position of the representative, the very witness they themselves had invited to ostensibly get to the bottom of the issue.

In hindsight, IMANI and ACEP should not have participated in these prejudicial proceedings at all. The committee sittings lacked even the most rudimentary elements of due process. There were no clear terms of reference. No proper concept note had been prepared in advance to outline the areas of contention and expected outcomes. No briefings were circulated to witnesses ahead of time to pinpoint matters of emphasis and thus to aid preparation. At any rate, rather than the typical question and answer format of a serious parliamentary enquiry, the exchanges mostly ruling party representatives on the committee chastising the IMANI-ACEP representative for the organisations’ views and he, in turn, holding his ground. Nothing by way of serious effort to elicit insights.

Many months after the committee sittings, word reached the two Civil Society Organisations (CSOs) that the chairperson of the committee was doing everything possible to ram through a version of the report cobbled together solely to whitewash the Genser gas sweetheart deal, and was facing resistance from minority/opposition members of the committee. Unable to obtain consensus, he finally decided yesterday, the 16th of August 2023, to release the report anyway, with a half-hearted concession to the fact of it not being a product of committee consensus.

The report itself turned out to be a rather sad excuse of technical writing. The ranking member of the select committee immediately disassociated himself from the document in its entirety, lamenting the “factual inaccuracies“, “baseless assumptions” and facile conclusions on the central “value for money” issue.

Before delving into the embarrassing details, the reader is reminded of the primary basis of the original concerns raised about the GNPC-Genser sweetheart gas deal: the overpowering musk of regulatory and state capture, the suspicions of insider dealings, and the strong sense of collusion against the interests of Ghana by those who should hold fealty to Ghana’s cause. Now, to the committee “report”.

The 16-page document starts with the customary recapping of the events leading to the committee’s decision to intervene. It then lists the organisations invited to provide evidence and the scanty set of documents relied upon. As if in a hurry to get to its preconceived conclusions, the report then rushes through the evidence, often devoting just two or three sentences to the testimony given by the invited organisations, completely ignoring the vast majority of the highly technical materials and deliberations submitted by the few key expert witnesses it deigned to call. Below, the reader is invited to consider the recounting done of the hours of careful breakdown analysis presented by two important state-owned organisations, Ghana Gas and the Volta River Authority (VRA).

Extract from page 4 of the committee’s report on the GNPC-Genser gas deal

With breathless enthusiasm, the report’s drafters then settled on the highlight of their show: the “findings of fact”, except that this section is actually riddled with confusing premises and inferences as well as a partial reporting of arguments between different members of the committee. Everything but actual facts.

In fact, apart from the two organisations at the center of the impugned deal – Genser and GNPC – no testimony produced during the entire deliberations backed any of these “findings of facts”, much less the hasty conclusions of the committee. Both VRA and Ghana Gas essentially vindicated the positions canvassed by IMANI and ACEP. The invited regulators, namely the Public Utilities Regulatory Commission (PURC), refused to be drawn into the fray by suggesting that the deal between the state-owned GNPC and Genser occured outside their purview, in the “deregulated market”, whilst the Energy Commission was either not invited or refused to appear. The Energy Ministry, on its part, denied all knowledge of the commercial details of the transaction.

Extracts from pages 5 & 6 of the committee report

In order not to bore the reader, we will focus on the whitewashing attempts and expose the hollowness of the committee’s work in that regard since these elements most affect the public interest.

At the heart of the IMANI-ACEP case is the simple fact of gas being underpriced by a state-owned producer, GNPC, to the benefit of a favoured private operator, thereby generating losses to the detriment of Ghana, a country saddled today with crippling energy sector debts. As has been explained several times, the GNPC itself has represented to regulators that it cost it on average $6.5+ to obtain a unit of gas.

Extract from GNPC presentation to the PURC on 20th April 2022

It does not matter that some sources are cheaper than others. In commercial analysis, its weighted average cost should guide how it prices the product for onward sales. Observe carefully that the weighted average cost indicated is for the commodity itself, and that costs for logistics/transportation, such as gas pipelines are presented differently. The raw cost of the gas is what is referred to as the “commodity cost”.

Given this fact, why would GNPC agree to sell the gas to Genser for $2.79 per unit, and commit to a further downward revision to $1.72 per unit in the near future? This was at the core of the IMANI-ACEP complaint.

After its pretend-analysis, the committee concluded that this is not an issue because GNPC is also benefiting from Genser by using Genser’s pipelines. No attempt is made to explain how come Ghana Gas was able to secure much higher prices from Genser just before the switch to GNPC without any significant general shifts in market pricing. Why did the so-called pipeline services not matter in the prior arrangement with Ghana Gas?

Comparing Ghana Gas vs GNPC pricing over relevant crossover periods

To get to the bottom of this trickery, one must unpack the justification produced by Genser and endorsed by the committee.

Extract from page 8 of the committee report

In simple terms, the gas ought to cost Genser $6.08, however, Genser has provided a pipeline for the use of GNPC and charged $3.29 for it. Thus the net effect on each unit of transaction is a discounted final price of $2.79 per unit of gas bought. There are a million and one reasons why this explanation makes no sense, quite apart from the total lack of interest on the part of the committee to take and review testimony of pipeline ratemaking methodologies, value for money, and gas trading best practice.

First, the netback is tied to each unit of gas sold to Genser itself not necessarily to volumes of gas belonging to GNPC that transits through the Genser pipelines, potentially for sale to third parties. There is absolutely no evidence before the committee of GNPC using the pipeline to transmit any gas to any customers other than Genser on which it may have made money by charging those customers the transport tariffs that would have otherwise gone to Genser were it not for this strange barter trade.

Second, the $3.29 cited comprises costs for transiting gas through both trunk and branch pipelines. What is crazy about this arrangement is that Genser’s pipeline complex has been designed to enable Genser deliver gas it has bought from GNPC to its own customers. They are effectively Genser’s distribution network. Whatever investments Genser has made into those pipelines are amply recouped from transport margins embedded in the final power prices Genser obtains from its predominantly goldmining customers. What exactly is the business of GNPC subsidising the pipelines Genser has built to enable it operate its business model?

Third, building on the previous point, GNPC’s responsibility as a bulk seller is to deliver gas to Genser at a transmission terminal, or, as they say in the parlance, a metering and regulation station. The pipelines leading to that terminal would be GNPC’s responsibility. Indeed, GNPC utilises public owned infrastructure to deliver gas from their ultimate source to this point of contact with Genser’s pipelines. The transportation costs of that phase are not accounted for anywhere in the model being championed by the committee. The logic being forced on the nation is that after taking delivery of the gas and transporting it through its own pipelines to locations of its own choosing, Genser must now be compensated for the trouble. This is akin to a trader from Techiman asking for a 60% discount on goods brought from Tema port and on sale in Kumasi because, in her view, she needs to offset the cost of the vehicle transporting the goods to Techiman.

Fourth, the committee, in its haste, in its total disregard for fact-based technical analysis, and in its burning desire to “save Genser and damn the CSOs”, decided to rely entirely on hypothetical data and scenarios of what GNPC stands to gain if it utilises the so-called reserve capacity in Genser’s pipelines.

Extract from page 11 of the committee report

Note that all this is hypothetical stuff. The committee cannot evade the basic question: on what basis was the $3.29 pipeline tariff (which has been used to discount the acknowledged real price of $6.08 per unit of gas) computed, and by what process was it determined to be fair when as presently configured the Genser pipelines simply represent the downstream distribution network of company based on current customer locations? How much do other gas wholesalers with pipelines charge for pipeline transportation? And why wasn’t real market data used to benchmark the $3.29 figure? Has GNPC ever transported volumes of gas sufficient in value to offset the tens of millions of dollars of discounts obtained by Genser since 2020?

As analysts have already argued, Ghana Gas has the largest pipeline network in Ghana, and its average transportation tariffs on pipelines with a greater combined length than Genser’s fall below the PURC regulated threshold of $1.288.

Thus, even if one were to grant the preposterous contention that Genser needs to be compensated for using its own distribution pipelines to transport gas to its own customer sites to generate power, there is no reason why the net back charge shouldn’t be, say, $0.919, as Ghana Gas prices transmission on some of its major routes, rather than the $3.29 preferred by the committee.

The argument that GNPC has been saved cost because it is not delivering the gas to plant gate using its own infrastructure is, also, wholly bogus since should that have been the case, GNPC would simply have added the transport margin to the price it charges Genser, bringing the cost to nearer $7.1 rather than $6.08.

Fifth, any kind of barter arrangement based on the notion that Genser is a general pipeline transporter capable of delivering third-party gas on behalf of GNPC so that it can offset the resultant charges against the commodity gas delivered to it (whether or not the volumes of gas delivered to it exactly matches those delivered to third-parties) would be based on a patent illegality as Genser does not have the requisite licenses to operate as a general transmission utility. It has been tolerated on the basis of using its own distribution network to service gold mines in the unregulated power sector. The committee, and in particular its chairperson, should not become an enabler of illegal conduct in Ghana’s already fraught energy sector.

To the extent that the position taken by the committee in its ill-timed, ill-judged, and ill-considered report does not have Ghana’s interest at heart, activists will not relent in continuing to cite the GNPC-Genser case as one of the reasons they are highly sceptical of the ongoing IMF/World bank – driven effort to reform Ghana’s energy sector. And, indeed, why they remain sceptical of the viability of the overall undertaking to save Ghana from the bowels of bankruptcy.

It follows clearly from all the preceding analysis that the risk of the GNPC-Genser deal leading to $1.5 billion in accumulated losses is now more elevated than ever due to the ill-advised findings of the select committee’s report. One cannot sugarcoat such an alarming prospect. The only word fitting for the occasion is: unpatriotic. May those whom the cap fit wear it.