Ghana National RA Audit Fiasco Enters New Phase

Render unto Caesar what is due to Caesar but what happens if Caesar cannot decide which of his pockets should hold your remittance? What if Caesar has so many expensive calculators for determining what is due to him such that he even spends what he can never hope to collect? It seems Ghana’s national revenue assurance audit continues to be a mess and IMANI (Centre for Policy & Education) is calling it out. Since 2014, two different regulators in Ghana i.e. the National Communications Authority (NCA) and the Ghana Revenue Authority (GRA), have been at loggerheads over which of them has the mandate to authorise the delivery of services that are intended to monitor call data records. Incredibly, this long-running fiasco has now become even worse.

To understand the scale of the mess in Ghana, let us revisit the history.

  • 2010: Subah Infosolutions Ghana contracted by GRA to oversee RA from telcos to ensure correct taxes are remitted especially with regard to the surtax on international inbound call termination (SIIT).
  • GHC 75mn (USD 16.3mn) paid to Subah under mysterious circumstances. There was little to no work for some time… although finally Subah implemented some sort of system.
  • 2015: NCA decides it is going to create an Interconnect Clearing House (ICH). This would help in the accounting of SIIT returns which were being bypassed through SIM box fraud. The government estimates revenue losses of up to USD 5.8mn from the menace of SIM boxes. The taxpayer foots another bill of GHC 40mn (USD 8.7mn) payable to Afriwave Telecom Ghana.
  • 2016: GRA renews contract with Subah.
  • Immediately afterwards, NCA directs mobile operators to disregard data requests from Subah for revenue assurance solutions.

Now there is a twist. Apparently, in December 2017, a firm by the name of GVG/Kelni came into the picture. NCA awarded this company a contract for “design, development and implementation of a common platform for traffic monitoring, revenue assurance, mobile money monitoring and fraud management.”

Some deal this was! One cannot help feeling sorry for the taxpayers in Ghana.

…contract upon signing stipulates that a payment of USD 1,491,225 be paid monthly for a 5-year period, amounting to a total of USD 89,473,500. Per the stipulations of the contract, which was signed in December 2017, the monthly payments are supposed to begin not later than 30 days after the contract was signed.

IMANI Africa President, Franklin Cudjoe, observes:

There has not been any defined and clear performance parameters set for the contracts related to Subah and later Afriwave, and it is therefore very difficult to decipher whether their services provide value for money. Indeed, there has been no such report of underperformance by the stakeholders that contracted Subah. The issue then is, why did the Ministry of Communications go ahead and sign a new contract under the name of a common monitoring platform for a service that is already being rendered under an existing contract by a fellow government agency?

In a sense, there is little about improving revenue collection in the programs that the regulatory bodies in Ghana are running. The only revenue we can talk about relates to the vast amounts of money being paid to these consulting firms that promise the government heaven. If the usual games that accompany such deals are at play, it would be a fair bet that this gravy train is probably helping lots of “big and influential people”.

The news article concludes:

Inasmuch as the nation needs revenue, there should be coherence as to the appropriate methodologies implemented to ensure policy coherence and a stakeholder based approach to telecommunication policy. We note with a lot of worry that decision-makers have not learnt the lessons of past contracting activity with regards to dealings with telcos. This, together with the opaque nature of contracting will lead to bigger problems down the line.

Communications Minister Ursula Owusu Ekuful (pictured above) issued a statement explaining the contracts with Subah and Afriwave had been terminated, leading Kelni-GVG to be installed in their place.

The Ministry of Communications would like to assure Ghanaians that the necessary due diligence was carried out during the processes that led to the selection of KelniGVG. A lot of care was taken not to repeat the mistakes of the past.

The contractual obligations of the parties are clearly defined. KelniGVG has issued a performance bond to demonstrate its commitment to deliver the Solution to meet the requirements of the Implementing Agencies (GRA and NCA). Under the BUILD, OPERATE, MANAGE and TRANSFER model, the contract signed has a clear roadmap and deliverables. The installation of the Common Platform is in progress and the Central Monitoring System is fully equipped. The Installation is expected to be operational before the end of July 2018…

…The government is committed to transparency and the provision of the necessary protection for every Ghanaian in the use and verification of their hard-earned Cedis, so, that we may as a nation reach the target of self-sustenance, taking Ghana Beyond Aid; by plugging all leakages and diversion of our revenue. As the President has said consistently, THIS IS NON NEGOTIABLE.

The government says the new deal will save money, because the payments to Subah and Afriwave previously totaled USD 2.6mn a month, whilst the new contract with KelniGVG will ‘only’ cost USD 1.5mn each month. That may be true, but why are they comparing the cost of the one new supplier to the unnecessary duplication of work involved in having two separate contracts with two separate suppliers? Given the costs, the government should be telling the public how much additional tax revenue they expect to receive, not talking about the costs involved in programs which they dismiss by stating “the government of Ghana was also paying both entities essentially for no work done”. Who really is benefiting from all these audit programs? Certainly, it is not the ordinary Ghanaian walking on the streets of Accra.

Joseph Nderitu
Joseph Nderitu
Joseph Nderitu is a consultant who specializes in revenue assurance. He is currently contracted as Head of Revenue Assurance and Fraud Management at Vodacom's operation in Tanzania, having previously served in the same role at Vodacom Mozambique.

Before his work with Vodacom, Joseph was an internal audit manager for Airtel, with responsibility that covered their 17 countries in Africa. Whilst at Airtel, Joseph led reviews of the Revenue Assurance, Customer Service and Sales & Marketing functions.

Prior to his stint at Airtel, Joseph was an RA manager at Safaricom in Kenya. He holds an MSc Degree in Information Systems.