Q. When is an audit not an audit?
A. When a business that claims to be ‘sponsored’ by the International Monetary Fund, the World Bank and USAID says it found a 30 percent shortfall in taxes paid by MTN’s network in Ghana across a period of 4 years, only for the national tax authority to withdraw that claim just one month later.
The mystery surrounding this ‘audit’ deepened when the auditors appointed by the Ghana Revenue Authority (GRA) tore down their own website and refused to answer any questions from journalists investigating who they really are. It escalated last month, with the Chairman of the Public Accounts Committee of Ghana’s Parliament, a member of the opposition National Democratic Congress (NDC), demanding that the GRA provides evidence of an actual contract between the GRA and the auditors. Last week the GRA issued a press release defending their appointment of the audit firm, though it was clear that they were trying to reveal as little information about the auditors as possible. Is this another example of an African government attempting to extort money from international comms providers, except that it backfired because of the incompetence of the shakedown artists hired to do their dirty work? It certainly seems that way…
The story begins at the start of the year with the GRA issuing an eye-watering GHS8.2bn (USD730mn) bill for back taxes supposedly owed by MTN Ghana for the years 2014 to 2018. As reported by numerous outlets, including international news organization Bloomberg and intrepid local reporters TechFocus24, the tax bill was based on CDR analysis performed by a business called Safaritech Ghana Limited. The audit findings of Safaritech Ghana conflicted with a separate assessment performed by KPMG, one of the big four global accounting firms, but GRA decided to ignore KPMG and to place their trust in Safaritech Ghana.
Three weeks of negotiations followed, by which time the GRA ripped up their tax bill. MTN Ghana issued a simple statement to say the bill had been “fully withdrawn” but no further explanation was given for why the GRA reversed their decision. It is understandable why MTN Ghana would not want to dwell upon it. But the scale of this reversal prompted concern and confusion, and TechFocus24 was especially determined to learn more about Safaritech.
You might think it would be easy for journalists to learn about an audit company with the connections to compete with KPMG and the skills to deliver a technical audit that discovered billions of dollars of revenue which previously went unreported. But they could not. Safaritech had a website that claimed links to some of the world’s biggest aid donors, yet the company and its website disappeared overnight. The website at safaritech.biz was replaced with a generic holding page, but not before the journalists had obtained cached versions to aid their investigation.
Safaritech Ghana described themselves as a subsidiary of a Kenyan business with headquarters in the United Kingdom. They claimed to have experience of auditing telcos in 31 different countries since their formation in 1998. But the UK company was just an empty shell, an entity which had been registered with the UK authorities but used a series of virtual addresses and had only GBP100 (USD130) in their bank account. That UK entity was dormant in 2018, when Safaritech Ghana is said to have signed their contract with GRA, and it was eventually dissolved in 2021.
Not much can be learned about the Kenyan company either. What is certain is that a Kenyan consultant called Andrew Gathuo Chege is associated with the business. Chege was one of only two Directors of the UK entity and an Andy Chege was named in the contract that the GRA eventually shared with the Public Accounts Committee. There is a Kenyan consultant with that name listed on LinkedIn, but that person’s profile says nothing about working with a multinational audit firm called Safaritech. It does say he worked for the Kenyan Revenue Authority from 2003 to 2019, and that he previously worked as a Systems Analyst at Kenya Posts and Telecommunication Corporation. If that LinkedIn profile is accurate, Chege was still working for the Kenyan Revenue Authority when Safaritech Ghana signed its contract with GRA in July 2018.
I had been waiting for the determined reporting of TechFocus24 to get to the bottom of this story, but the obfuscation of the GRA has delayed progress. After months of persistence, TechFocus24 finally embarrassed GRA into issuing a press release which defended their appointment of Safaritech. As reported by Samuel Dowuona on behalf of TechFocus24, GRA said they had performed ‘due diligence’ on Safaritech but gave no specific details about the checks they ran or who Safaritech is.
The Ghana Revenue Authority (GRA) has taken notice of various media discussions on its engagement of Safaritech Ghana Limited and wishes to clarify issues for the information of the general public, especially its esteemed stakeholders…
…In the specific case of Safaritech Ghana Limited, (SGL) GRA took reasonable and appropriate steps to satisfy all legal requirements to procure the services of SGL to carry out forensic audits on telecommunication companies in Ghana among other services.
GRA further sought the necessary buy-in and acceptance of its Top management and Board of directors before obtaining approval from the Public Procurement Authority (PPA) to use the single-source procurement method for the engagement of SGL in accordance with Section 40 (1) (a) of the Public Procurement Act 2003, (Act 663) as amended.
Dowuona tears the GRA’s announcement to shreds, noting that:
- Safaritech’s work is described as ‘satisfactory’ even though it led GRA to issue an enormous tax bill that was withdrawn soon afterwards; and
- the statement provides no explanation of who Safaritech is and why the firm was considered competent to do this work.
I wish I could wait longer before running this article, because it would be premature to accuse the GRA of corruption. However, corrupt authorities know that their best tactic is to stall for time whenever evidence of wrongdoing comes to light. The more they delay, the likelier that their opponents will run out of time and resources to pursue the full truth. My recommendation is to keep following the dogged reporting of this story by Samuel Dowuona and TechFocus24. They may yet solve the mystery of Safaritech Ghana, and increased awareness of scam revenue assurance auditors will help African telcos to push back against relentless government extortion.
