May, 2024

The Supreme Court of Ghana has, in a landmark decision in Elikplim Agbemava v. The Attorney General, affirmed the legality of section 10(15) of the Petroleum (Exploration and Production) Act, 2016 (Act 919), which provides that all loans exceeding the cedi equivalent of US$30 million for the purpose of exploration, development and production must be approved by parliament.

Background

The Plaintiff sought a declaration that under that Article 181(3) of the 1992 Constitution, all public institutions or corporations, including the Ghana National Petroleum Corporation (GNPC), are required to submit all loan applications to Parliament for approval since the government was the majority shareholder in most of these corporations. The said article provides that:

“No loan shall be raised by the Government on behalf of itself or any other public institution or authority otherwise than by or under the authority of an Act of Parliament.”

Difference between Government & GNPC Loans?

The Attorney General’s stance was that Article 181 (3) of the 1992 Constitution pertains to loans raised by the government for itself or public institutions, not loans obtained by GNPC independently. The Attorney General was therefore of the view that loan agreements executed by GNPC for its own purposes without recourse to the government ought not go to parliament.

Conclusion & Implications

The Supreme Court in a unanimous decision, dismissed the suit in its entirety. The seven-member panel, presided over by Chief Justice Gertrude Torkornoo, concluded that GNPC is not required to seek parliamentary approval for every loan, only for those surpassing the specified threshold stated in its enabling statute.

The ruling therefore clarifies the operational autonomy of GNPC – in securing loans up to $30 million without needing parliamentary approval. This decision may also be regarded as setting a legal precedent that distinguishes between loans raised by the government for itself or public institutions and those obtained independently by public corporations like GNPC.