DIC fails to retrieve $21.3 million from sale of 5 SOEs to individuals

Mr Seth Terkper,Minister of Finance and Economic Planning (8)The Divestiture Implementation Committee (DIC), has failed to retrieve an amount of US$21.3 million and GH¢4 million from the sale of five state owned enterprises to private individuals and institu-tional investors.

The assets were sold between 2009 and 2013 at a total cost of US$30.7 million and GH¢6 million, but less than 30 per cent has so far been retrieved.

Even with the payments made so far from the divestiture, no amount has been transferred into the Consolidated Fund as required by the Financial Administration Act. 

This came to light when the Minister of Finance, Seth Terkper, appeared before Parliament yesterday to respond to a question filed by Mr. Osei Bonsu Amoah (NPP Akuapim South)

Mr. Amoah asked the Finance Minister to furnish the House with the number of state owned enterprises divested since 2009, and the details of the divestiture.

The Akuapim South MP, in a supplementary question, also questioned why the government, contrary to Section 10 of the Financial Administration Act, had not made any payment into the Consolidated Fund.

The companies are Tema Printing Press, Ghana Consolidated Diamond Company, Subri Industrial Plantation Limited, GIHOC Footwear Company Limited, and GAMA Film Company Limited.

Mr. Terkper explained that the Tema Printing Press was divested for a purchase price of US$3 million, out of which US$1.1 million had so far been paid, leaving a balance of US$1.9 million.

“A total of US$3.2 million out of a purchase price of US$17 million for the Ghana Consolidated Diamond Company has been paid,” he said.

“Mr. Speaker, Subri Industrial Planation Ltd. was sold for US$10 million with US$5 million paid. GIHOC Footwear Company Ltd was divested to a joint venture for US$700,000, out of which US$70,000 has been paid, leaving a balance of US$630,000,” he said.

On the divestiture of the GAMA Film Company Limited, he said the company was sold for GH¢6 million with GH¢1.6 million paid, with a balance of GH¢4.4 million.

He said the board of the DIC had directed the secretariat to present a recovery plan for all outstanding amounts and added that the amounts would be paid into the Consolidated Fund.

Mr. Terkper also answered questions on whether the government made allocations in the 2014 budget to subsidise petroleum products, and indicated that the policy direction on petroleum subsidies in the budget was to adopt the automatic petroleum price adjustment formula.

He said the government planned to adjust petroleum prices at regular intervals to minimise the adverse impact that the subsidies would have on the budget, business operations and consumer activities.

“In the original 2014 budget, an amount of GH¢50 million was estimated to be spent on petroleum subsides. As a result of the delay in the adjustment of petroleum prices in the early months of 2014, subsidies accumulated and the supplementary budget made provision for an additional amount of GH¢277.6 million to cater for the subsidies,” he said.

Mr. Terkper said a total allocation of GH¢327.6 million was made in the 2014 budget for petroleum subsidies.

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