The five-year-old Consolidated Bank Ghana (CBG) is owing the state over GH₡11 billion, according to the Public Accounts Committee (PAC) of Parliament.
At its sitting on Monday, April 8, 2024 the PAC, especially its chairman, James Klutse Avedzi, appeared alarmed over the staggering amounts that entities such as the CBG owed the nation, when officials from the Controller and Accountant General Department appeared before it.
“A company like Mankoadze Fisheries owes GH¢184 million. Tema Oil Refinery, they still owe GH¢218 million; Consolidated Bank of Ghana, they owe over GH¢9 billion. Yes, GCB also owes over GH¢2 billion. Ah, Consolidated Bank again GH¢2.3 billion. Then they owe over GH¢11 billion; anyway,” James Klutse Avedzi said, whilst reading from the Auditor General report.
A-G FINDINGS
Paragraphs 48 to 51 of the Auditor’s report on the 2022 accounts of the government indicated that non-recovery of loan receivables stood at GH¢50,677,171,636.
The Auditor observed that the Controller and Accountant General (CAG) had not implemented its recommendation to recover the debts from the institutions.
The report noted that out of the 310 institutions indebted to the government of Ghana, the CAG was able to recover from eight institutions an amount totaling GH¢13,867,733,821 – representing 27.36 percent, leaving an outstanding balance of GH¢50,677,171,636.00 to be recovered.
“We recommended that the CAG should, as a matter of urgency, adopt a structured approach to recover the outstanding amount of GH¢50,677,171,636.00 from the debtors without further delay, the Auditor General further stated.
MANAGEMENT RESPONSE
The CAG responded that the CAGD and Ministry of Finance have stepped up measures to effectively recover the loan receivables.
As part of the measures, the Government On-lending and Recoveries Committee has been constituted to oversee the recovery and recommend the write-off of nonrecoverable loan receivables in the books as may be appropriate.
“It was through these measures that an amount of GH¢13,867,733,821 was recovered. The Committee is still working towards recovery of the outstanding loans receivable,” the Controller wrote to the Auditor.
EFFORTS
The Chairman of PAC, James Klutse Avedzi, having read the CAGD response that the committee was working towards recovery of the outstanding loans receivables, asked how much had been recuperated since the last audit.
The Deputy Minister for Finance, Abena Osei-Asare, offered an explanation on the basis that the matter had been referred to the ministry. According to her, there were about 18 companies identified and not all are state-owned.
She told PAC that the ministry had written to the Registrar of companies and the state interests and governance authority to know if these companies were still operating, but were yet to receive responses.
She said that when they get feedback and these companies are defunct, the ministry will go through the appropriate procedures to clear them off its books, as was done in 2019.
She said for state-owned companies that are viable, the government will “do the needful” to recover their portions, and for those that are defunct, their assets will be sold to defray the debt.
“And where we cannot find [assets] respectfully, we will come to you and seek your advice on the way forward,” she added.
The Chairman retorted in agreement to the ministry going through the process, but could not understand the reason to offer the loans and wait till the companies could not pay and then they go through the process for Parliament to write them off.“Why do we want to do that? GH¢50 billion can do something for a small community,” he remarked.
RECOVERY
Since the report was put together, GH¢67 million out of the over GH¢50.67 billion has been recovered, the PAC Chairman identified.
The Deputy Minister agreed with the concerns raised by the committee, emphasising that governments over the years have worked to retrieve these monies.
The Chairman disagreed that it was a long time, citing the debts that were written off in 2019, adding that “these ones are current accumulations.”
“Mr. Chairman, it is not current. We can provide you with the information,” the deputy finance minister said.
However, the chairman, who referred to the information in the Auditor’s report, said it did not add the dates.
What is in the report is the balance as at January 1, 2022 and the balance as of December 31, 2022.
“Unfortunately, we don’t have the dates or the age of the debts,” the PAC Chairman said and the Deputy Minister responded, “Mr. Chairman, we will furnish you with some data.”
