GOV'T IS BROKE ... Banks Refuse Letters of Credit

The Ghana Government is 'BROKE'! HIPC savings or not! And this is the cause of the recent disruption of fuel supplies in the country. According to well informed sources, the technical problem with the pumps at the Tema Oil Refinery, is no new development but has been with the TOR for some time now, forcing the authorities to import refined fuel from outside sources.

However, due to the weak financial position of the Government, none of the traditional commercial banks, as if on cue, for some time now, is willing to establish Letters of Credit to the TOR/Government. The Government, in desperation, had to comb round, in an "SOS" fashion to find "ways and means" to bring down refined fuel, before matters could go out of hand. Meanwhile, desperate attempts are being made by the Government to secure the assistance of VITOL, by renewing its oil-lifting contract with the company.

It will be recalled that VITOL was the company, which was pre-financing Oil lifting when necessary, from our suppliers, until the "descent" of the NPP Administration unto the seat of Government. But, for no justifiable reason, the new Government abrogated its contract with VITOL, describing it as being less beneficial to Ghana. In its place, a new company, SAHARA, with NPP tentacles firmly set in it, was hurriedly set up to virtually play a "supervisory role" in the oil purchase and lifting business between Ghana and Nigeria.

Although there was a general outcry against the deal, fraught with deep suspicion, the President, Mr J. A. Kufuor, claimed his only interest was that of Ghana receiving her oil, regardless of how it is purchased or transported. The deal, which was the first scandal to "herald" the advent of the new administration, has left a dark spot on the image of the Government. The role of SAHARA now is unknown, be it dead or alive. Meanwhile Energy Minister Albert Kan-Dapaah was on air Wednesday to state that the situation at the refinery is now normal.

There "is no cause for alarm", he added. Top officials at the traditional financial houses, when contacted, could neither confirm nor deny the story about their refusal to issue the Letters of Credit to the authorities. But some insiders maintain that the financial situation "is still critical", despite the huge "savings", said to have been made, as a result of the HIPC Initiative which consigned the country into the poverty "bin". In another development, observers are questioning the whereabouts of the of huge fuel reserves said to have been stored as a result of the windfall profit from fuel price increases imposed on Ghanaians when the NPP took office in January 2001.