Osafo-Maafo confirms sale of Tema Oil Refinery

The Minister of Finance, Yaw Osafo-Maafo on Wednesday confirmed speculations that the Tema Oil Refinery (TOR) is to be sold soon but did not indicate to which company.

"No decision has been taken as to which company, local or foreign, qualifies to pick up or join the government and Ghanaians in the ownership of the refinery," he told journalists in Accra.

He said TOR's debt was so huge that it would not be prudent for the government to continue to shoulder its responsibility in the face of the high running cost. The refinery is reported to be indebted to the tune of 2.3 trillion cedis.

The Finance Minister was answering questions from journalists after presenting a paper on the state of the economy during the government's first seven months in office.

"TOR will not forever be owned fully by the state; and we need to make this clear and invite companies and institutions who are ready and capable of helping us manage this national asset."

Osafo-Maafo said his predecessor, Kwame Peprah, signed the initial memorandum of understanding between the Ghana government and Samsung International of Korea on June 27, 2000.

"Therefore when we took office and decided to stand by the commitment of the previous government, J.H. Mensah and I signed the other part committing the Ghana government to the deal."

He debunked claims by Kofi Wayo that he had been denied the opportunity to buy TOR.

"Mr Wayo offered 30 million dollars for the entire company when even the current rehabilitation to put the refinery on a sound and competitive footing is 208 million dollars notwithstanding the original cost of constructing the refinery itself which exceeds the two figures put together."

Osafo-Maafo said cabinet has approved TOR's debt restructuring, which would convert into five-year bonds.

''Even though negotiations are going on between the government and the central bank on where to peg the interest rates I hope we will begin at about 10.6 per cent''.

"Banks will be given bonds based on the exact amount TOR owes," he said.

Osafo-Maafo said the government would also take part of the debt since some of it was built up due to the failure of the previous government to raise the prices of petroleum products.

"The government and the Bank of Ghana will sit down and come out with a formula that will determine the exact amount to be paid by government."