Wayo's Offer For TOR Too Small

Mr. Charles Kofi Wayo has had his eyes set on the Tema Oil Refinery (TOR) for a long time now. He attacked the NDC government concerning the refinery. Now he has turned his anger against the NPP - his own party on whose ticket he contested Election 2000. His outbursts imply that his party is behaving like the NDC towards him in his overtures to buy the refinery. He has through many radio appearances been claiming that he is being unduly denied the opportunity to purchase the Tema Oil Refinery.

Due to his persistent attacks, the Finance Ministry has been compelled to react, pointing to the fact that the amount he is quoting for the refinery is not economically sound. The Minister of Finance, Yaw Osafo Maafo, in reaction to a question at a press conference in Accra yesterday on the issue of the refinery, said although the government will prefer a Ghanaian to purchase the refinery, were it to be put on sale, such an indigent would be required to pay the right price.

Mr. Charles Kofi Wayo had offered $35 million which comes nowhere near the cost of the recent rehabilitation work on the refinery let alone the full cost of the facility. The Minister said that although the actual cost of the refinery is yet to be calculated, the rehabilitation cost $208 million.

"We'll prefer a Ghanaian to own the refinery to a foreigner. The offer of Mr. Wayo is nowhere near the cost of rehabilitation and even if he offers $50 million it will not be acceptable," he said.

Explaining why the government is determined to divest the refinery, Mr. Maafo said, "naturally it will not be possible for the government to continue to own the refinery. TOR's debt of ?2.5 trillion is enough to scare us. As soon as it is practicable we will privatise the refinery."

Mr. Maafo said that in June last year the Former Minister of Finance, Mr. Kwame Peprah signed a memorandum of understanding with Samsung on divesting the refinery. After the change of government they have decided to pursue the issue to its final conclusion because the previous government took the right decision.

According to the Minister, the government would implement any good policy that the previous government initiated.

He said that as part of the corrective measures to stabilise the economy the government would restore taxes on petroleum products that were removed in February 2001 in order to stop a potential annual loss of ?600 billion in revenue.

The Minister disclosed that Cabinet has approved a debt restructuring plan for TOR as well as the approval of a list of state assets valued at about $50 million that could be divested to support the budget including reducing domestic debt.

Other measures include the forensic audit of some public institutions including the Ghana National Petroleum Company (GNPC), TOR, Bulk Oil Storage and Transport Company (BOST), Social Security and National Insurance Trust (SSNIT), State Insurance Company (SIC) and the Ghana Reinsurance Organisation (GRO).

The rest are the Ghana Water Company Limited (GWCL), Electricity Company of Ghana (ECG), Divestiture Implementation Committee (DIC), National Insurance Commission (NIC), and the Ghana Heavy Equipment Limited (GHEL).

On the recovery of government debts, the Minister said efforts so far yielded about ?10 billion, adding that the government had therefore decided to employ the services of private debt collectors to help speed up the debt collection process.

Mr. Maafo said the government in the short term was trying to stabilise the economy but microeconomic stability though necessary, was not sufficient for economic growth.

He said the government believed that the economy could grow through expansion and diversification of exports. "That is why the president, Mr. J.A. Kufuor is launching his special initiative on garments, textiles and agribusiness to take advantage of the Africa Growth and Opportunity Act (AGOA) tomorrow," he said.

Commenting on the state of the economy Mr. Maafo said inflation was 40.6% in December and dropped to 34.6% by the end of July, while the cedi depreciated by 1.7% between December and July.

He said the delivery of assistance under the enhanced Highly Indebted Poor Country Initiative (HIPC) was expected to reduce the external debt burden of $6 billion to a significant level.

The debt revenue ratio is expected to decline from 558% to about 160% in 2003 far below the HIPC cut-off rate of 250%, while the debt savings in the longer term are expected to increase to an average of over $170 million per year.

Whether Mr. Kofi Wayo would still pitch for TOR after the Minister's explanations is anyone's guess, but with so many radio stations around, he will be busy as usual.