The Consolidated Bank Ghana (CBG), acting through a directive from the Ministry of Finance, will be supporting seven State-Owned Enterprises (SoE) with some GH¢312 million to stabilize their operations, especially pay workers’ remuneration as the Coronavirus has impacted their finances adversely.
The credit facility is a government-guaranteed concessionary credit with a moratorium and would be available to ensure prompt salary payment by the SoE for the next six months.
In letter cited by the B&FT, the Finance Minister said the Ghana Airport Company Limited (GACL), Ghana Civil Aviation Authority (GCAA), PSC Tema Shipyard and Dry-dock, Intercity STC, Metro Mass Transit Limited (MMT), Ghana Technology University College (GTUC), The Ghana Institute of Management and Public Administration (GIMPA) are the SoEs who would benefit from the facility.
The paper gathers that the package was part of the supplementary estimates presented to Parliament as part of the Mid-Year budget review. The Minister of Aviation, Joseph Kofi Adda, in an interview with the media on the sidelines of the handover ceremony of the outgoing Director-General of GCAA in Accra last Thursday, confirmed that the government had approved a bailout package for GCAA and GACL.
According to him, the beneficiary SoEs needed to negotiate with the bank to access their funds and added that “I can confirm to you that the government has approved the bailout and it is generally dedicated to maintaining the staff from being laid off. “As a result, the Ministry of Finance (MoF) agreed on a facility from the CBG in which the SoEs will get enough support to maintain their staff.”
According to the Finance Minister, Ken Ofori Atta, these state institutions are critical to economic growth and therefore the move to ensure that they are able to pay their staff on time and prevent any layoffs which may have dire consequences on their operation.
Meanwhile, the SoE would have to negotiate with the bank and present documentation on how much they would need to pay their staff and keep some key operations functioning before the bank will disburse the facility: “It is left for the SOEs to negotiate with them” Mr. Adda told the media.
The outgoing Director-General of GCAA, Simon Allotey, confirmed the development, saying, “We thank President Nana Addo Dankwa Akufo-Addo for being sensitive to the challenging situation of the aviation industry. It is not only the GCAA, but the GACL and other agencies are being supported under these difficult times.”
For the CBG, the government says it would issue a two-year bond with the bank as a measure to guarantee the facility for the SOEs. Again, the Finance Ministry has asked the seven SoE to establish a banking relationship with the CBG and channel their cash flow through the bank but was quick to add that, the move must be done with the approval of the Bank of Ghana and the Board of CBG.