Movement of A Better Ghana Agenda on TOR

*PRESS CONFERENCE BY THE MOVEMENT FOR A BETTER GHANA CALLING ON PRESIDENT

MILLS AND HIS GOVERNMENT TO CONDUCT A THOROUGH INVESTIGATIONS INTO THE

CURRENT TOR DEBT SITUATION INSPITE OF THE INSTITUTION OF THE TOR DEBT

RECOVERY LEVY AND ITD ACRUALS. MONDAY 17TH JANUARY 2011.*

Ladies and gentlemen of the press on behalf of my colleagues here, I would

like to extend our heartfelt appreciation to you for honoring our invitation

to this press conference, you are all welcome.

This press conference is intended to bring to the fore interesting

developments on Ghana's TOR debt recovery levy, we are giving a background

to how the NPP administration managed to dupe Ghanaians with regards to the

TOR debt and make a passionate appeal to his Excellency President Mills to

as a matter of urgency to institute a forensic investigations into how the

previous NPP administration utilized proceeds of the TOR debt Recovery Levy.

According to a news item carried in the Friday 31st May 2002 edition of the

Daily Graphic, The Tema Oil Refinery (TOR) reaped a windfall of about ¢96.5

billion over a 12-month period as a result of the favorable price of crude

oil on the international market. It was estimated that but for the

cumulative windfall gained from March 2001 to March 2002, TOR would have

gone bankrupt because of its indebtedness, which then stood at ¢3.4

trillion.

The then Board chairman of TOR, Mr E. Adu-Gyamfi, indicated that the

windfall was gained largely because of the favorable price of crude oil on

the world marked and the introduction of the strict impart parity prices by

the NPP government in March 2001. He created an impression that from March

to December 2001, TOR had a windfall of ¢66,378,709,625.65, while between

January and 31 March 2002 an additional windfall of ¢30.177 billion was

realized.

Mr Adu-Gyamfi told Ghanaians that the Minister of Finance had directed that

the windfall for 2001 be applied to defray part of the interest charges on

the converted portion of the TOR debt. .

Indeed when the NPP took over government in January 2001, they reported that

the Tema Oil Refinery (TOR) had incurred a debt of ¢2.3 trillion arising

from unfounded subsidies up to the time of the introduction of the petroleum

formula which was put in place in February 2001. We were told that the debt

was in the form of overdraft at various local banks as well as loan

facilities taken from some overseas banks to establish letters of credit.

We were told that in September 2001, 970 billion of the debt of ¢2.3

trillion was converted into long term petroleum bonds while interest on the

converted portion came up to ¢87.2 billion as at 31 December 2001. We were

again told that the remaining debt which was not converted into bonds was

¢1.33 trillion, which has attracted an interest of ¢329.8 billion.

therefore the total interest on the entire debt of ?2.3 trillion stood at

?417 billion as at 1 January 2001. The NPP said the debt of ¢2.3 trillion

did not take into account an additional ¢1.1 trillion of non-matured letters

of credit in respect of which the products had been consumed by 31 December

2000. We were told that the letters of credit were established at a time TOR

was not in a position to establish and fund the credit on its own because

the long period of unfounded subsidies.

we were told that since crude oil is vital to the economy, the Ministry of

Finance had persuaded the Bank of Ghana to set up cash margin accounts at

the Ghana Commercial Bank in fulfillment of a condition demanded by GCB this

were made to believe that it was the understanding of TOR that upon

maturity, the cash margin accounts would be used to pay for the letters of

credit but unfortunately the Bank of Ghana had refused to do that and the

full liability of ?1.1 trillion as at 31 December 2000 had then been debited

to the accounts of TOR.

They explained that the effect of this is that the oil-related debt of TOR

stood at ¢3.4 trillion and attracting interest of ¢55 billion every month.

They argued that if the previous government had taken realistic measures,

the problem of TOR would not have compounded to this level where the

Government had to be paying ¢35 billion to the banks to service its debt

every month.

at the time the board Chairman of TOR Mr. Adu Gyamfi said and we quote ‘If

the total primary capital of all commercial banks in Ghana works out to only

¢2 trillion, then TOR’s indebtedness of over ¢3.4 trillion is crippling as

well as damaging for the refinery and its bankers, he said, and called for

drastic steps to address the oil-related debt without further delay.

Mr Adu-Gyamfi suggested to government to do something about the debt of TOR

by turning it into equity because the state is the sole shareholder. He said

refineries normally do not make losses because they lucrative businesses.

The board chairman said the government had two options: Either to absorb

more of the debt into protection bonds or take care of all the debt. He said

the government conservatively spends $600 million per annum to import crude

oil to run the refinery.

These and many more reasons culminated in the introduction of the TOR DEBT

RECOVERY LEVY when the Hon.Minister of Finance, Mr. Yaw Osafo-Maafo

presented the 2003 Budget Statement to Parliament and in

SECTION SEVEN: of the statement he outlined the NPP's government POLICY

INITIATIVES FOR 2003 that introduced the TOR Debt Recovery Levy on Petroleum

Products in paragraph 536 of the 2003 budget statement and I read " Mr.

Speaker, to ensure the achievement of full cost recovery as well as to help

pay of the accumulated debt of TOR over time, a Debt Recovery Levy on

petroleum products, at the rate not exceeding ¢640 per litre across board

will soon be laid before Parliament"

So the TOR Debt Recovery Levy was put in place, we have learnt over time it

accrued about 7 trillion Cedis but the money was not used for the intended

purpose.

What we have learnt in some circles is that about ¢15 billion was paid to

groups of journalists by the previous government.

According to an audit report, a former Minister of Information, Stephen

Asamoah Boateng, allegedly collected the money for distribution to the said

journalists.

The auditors say such groups were the beneficiaries of the ¢15 billion

cedis.

The ¢15 billion, according to the audit, was taken from the Tema Oil

Refinery (TOR) Debt Recovery Levy.

we are by this press conference ladies and gentlemen, calling on President

mills to institute an urgent forensic investigations into the circumstances

under which proceeds of the TOR Debt Recovery Levy were utilized and how

private and individual journalist sourced ¢15 billion cedis from the fund,

Who and who constitute BLOW, PRIM, FIRST RESPONSE, and the EDITOR’S FORUM. So

the people who would be found to have committed any crime to be punished to

serve as a deterrent to all government and public officials that Ghanaians

cannot be taken for granted.

Again, AFAG after their press conference today has slaated a nationwide

demonstration starting from the 26th of this month. We the Movement for a

Better Ghana (MBG) is also going to demonstrate in support of the fuel price

increase and also call on the government to take immediate measures in

prosecuting those who diverted the fund. Ladies and Gentlemen, arrangements

are ongoing and when we are done, we will inform you of the date of our

counter demonstration.

Thank you.

Ebenezar Opoku Alokeee- Organizer 0266607302

Francis Dodovi - Communications Director-0243751824

Ernest Brogya Genfi- Financial Secretary- 0249 582140

Kwaku Boahene -Member 0244 963425

Ofori Agyeman Boadi- Secretary- 0246085425

Aubrey Mends- Chairman- 0267976040