An amount of GH₵3million granted by the Social Security and National Insurance Trust (SSNIT) to Ghana Agro Food Processing Company (GAFCO) since November, 2004, has still not been paid, Kasapafmonline.com can say.
The said amount, according to a report submitted to Parliament, Thursday, for adoption by the Public Accounts Committee (PAC), constituted an equity loan advanced to GAFCO on October 22, 2004.
SSNIT had advanced the loan payment with the intention of acquiring 40% equity in GAFCO after the determination of the value of the food processing firm.
According to the report of the Kwaku Agyemang-Manu chaired PAC on the Report of the Auditor-General on the Public Accounts of Ghana – Public, Corporations and other statutory institutions for years ended December 31, 2010 and 2011, the loan was converted into equity in year 2010 when the value of GAFCO was finally determined.
However, five years down the line, not a single pesewa has been realized as dividend from the equity investment, with the agro food processing firm said to be non-performing.
According to the PAC, facilities of the company have since been leased out to a private operator with SSNIT having no plans of recouping its investment.
SSNIT’s wholly owned subsidiaries; SSNIT Guest House in Accra and the Trust Hospital have also not been profitable.
The SSNIT Guest House, according to the report, has not been profitable since 2002 whilst the Trust Hospital made losses in years 2006 and 2007.
“Losses incurred by the SSNIT Guest House in Accra and the Trust Hospital during the year ended December 31, 2007 amounted to GH₵357,476 and GH₵2,756,000 respectively,” the report in part noted.
According to Mr. Agyemang-Manu who is also the MP for Dormaa Central, though officials of SSNIT informed the committee that SSNIT Guest House and the Trust Hospital has since 2011 and 2013 been registered as Limited Liability Companies and making profits, that should not stop them from reviewing its non-performing investments.
Another investment by SSNIT in Bessblock Limited has been unprofitable ever since the company commenced business.
To Parliament, such losses are “a drain on contributors’ financial resources” and faulted management of the Trust for failing to conduct due diligence before investing in the aforementioned firms.
It therefore cautioned SSNIT to carefully assess the economic viability of companies before investing in them.
“In situations where investments are failing, SSNIT’s strategies of investment should be evaluated and if possible changed to ensure value for money.”
By: Kasapafmonline.com/Ghana
