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Monday, July 27, 2009

Ghana@50 Commission - ADB Gave $3.5m Loan

The acting Deputy Managing Director of the Agricultural Development Bank (ADB), Mr Paul Ofori Agyiri, yesterday told the Ghana@50 Commission of Inquiry that the bank provided a $3.5 million loan to the African Union Development Consortium Limited (AUDCL) to facilitate the construction of housing units to host guests for the AU Summit.

He said the facility was not provided for the government of Ghana but the consortium, which was constituted by the Prudential Bank Limited (PBL), the National Investment Bank (NIB) and the ADB.

Mr Agyiri told the commission that the credit facility, which was given at a time when the cedi was almost equivalent to the dollar, was overdrawn by GH¢1,040,267.08 and that as of the end of June 2009 the principal and the interest accrued added up to GH¢6,455,261.13.

He told the commission that the consortium also contracted a facility of GH¢10 million from the Social Security and National Insurance Trust (SSNIT) to complete the construction of houses at La/Cantonments.

He said the initial agreement between the government of Ghana and the consortium provided that after the buildings had been used for the AU Summit, they were to be sold and the proceeds used to service the credit facility.

He noted that paying back the loans had delayed because the houses had not been sold and interest continued to accrue.

He indicated that the AUDCL had engaged the services of some consultants to look for prospective buyers of the houses so that the proceeds would be used to service other outstanding debts.

Mr Agyiri said the ADB had about 39 per cent shares in the consortium and denied the assertion that a private individual had shares in the AUDCL.

Earlier, an official of the NIB had also appeared before the commission to give evidence.

Mr David Fameyeh, the Credit Monitoring Manager of the NIB, told the commission that it was the Government of Ghana, not the Ghana@50 Secretariat, that made proposals to the banks to finance the housing units at Ridge.

He indicated that the AUDCL did not expect any loss of money invested into the housing units.

“We do not expect losses; we expect a repayment of the loans and interest,” he stated, adding that “the bank is expected to earn interest, while the AUDCL, as an entrepreneur, is taking risk to make profits”.

He indicated, however, that if there were any losses, the banks and the consortium would bear those losses.

At yesterday’s sitting, the Chairman of the commission, Mr Justice Isaac Duose, commented on media reports on the work of the commission and indicated that it was not out to demonise anybody.

He said it was, therefore, wrong for anybody to demonise the commission, stressing that it had the mandate to establish the facts.

He urged the media to recognise that freedom of speech also had responsibilities attached to it and advised them to be careful in order not to create any problems for the country.

“This is the only country we have,” he cautioned.

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