'Blows' at IMF meeting over government’s debt owed BDCs

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Created on Wednesday, 01 October 2014 00:00

'Blows' at IMF meeting over government’s debt owed BDCs

01 October 2014

Ghana’s Finance Minister, Mr. Seth Terkper on Thursday September 18, allegedly attacked the Chief Executive of the Ghana Chamber of Bulk Oil Distributors (CBOD), Senyo Hosi, at a meeting between government and the International Monetary Fund (IMF) representatives currently in the country.

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The New Independent newspaper reported that government sources told them the debate between the two at a point got worse while IMF officials and other members of the government delegation looked on in utter disbelief.

One IMF official was said to have expressed shock and outrage at the development describing the Minister’s conduct as uncalled for, The New Independent reported.

The seeming drama of disagreement between the two, which resulted in an open attack, began when the issue of forex loss differentials came up for discussion.

The leader of the IMF team wanted to find out the quantum of forex losses owed the BDCs by the government and whether the BDCs were going to claim forex losses from the government for the year 2014.

The New Independent learnt that, the response to this IMF request from the BDC team at the meeting, led by Senyo Hosi, was that, there would be a claim of forex losses from government for the year 2014.

At this juncture, the Finance Minister is said to have flared up and said, the government was not going to pick forex losses, explaining that, forex losses are covered by accounting standards as tax deductible and that, the best thing for the BDCs to do was to file their returns with the Ghana Revenue Authority and then make deductions for forex losses.

According to our sources, the Finance Minister at a point angrily told Senyo Hosi that, the BDCs could go to hell and that, they had a diabolic agenda to hold the entire country to ransom and telling them in the face that, “if they thought the kitchen was too hot for them, they could get out.”

Mr. Terpker is reported to have told the BDCs boss at the IMF arranged meeting that, he could advise his members to opt out of the business.

This resulted in hot exchanges between the Finance Minister and SenyoHosi, the Boss of the BDCs, with the latter questioning the current position of the Minister that, the government was not going to pay any forex losses to the BDCs, indicating that, the Minister was going against the position adopted by the government on the matter under the directive of President John Dramani Mahama.

He exposed the Minister’s inconsistency, which runs counter to government’s official position after the latter had paid an amount of US $ 150 million to the BDCs in respect of forex losses this year, explaining that, it is the government that regulates the forex rate at which the BDCs sell their products, stating that, on June 16, 2014 the forex rate that was applied was 2.9 while the Bank of Ghana published the rate of 3.0, and wondered how the government would expect the BDCs to sell at the government’s determined rate without taking responsibility.

According to our sources at the meeting, Senyo Hosi pointed out to members of both teams at the meeting the inconsistencies in the conduct of the Finance Minister, who at times advises the government to accept the payment of forex losses, but at times makes a ‘U’ turn when same issues are raised.

At this point, The New Independent learnt that, the meeting degenerated into a banta of give and take between the Minister and the boss of the BDCs, with the latter telling the Minister in the face that, the forex losses would not have arisen if the government had not intervened to dictate how to price their products.

Fuming with rage, Mr. Seth Terkper is said to have told the BDCs that, they have the option to leave the industry if they feel cheated under the circumstance, but in a sharp response, Mr. Hosi also told the Minister that, he (Minister) also had the option to get away from the responsibility if he did not want any liability.

But The New Independent has learnt that, Mr. Terkper told the BDCs that, they had a clear option, so they should not arrogate the cost to him and urged the BDCs team at the IMF meeting to go back and advise their members to opt out of the business and to tell them that, nobody was holding anybody’s hands or forcing anybody to be a BDC, and wondered why the BDCs think that, they were shouldering an unbearable burden yet should continue to be in the industry, indicating angrily to them that, the BDCs were not indispensable.

The New Independent further learnt that, in a sharp response to this query by the Finance Minister, SenyoHosi indicated that, the BDCs were still in business because since 2012 the government had accepted the responsibility of paying up the forex losses, else they would have stopped operations.

He also indicated at the meeting that, BDC business activity is only dependent on funding support from the banks, adding that, the banks since 2012 upon realizing the forex loss situation continued to fund the BDCs because government through the NPA wrote letters to affirm government liability on forex losses, he told the IMF team.

“Stop the business, I say stop the business, it is voluntary,” the Minister retorted angrily to the bewilderment of the IMF team, insisting that, the current policy was that, they would not shoulder any forex losses and stated that, “if it is a burden and it is a problem, leave the industry, it is as simple as that,” Mr. Seth Terkper told SenyoHosi and his BDC team at the IMF meeting, pointing his hands angrily towards the direction where the BDC Boss and his team were seated.

The New Independent was hinted that, feeling embarrassed about the development, the leader of the IMF team, in a move to stop the confrontation between the two, veered off from the forex losses that had caused the tension and raised the tempo at the meeting and shifted his attention to the Boss of the BDCs wanting to know if the BDCs had cedi liquidity if they were to be provided US $ 1 billion.

This finally did the trick of bringing the tension down to enable the meeting, which had been marred by the Minister’s conduct, to be brought back on track, government sources at the meeting hinted The New Independent.

When contacted, Senyo Hosi, initially declined comment but upon insistence agreed to make an input but refused to either confirm or deny whether there were some hot exchanges between him and the Finance Minister at the IMF meeting on the said day.

Mr. Seth Terkper could not be reached for his comments as his phones were still off as at press time yesterday, but The New Independent is still making frantic efforts to reach him for his comments and will in subsequent editions bring this to the attention of readers.

Source: The New Independent