The Ghanaian government has cleared $300m of legacy debt

Finance Minister, Ken Ofori-Atta
  • The 2018 Industry Report of the Chamber of Bulk Oil Distributors has disclosed that government has paid $300 million of outstanding legacy debt.
  • The government is expected to pay a total of $49.77 million by the end of 2019.
  • The outstanding claims at the end of 2018 comprised Real Value Factor (RVF) and Forex Loss Under Recoveries Interest (FLURI) claims.

The Ghanaian government has paid $300 million of outstanding legacy debt to Bulk Oil Distribution Companies (BDCs) between 2017 and June 2019.

This was contained in the 2018 Industry Report of the Chamber of Bulk Oil Distributors (CBOD).

The government is expected to pay a total of $49.77 million by the end of 2019.

This means the government has incurred $930 million of subsidies through its subsidy policy from 2012 to date.

The outstanding claims at the end of 2018 comprised Real Value Factor (RVF) and Forex Loss Under Recoveries Interest (FLURI) claims.

Real Value Factor is the financial cost (interest) incurred by BDCs for the delayed payments of price under recoveries.

Forex Loss Under Recoveries Interest is the financial cost borne by BDCs for the delayed payment of Forex Loss Under Recovery (FLUR) by the government.

The report stated that Legacy Bonds Limited, an assignee of the BDC claims, negotiated and finalised the terms for establishing the FLURI and RVF claims with the government.

It stated that in June 2019, the government through the Ministry of Finance issued a 10-year ESLA bond of GH¢648.93mn to fully settle the validated RVF claims and partially settle the FLURI claims.

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