Gov’t pays off $1bn legacy debt to Bulk Oil Distributors.
Government has, as at February 10, 2020, paid all legacy debts owed the Chamber of Bulk Oil Distributors (CBOD).
According to a statement signed on Monday, February 10, 2020, by Senyo Hosi, Chief Executive Officer of the Chamber, government made payments to the tune of US$1 billion as of January 13, 2020.
The Bulk Oil Distributors say, the debt which stood at US$1.43 billion, had accrued between July 2011 and July 2015. However, following an agreed payment plan with the government, the BDC’s wrote off US$432 million, leaving about US$1 billion to be paid.
Breakdown of the debt cut agreed by BDCs and the government
Forex Loss Under Recovery Attribution USD 55 million
Unconfirmed transactions by BoG USD 93 million
Interest Rate Haircut on RVF USD 153 million
Interest Rate Haircut on FLURI USD 87 million
Delay in Payment of RVF and FLURI from Cut-off Date USD 44 million
Together with the interest, the amount that had accrued was however capped in March 2018, which means that beyond this point, no new amount was calculated on neither the actual amount nor interest.
Of the three components of the debts, the highest of all was the Forex Loss Under-Recovery (FLUR) – the losses incurred by BDC’s as a result of the differentials between the forex rates set by the National Petroleum Authority (NPA) for pump prices, and the rates at which FX rates were supplied by the Bank of Ghana on behalf of Government. The FLUR debt stood at US$806.25 million.
Marginally following the FLUR was the Forex Loss Under-Recovery Interest (FLURI) – interest accrued on the delayed payments of Forex loss under-recoveries; at US$99.67 million.
Furthermore, the Real Value Factor; the interest accrued on the delayed payments of price under-recoveries, stood at US$97.16 million.
The payments were made through cash and the Bank of Ghana while others were paid through Energy Sector Levy bonds.
Payment Type Amount
Cash Payments USD444.72mn
Bank of Ghana Bonds USD219.08mn
ESLA Bonds USD339.28mn