Four residential halls in the University of Ghana risk being privatized over the failure of the university to service a ¢43m loan facility contracted in 2008 for the construction of the halls.
The loan which was released in three tranches has grown to ¢528m due to interests and other charges which have accrued over the past 10 years.
This development comes on the heels of a law suit which was brought against the university by the consortium of banks in the agreement led by CalBank which ended with an order by the court for University of Ghana to pay off the accrued debt of ¢528m.
The four halls in question; Hilla Limann, Alexander Adum Kwapong, Elizabeth Frances Sey and the Jean Nelson Aka halls, accommodate about 7,000 students whose fate hang in the balance with regards to whether or not the halls will be privatized.
Confirming the issues on the Campus Exclusive show, Ag. Dean of Students of the University, Prof. Godfred Bokpin revealed that, government in 2009 promised to absorb the repayment of the loan after students agitated over management’s intention to charge commercial rates for rooms in those halls.
This promise was however not fulfilled.
He maintained that the amount due may not be cleared without the halls being privatized or at least the fees being gradually increased.
‘When the project was completed, management wanted to charge commercial rates in order to offset the loan because they were private funds, but students agitated and government through the then president, the Late Prof. J.E.A Mills promised to pay the loan. That promise was however never fulfilled. Now the debt is on us and the banks are asking for us to privatize the halls so they recoup their funds’, he said.
Prof. Bokpin further highlighted that management tried to join government to the suit since it had been an interested party and in fact the reason the university charged regular rates but the motion to join government was denied by the court.
“So the banks went to court. We joined government to it but we lost the case and the verdict was given. Judgment was given on 30th January this year and the loan that was GH¢ 43 million has now grown to GH¢ 528 million as at the end of February and still counting” he added.
Meanwhile the students, led by the SRC President, Sylvester Amoako has have expressed misgivings about the privatization of the halls due to the possible increment in fees.
They justify this by saying that, it is no fault of students that management has not been prudent in its handling of the loan and thus students cannot be made to bear the effect of management’s inefficiencies.
Recent efforts at servicing the loan
Prof. Godfred Bokpin maintained that in the past two years, the University has made attempts to offset the loan, however these efforts have not yielded much.
Among these efforts are the creation of a Sub-Committee [of the University Council) on Finance to re-assess the loan and make recommendations on how to offset same.
Talks have also been opened with SSNIT to take over the facility after which it will service the debt incurred by the University.
“From early part of 2017, we took a decision that this is University of Ghana Debt and the University should take some proactive measures. So, there was a committee setup to restructure the loan facility. In fact, there have been several attempts in time past to offload the loan facility to SSNIT to manage and then payoff the debt. I think the process went on to the final stage and I am told SSNIT backed out last minute’, he added.
Impact on Students
In relation to the immediate impact to students, Prof. Bokpin hinted a gradual increase in the user fees for the said halls.
In his defense, Mr. Bokpin argued that inflation and existing economic indicators are to blame for the inevitable increment in hall fees.
He added that the cost of maintaining and running the hall has increased and as such has necessitated the consideration of the increase in hall fees.
“If you ask me that is to be expected but I think what we have to be concerned is at what rate. How do we adjust the rate gradually.
That will be far better than actually saying that the banks should auction the hostels. The impact of that would be significant compared to we having an intervention in place.
If you look at the under-recovery rate between Alex Kwapong and then the private hostel like the Ghana Hostels its millions of cedis.
I’m not saying that we should restore parity in the immediate, but the point is that we have to face reality even if it’s not because of the judgement debt remember that the cost of maintaining the hostel are increasing with the passage of time in relation to price development.
So we can’t expect to keep the price at the same level and expect improved in the face of rising prices generally in the country’, he stressed.
University of Ghana in 2008 contracted a loan to a tune of GH¢43 million to construct four halls to close the deficit in residential spaces available to students.
The newly built halls provided accommodation for some 5000 students. The rent for halls was expected to be pegged at commercial prices.
This projection lasted for only a year and a half coming to an end in 2010 after student leaders mounted a resistance and appealed for the rent to be pegged above that of traditional halls and below those of the halls at the Northern sector of the campus (Ghana Hostels, T.F, Bani Hostels and Evandy).
Amidst the protests, the Government of Ghana intervened. Government’s commitment at the time was to offset the loans on behalf of the University.
The University over the years made no attempts to document the decision of Government nor to service the loan they had contracted.
Following that, the consortium of banks filed a suit at the court of which the verdict went in its favor.
By: Manuel Koranteng & Michael Ashalley | universnewsroom.com