Education Ministry to meet banks over UG debt before May 31 deadline

General 19 May 2019 Updated

Education Ministry to meet banks over UG debt before May 31 deadline , KNUST , Government

The Ministry of Education has moved to settle issues of indebtedness between the University of Ghana and a consortium of six banks.

This comes days after students of the University gave the management and government a one-week ultimatum to completely halt the planned privatization of some four halls of residence in the school to enable the University authorities defray a credit facility they took to put up the structures.

A statement issued from the Education Ministry today stated that it is going to hold talks with the university’s creditors to find a way forward and forestall any negative repercussions that the school stands to suffer in default.

“The Minister of State, has come to appreciate the implications of the situation of the debt burden on the University of Ghana, Legon and has indicated his readiness and that of the Ministry to meet with the leadership of the consortium of banks and the management of the University to find an amicable solution before the negotiated deadline of 31st of May 2019.”

“However, the Minister of State explained that this matter is strictly the responsibility of the University of Ghana Council but government has expressed interest in the matter because of public interest and its implications for academic stability on university campuses. The Ministry has appealed to the leadership of the student body to exercise restraint as steps are being taken to resolve the impasse,” portions of the statement added.

The students had claimed that the University has not been able to service the GHc43 million loan adding that the amount had now ballooned to over GHc500 million.

The University, having incurred a judgement debt of 528 million cedis for failing to service a 43 million cedi loan it secured for the construction of the halls, has up to the end of May 2019 to make a good faith deposit of 50 million Ghana Cedis or risk losing control of the affected halls.

Authorities of the university have decided to hand over the operation of these halls to private individuals to enable them generate extra revenue to offset an over ten-year-old loan it secured for the construction of the said halls; a move the students are fiercely resisting.

Meanwhile, the Dean of Students Affairs at the University, Prof. Godfred Bokpin has indicated that no decision has been reached yet on privatizing some four halls of residence at the school, hence students should remain for calm.

“The truth of the matter is that, the University does not have the balance sheet to absorb that debt. So the loan that was Ghc43 million has now grown to 528 million due to the judgment that was given. The University has been having discussions with the consortium of banks led by CAL Bank to see how to restructure it.”

“This why the students have picked the signal that these hostels may be privatized. For us, it was an option that came up but a firm decision hasn’t been taken to privatize those hostels. In the last couple of months that I engaged the students, they were very reasonable so I want to believe that we will all sit down and discuss and then find a compromised position to help the growing concern of the University and give comfort to the banks,” he added.