The Ghanaian government has cleared $300m of legacy debt

The Ghanaian government has cleared $300m of legacy debt

<ul><li>The 2018 Industry Report of the Chamber of Bulk Oil Distributors has disclosed that government has paid $300 million of outstanding legacy debt.</li><li>The government is expected to pay a total of $49.77 million by the end of 2019.</li><li>The outstanding claims at the end of 2018 comprised Real Value Factor (RVF) and Forex Loss Under Recoveries Interest (FLURI) claims.</li></ul>

<p class="">The Ghanaian government has paid $300 million of outstanding legacy debt to Bulk Oil Distribution Companies (BDCs) between 2017 and June 2019.</p>

<p class="">This was contained in the 2018 Industry Report of the Chamber of Bulk Oil Distributors (CBOD).</p>

<p class="">The government is expected to pay a total of $49.77 million by the end of 2019.</p>

<p class="">This means the government has incurred $930 million of subsidies through its subsidy policy from 2012 to date.</p>

<p class="">The outstanding claims at the end of 2018 comprised Real Value Factor (RVF) and Forex Loss Under Recoveries Interest (FLURI) claims.</p>

<p class="">Real Value Factor is the financial cost (interest) incurred by BDCs for the delayed payments of price under recoveries.</p>

<p class="">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.</p>

<p class="">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.</p>

<p class="">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.</p>

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