Business
SSNIT’s books include 858 million dollars in non-performing loans – AG’s 2021 report
The 2021 Auditor General’s report of the Social Security and National Insurance Trust has non-performing debts totalling GH858,380,662.
Section 91 of the Public Financial Management Act 2016, (Act 921), has is that the Board of Directors of a public corporation governed by this Act shall ensure the efficient management of the public corporation’s financial resources, including the collection and receipt of monies owed to that public corporation.
According to the study, seven corporations were not repaying loans totalling $858,380,662.10.
“The schedule officers indicated that the companies involved have not been making profits over the years, as evidenced in their financial statements for the past five years. The non-payment of the loans has impacted negatively on the cash flows of SSNIT and if continue, will significantly affect the sustainability of the Trust”, the report added.
“We recommended that Management should review the loan portfolios with the respective companies and put in place measures to recover them. We also recommended that management should take possession of the underlying assets of the defaulting companies to defray parts of the loans. We further recommended that management should seek redress at the law court where appropriate to recover the loans”.
SSNIT’s response
1. RSS Developers Ltd. (Loans1, 2, 3)
Loan 1– Ghana cedi equivalent of US$50.0 million was disbursed in tranches to the company in 2011 (April, June and December).
Loan 2 – Ghana cedi equivalent of US$115.0 million was disbursed to the company in tranches as follows: § 2013 (January, February, April, September and October). § 2014 (March and April). § 2015 August and September). 2574.
Loan 3 (Bridge) – Amount Approved US$17.0 million. The Trust disbursed Ghana cedi equivalent of US$12.75 million in two tranches to the company in November 2014 and February 2015. The company was to repay the loan with proceeds from sale of its property developments.
The development has however faced a myriad of challenges including a slowdown in the real estate market, overpriced units of its development, and inability of the contractor, being a partner in the company, to complete the development, which in our estimation, arises from the contractor’s own financial challenges.
SSNIT has swapped part of its debt with the completed housing units of the company to lower its financial exposure. SSNIT Management has put in place a new Investment Policy and Guidelines document to guide the Trust on such transactions in future that includes that, SSNIT shall not enter into any joint venture agreement where a partner in the JV will be the contractor for the project the JV is to undertake. SSNIT is preparing to aggressively market the sale of the units that have been taken over.
2. Aluworks Limited 2576. Aluworks defaulted on its contractual obligations to the Trust due to financial and operational challenges arising from what they termed as unfair competition from abroad. SSNIT bought land from Aluworks to enable the company get funds to pay its debt owed to VALCO and get funds for working capital. The proceeds were used for the purpose and as a result the company currently has a credit balance with VALCO. This has freed up working capital making it easier for the company to operate. Discussions for a strategic investor is still ongoing.
Aluworks Ltd., being a public listed company, is preparing to hold an Annual General Meeting (AGM) tentatively set for October 2021 where it will table the SSNIT proposal for a strategic investor for shareholders’ discussion and direction. A draft resolution to be considered at the AGM has been received from the company’s Management. Injections by a strategic investor will be used to retire a significant portion of the SSNIT debt.
3. Switchback Developers Limited
The construction of Phase I of the project experienced delays due to a lack of adequate construction finance. Sale proceeds received, which were to be used to pay for the loan, have been used for the construction. Thus, the company’s inability to pay back the loan when it fell due.
Phase I of the project is about 95% complete. The Trust has injected funding by acquiring 6.18 acres of the land and responded to a rights issue to purchase flats at a significant discount. Sales are ongoing and is expected that the loans will be repaid from the proceeds. In addition, Shareholders are also considering selling additional parcels of land. It is expected that the sales of the land and apartments will exceed the value of the loans.
4. Intercity STC Coaches Limited 2580. The company continues to record losses and is unable to generate adequate cash flows to service the debt. The current border closure due to the COVID-19 pandemic, also affected travel to Togo and Cote d’Ivoire which are a significant source of revenue for the company. The acquisition of buses through an ADB Bank loan and from the Government is complimenting management’s new strategy to turn the business around. The Trust is monitoring the progress of the company to ensure repayment is done.
5. Trust Logistics Limited
Strong competition within the logistics industry has been made worse by an aging fleet of trucks. This has meant that the company continues to make losses. This has meant that the company has not been able to repay the loan. Board and management are implementing a new strategy to diversify revenue sources and improve performance. As part of the strategy, it is leveraging its landed assets to improve its performance through agreements that will utilise its land more effectively.
The company has now physically secured its land and is in the process of perfecting the title to the land to facilitate the new strategy. SSNIT has also worked to complete a long-standing asset split between the company and ISTC. It is therefore able to either monetise these assets if needed and to leverage others to improve its performance.
6. Kumasi Abattoir Company Limited
The company continues to record losses. Low cost of slaughter services (charges/prices) against high cost of operations as butchers consider the company as a social project. Butchers are to be educated to accept the fact that, the company can only be viable if realistic slaughter rates are charged. Board of company working on the above.
7. GICEL (Shareholder Advance)
GICEL failed to settle the first instalment of GH¢62,206.97 scheduled for 9th November 2020, due to cash flow challenges occasioned by refusal of tenants to pay rent to the company during a pendency of a court case at the High Court.
The litigation that caused the company to take the loan from SSNIT was determined in favour of SSNIT/GICEL by the High Court on 21st October 2020. However, the plaintiff (Ghana National Association of Garages), dissatisfied with the ruling, filed an appeal at the Court of Appeal, Accra. The appeal case is pending.
In March 2021, SSNIT used a portion of SSNIT Weija Branch’s rent due to the company (GH¢31,878.00) to defray part of the loan owed to SSNIT. The company made another payment of GH¢50,000.00 on 27th August 2021. SSNIT and GICEL (i.e., the defendants) are working together to legally secure the ownership of the estate so as to sustain the company’s operations to enable it to service the loan”.
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Car insurance rates are not uniform; they can vary substantially across people. Insurance companies use a number of factors when determining the cost of your vehicle insurance policy. Understanding these factors is crucial for receiving the best coverage at the best price. In this comprehensive essay, we will look at the primary factors that influence your vehicle insurance quote.
Driving Record
Your driving record has a significant impact on the cost of your vehicle insurance. Insurance companies look at prior accidents, driving violations, and claims history. A clean driving record with no accidents or violations often results in lower premiums; however, a history of accidents and penalties may result in higher rates.
Age and Gender
Age and gender are typically considered when deciding vehicle insurance prices. Drivers who are young and inexperienced, particularly men, pay higher rates since they are statistically more likely to be involved in an accident. Drivers’ rates tend to reduce as they gain experience and reach middle age.
Location
Your geographic location is a significant consideration when determining your auto insurance quote. Insurance prices are higher in regions with high crime rates, heavy traffic, or an accident history. Rural towns, on the other hand, often have lower premiums due to fewer accidents and lower crime rates.
Vehicle Type and Model
The brand, model, and year of your automobile have a direct impact on your insurance quote. High-performance vehicles, premium vehicles, and newer models generally cost more to insure due to higher repair expenses and theft rates. Safety features and the vehicle’s safety record can have an impact on rates.
Usage of the Vehicle
The way you drive may have an impact on your insurance price. Cars used for frequent commuting or commercial purposes often have higher premiums than cars used for pleasure or on occasion. Mileage and the length of your daily journey are other crucial factors to consider.
Coverage and Deductibles
The kind and level of coverage you choose has a significant impact on your rate. Insurance with higher coverage limits and additional features (such as comprehensive and collision coverage) will cost extra. A higher deductible can lower your premium, but it also means you’ll have to pay more out of pocket if you file a claim.
Credit Score
In certain states, insurance companies use your credit score to determine your rate. A good credit score may result in lower rates, whilst a poor credit history may result in higher rates.
When compared to single drivers, married folks often pay less for insurance. According to studies, married persons are less likely to engage in risky driving practices.
Driving Experience
Your driving history may have an impact on your premium. New drivers frequently pay higher rates, although experienced drivers may be eligible for discounts.
Claims History
Your insurance rate may rise if you have a history of submitting repeated claims. Insurance companies perceive frequent claims to be a greater risk.
Discounts and Bundling
Insurance companies typically provide discounts for a variety of reasons, including having multiple policies with the same company (bundling), completing driver safety classes, maintaining a clean driving record, and putting anti-theft technology in your car.
Occupation and Education
Some insurers evaluate your work and education level when calculating rates. Lower rates may be associated with certain vocations and levels of education.
What element has the greatest influence on insurance premiums?
The individual’s driving record is often the most influential element in insurance prices. Your driving record, including accidents, traffic tickets, and claims, has a substantial influence on the amount of vehicle insurance you pay. Insurance companies evaluate your risk as a policyholder based on your driving record.
Here’s why your driving record is so important:
- Risk Assessment: Insurance companies utilise previous data to determine your chances of being involved in future accidents or submitting claims. A clean driving record with no accidents or infractions indicates a reduced risk, which translates to cheaper rates. A history of accidents, traffic fines, or claims, on the other hand, indicates a higher risk and may result in higher insurance premiums.
- Data consistently demonstrate that drivers having a history of accidents or traffic offences are more likely to be involved in future incidents. Insurance firms base their premium rates on this information.
- Legal Requirements: Your driving record is particularly important since insurance firms are frequently legally required to examine your prior driving conduct when setting premiums. set accidents or infractions, for example, may remain on your record for a set number of years, and insurers are compelled to consider them.
While your driving record is a major influence on insurance costs, other factors such as your age, location, car type, and policy selections also play key roles. Insurance companies use a mix of these criteria to measure risk and calculate your premium. As a result, keeping a clean driving record is one of the most efficient strategies to keep your insurance prices low.
Conclusion
A number of factors influence your vehicle insurance rate, many of which are within your control. Understanding these features will enable you to make more informed judgements about coverage and cost reduction. By having a solid driving record, shopping around for quotes, and taking advantage of any discounts, you may get the best auto insurance coverage to meet your needs at a price that matches your budget.
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