The University of Ghana (UG) is likely to lose most of its assets in an auction if the university fails to pay back a $64 million loan, the Minister for Education Mathew Opoku Prempeh has revealed.
According to Opoku Prempeh, popularly known as NAPO, the University is expected to pay back $10 million a year over a period of 25 years for a principal of $64 million to Africa Integras, a private firm based in the United States.
The money was borrowed to construct Faculty offices on campus but, the Education Minister revealed on Peace FM Monday that the project has stalled and the money cannot be accounted for.
The University, back in 2015, entered into a Public Private Partnership (PPP) agreement with Africa Integras to invest US$64 million in the construction of 1,000 new students’ hostel beds for undergraduate and post-graduate students on the Legon campus.
The project was structured as a 25-year Build, Operate and Transfer (BOT) contract.
The BOT agreement was signed by Professor Ernest Aryeetey, then Vice-Chancellor of the University of Ghana, on behalf of the University, while Ms Andrea Pizziconi, Managing Partner at Africa Integras, initialed for her Organization.
Speaking to host of Kokrokoo, Kwami Sefa-Kayi, the Manhyia North MP disclosed that the amount was borrowed “about two or three years ago according to Legon…the council has described it ($64m) as the worst contract the school had gone for and they didn’t even inform government before going for the loan.
He added “UG needs to pay 10million dollars a year for 25 years and by the time they redeem themselves, they would have paid 250million. If they are not able to pay, their assets will be confiscated.”
The project was to consist of the construction of an expanded facility for the College of Humanities, a complex for the new College of Education, a new building complex for the College of Basic and Applied Sciences, a complex to house the Institute of Technology and Applied Science and a building for the College of Health Sciences to aid the university in relocating the medical school to the UG campus from its present location in the Korle Bu Teaching Hospital.
But the National President of the University Teachers Association of Ghana (UTAG), who is also a lecturer at The Department of The Study of Religions, University of Ghana, Dr. Harry Agbanu has described as unfortunate the decision by the minister to publicly discuss a matter that the university is trying to resolve.
According to Dr. Agbanu, it is unnecessary for the minister to attempt to score a political point on the issue.
“Yes I know to some extent the financial arrangement. What I am talking about is that this issue has come before the council and it’s been handled at a certain level, negotiating with our clients…and good progress is being made. So for a whole Minister of Education to go on air to be discussing an issue like this I think it is unfortunate.
“I don’t know what he wants to achieve by that and when he goes to say that there is no autonomy, I am so much afraid for that gentleman who calls himself the Minister of Education…that Universities do not have autonomy, they should not do anything on their own when government is unable to provide for the needs of the universities.
“Government is sitting there asking universities to pay 34 percent of their internally generated funds to government. Does that make sense at all? Must we play politics with every issue?”