GOVT, SSHFC IN ROW OVER REPAYMENT OF 9.8 MILLION EURO LOAN
Social Security and Housing Finance Corporation (SSHFC) is in a tussle with the government over the repayment of 9.8 million euros loaned to government for the purchase of about 70 buses for the Gambia Transport Service Corporation (GTSC).
SSHFC management and board officials who were in parliament for the consideration of the corporation’s 2022 activity report and audited financial statement by deputies, disclosed that following the signature of the loan agreement, the government came back to say the loan portfolio be redirected to the GTSC for payment, which the corporation deemed a contravention since GTSC was not a signatory to the loan agreement.
Audit findings before the Public Enterprises Committee of the National Assembly revealed that the Office of the Vice President wrote a letter to the managing director of SSHFC on 12th August 2022 directing the corporation to upgrade GTSC by purchasing 100 buses. SSHFC responded to the directive on 17th August 2022 stating that they were not interested in purchasing any buses and that they can only do so by giving a loan to the government payable in five years at an interest rate of 6 percent with an yearly payment of D132 million.
But following the acceptance of these conditions, the government came back with another letter dated 15th December 2022 requesting SSHFC to redirect the loan agreement to GTSC.
Concerned with these developments, Niamina Dankunku lawmaker Samba Jallow asked for clarifications from SSHFC managing director Saloum Malang and board chairman Oreme Joiner.
Jallow argued that the contract was beset with a number of contradictions including the delivery of 70 buses as opposed to 100 buses and management’s failure to seek the approval of the board before going into the agreement.
Board Chairman Joiner explained that the loan was an investment which was why the board was not informed because management has the right to invest in government securities.
On the government’s directive for SSHFC to redirect the loan to GTSC, Chairman Joiner said: “Transferring the debt to GTSC was never discussed at the time [of signing the contract]. It was when they [government] were to make payment that the directive came to redirect the loan to GTSC. We vehemently refused and said GTSC never approached us for a loan, so we cannot ask them to pay. We told them not to renege and asked the government to pay. And for all these years, we have been trying to get the government to pay because we are not seeing this as a loan to GTSC.”
The chairman said he has made personal interventions to talk to the relevant ministry so that the government pays the loan as it was agreed upon but to no avail. “We spoke to the SOE Commission and they too have tried. But we were informed that the government will start paying from this [2025] budget but I don’t think that is on the table now because it seems it’s not there.”
Managing Director Saloum Malang explained that the number of buses to be procured was reduced from 100 to 70 because SSFHC informed the government that they could only finance 50 buses and they took on 20 extra buses after government pleaded that the UTG was going to move to Faraba and buses were required to transport students.
On the government’s directive for the debt to be transferred to GTSC, MD Malang argued: “As far as the corporation is concerned, the terms of the contract do not change from a legal perspective. We indicated that SSHFC has nothing to do with that request because GTSC is a separate legal entity, so they can only negotiate with them but that will not stop us from asking for our money. We have completed the supply of all the 70 buses, so we are now waiting for repayment from the government. The SOE Commission was engaged,” he added.
The managing director was subjected to some grilling after Kiang lawmaker Lamin Ceesay called him out for allowing the government to use pensioners’ funds into such an investment.
When asked if appraisals were conducted before signing the contract, MD Malang said that was not necessary.
“We had money at the banks and they were not being invested. Banks were not willing to take the risk. So we saw this as an opportunity and invested with an expectation of 6 percent.”
NAM Ceesay who was apparently outraged, replied: “Are you saying you cannot invest while money is waiting in your accounts until the government comes and asks for money? What is your role as MD when you cannot invest money entrusted to you from pensioners fund?
MD Malang replied: “Investment is not a one-day issue. Banks were scared of taking investments and monies were piling up.”
Ceesay defiantly charged: “Is the bank the only place for you to invest?
The director explained that investing in into other ventures required time.
Source: The Standard
