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NDC WILL ANSWER FOR MISMANAGEMENT OF KOMENDA SUGAR FACTORY PROJECT, SAYS ALAN

Politics

The Minister of Trade and Industry, Alan Kyerematen, says his ministry is awaiting the findings of a forensic audit by the independent international transaction advisor PricewaterhouseCoopers (PwC), before taking any necessary action regarding valuation of the Komenda Sugar Factory.

The Minister of Trade and Industry, Alan Kyerematen, says his ministry is awaiting the findings of a forensic audit by the independent international transaction advisor PricewaterhouseCoopers (PwC), before taking any necessary action regarding valuation of the Komenda Sugar Factory.

“I want to wait for one thing to happen. Those who are talking will stop talking. I have asked [consultants] to accelerate work on the forensic audit to allow people to answer for how a $35 million facility used to acquire equipment has now been devalued to $12m.

“People have to answer. Everybody who comes says, ‘This thing cannot cost $35m.’ This is not government doing the evaluation. There is an international transaction advisor company involved in this valuation,” he said.

Mr Kyerematen made this known when his ministry took its turn yesterday at the Meet the Press series in Accra.

Abnormal depreciation

The Minister, who could not conceal his displeasure, wondered how a $35m project could lose value so quickly.

“Even the one who was supposed to have won the bid later said the factory is not worth the amount,” Mr Kyerematen said. “He thought they were going to use that money to recapitalise the business and not to pay for the factory.

“Even if you use normal depreciation for five to ten years, it will not devalue like that. So let’s wait till the forensic audit comes out.

“You cannot have a situation where everybody says the factory cannot cost $35m.

“When PwC did the valuation, it was $12m and it is consistent with the work of my technical team,” he said.

Beset by challenges

In 2016 the John Mahama government secured a $35m Indian Exim Bank facility to set up the factory.

A $24m facility was also set aside to support outgrower farmers.

The factory, after opening to great fanfare on May 31 2016, has been idle because of severe deficiencies in planning for the project, as well as other financial, technical and legal challenges.

It closed down in June 2016, barely a month after then President John Mahama commissioned it.

1D1F updates

On the progress of the flagship One District, One Factory (1D1F) programme since its launch in 2017, Mr Kyerematen said that there are 181 projects. Of this number, 129 are new factories while the rest are existing firms.

Fifty-seven factories are currently operating, he said, and 22 are still under construction.

Giving a breakdown of the figures, the Trade Minister said 33 factories which are being financed by seven Ghanaian banks will commence implementation before the end of 2019. Another 56 small-scale processing facilities, financed by the African Development Bank (AfDB), will launch before the end of 2019.

The Minister said $200,000 has been earmarked for each of these 56 projects. They will be owned by youth groups which will be trained to manage the facilities, ensuring that young Ghanaians are not left out of 1D1F.

He said in communities where there may be an abundance of certain agricultural commodities, smaller processing plants will be established to help reduce post-harvest losses.

Mr Kyeremanten also noted that the AfDB has earmarked $2m to commence the implementation of five common user-processing facilities which will be managed by farmers’ groups.

In addition, he said, a group of Chinese banks has earmarked $400m for eight projects. These will be ready to begin implementation before the end of the year.

Industrial parks

Mr Kyerematen also told journalists that so far there are nine industrial parks in four regions (Ashanti, Greater Accra, Upper East and Western) at various stages of completion.

They are the Dawa Industrial Park, Appolonia Business City, West Park Industrial Estate, Sekondi Export Processing Zone, Shama Industrial Enclave, Silicon Technology Park, Builsa Agro-Industrial Park, Tema Export Processing Zone and Greater Kumasi Industrial City.

All of these projects are private-sector developments.

Strategic

The Minister said the government has introduced a “Strategic Anchor Industries” initiative to diversify and introduce new growth poles for the Ghanaian economy.

The critical industries under this initiative are integrated bauxite and aluminium, iron and steel, petrochemicals, vehicle assembly/automotive industry, pharmaceuticals, industrial chemicals, garments and textiles, vegetable oils and fats, industrial starch and machinery and equipment manufacture.