President of the University of Ghana Students’ Representative Council, Sylvester Owusu Amoako has opposed the possible privatization of some four halls in the university over the failure of management to repay a ¢43m loan facility contracted in 2008 for the construction of the halls. The loan which was released in three tranches has grown to ¢528m due to interests and other charges which have accrued over the past 10 years.
This development follows a law suit which was brought against the university by the consortium of banks in the agreement led by CalBank which ended with an order by the court for University of Ghana to pay off the accrued debt of ¢528m. The four halls in question; Hilla Limann, Alexander Adum Kwapong, Elizabeth Frances Sey and the Jean Nelson Aka halls, accommodate about 7,000 students whose fate hang in the balance with regards to whether or not the halls will be privatized.
Speaking on Campus Exclusive on Wednesday [May 8], the UGSRC President, Sylvester Owusu Amoako argued that government went back on its promise to help offset the loan and thus students should not be made to pay for management’s inability to contain government’s failure. While he called on government to assist the university in repaying the loan, as was earlier promised, he maintained that a privatization of the halls will be unbearable for students.
‘We cannot backlash government alone on this issue, the University of Ghana also has a role to play in doing something about the debt. If the argument is that the amount charged was not huge or big enough like that of Ghana Hostels talking about pent, TF, Evandy, where is the little that has accumulated over this time? If management cannot account for the monies received over the past 10 years or so, why should students be made to pay?’, he asked.
He went on to say that the sub-committee which was set up to evaluate the loan facility has been able to reach an agreement with the consortium of banks for a fifty percent (50%) reduction of the debt bill (¢528m) with the suspension of the plan to takeover the halls if only the university is able to make a good-faith deposit of ¢50m before the end of May.
‘We met the consortium of banks several times, they have agreed to go over the debt of 528 million cedis by 50%, bringing the amount to 264 million Ghana cedis. Now the issue comes down to the fact that the consortium of banks wants the university of Ghana to give a good faith deposit of 50 million Ghana Cedis by the end of May. If management is not able to meet this demand for a good faith deposit then all those facilities will be privatized’, he stated.
Though it is not clear how much exactly would be charged if the halls are privatized, reports indicate that the fees could be in the area of ¢2,300 as compared to the current ¢1,345 that is being paid by students.
Position of Management
Reacting to the same issues, Ag. Dean of Students’, Prof. Godfred Bokpin admitted that the university in its current state cannot cough out the 50 million Ghana Cedis being demanded by the banks within the time frame specified. He said that though the effect of this is the privatization of the halls, talks have been opened to find viable alternatives which will solve the matter without compromising the welfare of students.
‘We do not have the money to pay the 50 million Ghana Cedis, that I can tell you. But we are in talks with the banks, we do not want them to takeover the halls though that seems to be the only option now. There have been several meetings and we hope to find a middle ground and soon’, he stressed.
Meanwhile, students of the University of Ghana, led by the SRC President, Sylvester Amoako have taken to social media to push a campaign to prevent the privatization of the halls in question.
Impact on Students
In relation to the immediate impact to students, Prof. Bokpin hinted a gradual increase in the user fees for the said halls. In his defense, Mr. Bokpin argued that inflation and existing economic indicators are to blame for the inevitable increment in hall fees. He added that the cost of maintaining and running the hall has increased and as such has necessitated the consideration of the increase in hall fees.
“If you ask me fee increment will be far better than actually saying that the banks should auction the hostels. The impact of that would be significant compared to we having an intervention in place. I’m not saying that we should restore parity in the immediate, but the point is that we have to face reality even if it’s not because of the judgement debt remember that the cost of maintaining the hostels is increasing with time. So we can’t expect to keep the price at the same level and expect improved in the face of rising prices generally in the country’, he stressed.
University of Ghana in 2008 contracted a loan to a tune of GH¢43 million to construct four halls to close the deficit in residential spaces available to students. The newly built halls provided accommodation for some 5000 students. The rent for halls was expected to be pegged at commercial prices. This projection lasted for only a year and a half coming to an end in 2010 after student leaders mounted a resistance and appealed for the rent to be pegged above that of traditional halls and below those of the halls at the Northern sector of the campus (Ghana Hostels, T.F, Bani Hostels and Evandy).
Amidst the protests, the Government of Ghana intervened. Government’s commitment at the time was to offset the loans on behalf of the University. The University over the years made no attempts to document the decision of Government nor to service the loan they had contracted. Following that, the consortium of banks filed a suit at the court of which the verdict went in its favor.