The Minister of Employment and Labour Relations and MP for Sunyani West , Hon. Ignatius Baffour-Awuah , says the National Pensions Regulatory Authority, NPRA has approved the 60 percent sale of SSNIT’s shares in its hotels.
He said all due processes regarding the sale had been complied with. He said SSNIT can only go ahead with the sale when NPRA had given the green light.
He said SSNIT believes the sale is a strategic decision after multiple attempts at restructuring its hotels proved insufficient. Mr. Baffour Awuah, made this known in Parliament in answer to an urgent question on the sale filed by MP for North Tongu Samuel Okudjeto Ablakwa.
“Mr Speaker, SSNIT’s decision to divest 60 percent of its stake in the hotels is not an isolated decision but part of its broader strategy to improve its investment performance and ensure the long-term sustainability of the Scheme,” he said.
Mr Baffour Awuah said despite these efforts, returns from the Hotels were either low or negative, as a result SSNIT could not afford to continue spending pensioners’ funds to bail out these Hotels.
He said the sale of the majority stake in the Hotels formed part of SSNIT’s broader strategy to enhance the performance and sustainability of the Scheme’s investment.
“Mr Speaker, it is worth noting that having a majority stake or wholly owing a company does not guarantee performance.”
He said for instance SSNIT minority stake in companies such as West Hill Mall Limited, GCB Bank, Republic Bank Ghana, Goil Ghana Ltd, Ecobank Ghana and Standard Chartered Bank Ghana; saying “despite SSNIT Minority stake in these companies, returns of SSNIT’s investment in these companies have been positive and relatively higher.”
“Yes, it is true that NPRA came up with a directive, but I would appreciate it if my brother, my colleague, really read the directive from NPRA.
It said it needed to be furnished with all information relating to the sale of the hotels, which SSNIT has since done that,” he said.
“So, it wasn’t like a direct something that SSNIT should not go ahead to do anything, but then, SSNIT can only go ahead when NPRA, which is the regulator within the field, had actually certified that they have seen all the documentation and the processes, and they think that we are good to go.”
The Minister also addressed the rationale behind the sale saying: “SSNIT considered only the sale of shares for its hotel investment portfolio as a strategic decision after multiple attempts at restructuring proved insufficient.
“70-60 percent of its shares are deemed the most viable solution to prevent further depletion of resources and to bring in private participation.”
“Is it a good business activity? Yes, I want to believe my colleague is listening to me fully, well because I answered by saying that some of the investments are either making low returns or making losses.
“So it is not in all cases that we are making losses, but even for those that are making profits, the returns are low.”
The sale is expected to improve the long-term health of SSNIT’s investment portfolio and potentially lead to a revitalization of the hotels under new management.
The supposed agreement to sell 60% stake in the four major hotels under the SSNIT Umbrella to Rock City Hotels owned by incumbent Minister of Agriculture , Hon. Bryan Acheampong has drawn widespread concerns in the public space due to issues of conflict of interests which was raised once the deal became public.
