A dispute has arisen between the government and the Social Security and Housing Finance Corporation (SSHFC) regarding the repayment of a 9.8 million euro loan that was given to the government for the purchase of roughly 70 buses for the GCTC.
When the government returned after the loan agreement was signed to request that the loan portfolio be sent to the GTSC for payment, SSHFC management and board officials who were in parliament to review the company’s 2022 activity report and deputies’ audited financial statement revealed that this was a violation because GTSC was not a signatory to the loan agreement.
The Office of the Vice President instructed the managing director of SSHFC in a letter dated August 12, 2022, to upgrade GTSC by buying 100 buses, according to audit findings presented to the National Assembly’s Public Enterprises Committee. In response to the directive on August 17, 2022, SSHFC stated that they had no interest in buying any buses and that the only way they could do so was to lend the government money, which they would have to pay back over the course of five years at a rate of six percent interest, with an annual payment of D132 million.
However, the government returned with a second letter on December 15, 2022, asking SSHFC to reroute the loan agreement to GTSC after these conditions were accepted.
Concerned by these developments, Niamina Dankunku lawmaker Samba Jallow questioned board chairman Oreme Joiner and SSHFC managing director Saloum Malang for clarifications.
Jallow claimed that there were several inconsistencies in the contract, such as the fact that only 70 buses were delivered instead of 100 and that management neglected to get board approval before entering into the contract.
Board Chairman Joiner clarified that the board was not notified because the loan was an investment and management is permitted to purchase government securities.
Chairman Joiner responded to the government’s order for SSHFC to reroute the loan to GTSC by saying: “Transferring the debt to GTSC was never discussed at the time [of signing the contract].” The directive was issued to reroute the loan to GTSC when they [the government] were due to make payment. We strongly objected, stating that since GTSC never asked for a loan, we couldn’t demand payment from them. We urged the government to make the payment and warned them not to back down. We have been attempting to get the government to pay for all these years because we do not consider this to be a loan to GTSC.
The chairman claimed that, in vain, he had personally intervened to speak with the appropriate ministry to get the government to repay the loan as agreed. “The SOE Commission, with whom we spoke, has also made an effort. Although we were told that the government would begin making payments from this [2025] budget, I don’t believe that is currently on the table because it doesn’t appear to be there.
Saloum Malang, the managing director, clarified that the number of buses that needed to be purchased was lowered from 100 to 70 because SSFHC told the government that they could only afford 50 buses. The government then begged for 20 more buses, stating that buses were necessary to transport students when the UTG moved to Faraba.
“From a legal standpoint, the terms of the contract do not change as far as the corporation is concerned,” MD Malang contended in response to the government’s order that the debt be transferred to GTSC. Since GTSC is a different legal entity, we stated that SSHFC has no involvement in that request and that they can only negotiate with them; however, that does not stop us from requesting our money. We have finished supplying all 70 buses, and we are currently awaiting payment from the government. He also stated that the SOE Commission was involved.
The managing director was grilled after Kiang lawmaker Lamin Ceesay criticised him for permitting the government to invest pensioners’ money in this way.
In response to the question of whether appraisals were carried out prior to contract signing, MD Malang stated that they were not required.
“We had money in the banks, but no one was investing it. Banks didn’t want to take the chance. We therefore took advantage of the situation and made an investment with a 6% return in mind.
Apparently incensed, NAM Ceesay responded, “Are you saying that you can’t invest while funds are sitting in your accounts until the government comes and demands money? If you can’t invest the money that has been entrusted to you from the pensioners fund, what is your role as MD?
In response, MD Malang said: “Investment is a long-term problem. Banks were reluctant to accept investments, and money was accumulating.
Defiantly, Ceesay demanded: “Do you only invest at the bank?
According to the director, it took time to invest in other projects.
