The Controversial Sale of SSNIT Hotels: An Almost Blow to Ghanaian Pensioners

Story by; Antoinette Osei Banahene

The sale of the four hotels owned by the Social Security and National Insurance Trust (SSNIT) in the country has sparked considerable controversy and public debate. The properties—La Palm Royal Beach Hotel, Elmina Beach Resort, Labadi Beach Resort, Busua Beach Resort,  Trust Lodge Hotel and Ridge Royal Hotel —were almost being sold to Honorable Bryan Acheampong, the current Minister for Food and Agriculture, under his company, Rock City Hotels Limited, but for the interception of the Member of Parliament for North Tongu, Honorable Samuel Okudzeto Ablakwa.

In a post made by Hon. Okudzeto Abkawa, on the 17^th of May, 2024, he alleged that his interception of certain classified documents reveals that sixty percent of the above-mentioned hotels were being sold to Hon. Acheampong and negotiations seemed to have advanced.

This revelation was met with widespread criticism, particularly from pensioners and members of organized labor who rely on SSNIT for their livelihoods.

Background, Justification of Sale.

SSNIT, established to manage the social security contributions of workers in the country, has long invested in various sectors to generate returns that support pension payments. The hospitality sector, represented by numerous hotels and guest houses was one such investment. Despite their historical significance and potential for revenue generation, SSNIT’s management argued that the hotels were not yielding the expected returns and were a financial drain due to high maintenance costs and operational inefficiencies. According to the Director General of SSNIT, Mr. Kofi Bosompem Osafo Marfo, in a press briefing on July 8, the operation and management of the SSNIT hotels was capital-intensive and was not yielding any dividends, hence selling them was the only option available.

In the press briefing he stated, “If you look at these hotels, they are capital-intensive businesses, they require… continuous capital expenditure. SSNIT doesn’t have the necessary funding to do that. The businesses have been making consistent losses…we are looking to resolve a problem and do so with the introduction of a strategic investor and we outlined the reasons there.”

Furthermore, in an article published by Mr. Osafo Marfo in The Chronicle Newspaper on June 13, he indicated that the sale of the hotels was put up for public bidding as opposed to it being an inconspicuous bid as suggested by nay-sayers. And thus, Rock City Hotel Limited submitted the best and strongest technical and financial proposal amongst those received to purchase the 60% stake in the hotels, justifying the choice of Rock City Hotel Limited.  He further stated that Hon. Acheampong did not breach any procurement laws by choosing to buy the hotels as being perpetuated by the opposition, the National Democratic Congress.

Controversies.

In spite of the very appealing reasons Mr. Osafo Marfo provided the public as the justification for selling off the sixty percent stake, pensioners, members of the labor union amongst other individuals and regulatory bodies in the country found it rather careless.

It begun with the removal of Dr. John Ofori-Tenkorang as Director-General and swiftly replacing him with Mr. Osafo Marfo who quickly initiated the sale of the 60 percent stake, a move most stakeholders condemned.

This led to strike actions from the various labor unions in the country and a protest led by Hon. Okudzeto Ablakwa.

In a press statement released by the Centre for Ethical Governance and Administration, the body condemned the procurement process describing it as riddled with lack of transparency, corruption and procurement breaches. The body further raised issues of conflict of interest as the bidder serves in government and may have the power to tweak results in his favor in the instance of losing the bid. Hence, the body advised SSNIT to cancel the bidding process and called for the them to step down as they cannot be trusted with future dealings.

DEAL ABORTED

The backlash from pensioners and organized was swift and intense. Many argued that the hotels represented stable, long-term investments, and their sale indicated a failure of SSNIT’s management. Due to the heavy backlash from the citizenry, the deal was aborted and Ghana saved her dear property.

MY TWO CENTS ON THE ISSUE

I believe that the government had several alternatives to selling the hotels. Firstly, SSNIT could have explored partnerships with private sector entities to improve the management and profitability of the hotels. Public-private partnerships (PPPs) are a common strategy to leverage private sector efficiency while retaining public sector oversight.

Additionally, there could have been efforts to refurbish and rebrand the hotels, capitalizing on Ghana’s growing tourism industry. This would have not only potentially increased profitability but also preserved jobs and maintained national assets.

Transparency and stakeholder engagement are essential in such decisions. SSNIT could have conducted a thorough audit, publicly shared the findings, and held consultations with pensioners and other stakeholders to explore viable alternatives.

On less serious note, I suppose that indeed, the SSNIT management should have been dissolved and Hon. Bryan Acheampong hired as Director-General of SSNIT so he could manage the hotels as well as he manages Rock City Hotel Limited.