In 2009, Africa Automobile Limited secured a resounding judgment debt against the Government of Ghana and due to the government’s lack of fulfillment of this debt obligation over the years, the interests accrued has caused the debt to balloon to a whopping GHS1.5 trillion.
The said judgment arose out of a contract for the provision of automobile services rendered by the Africa Automobile Limited to the Ministry of Employment, causing the country’s High Court to award the company a judgment as far back as 2009.
The government actually made an appeal of the judgement but lost with the Court of Appeal further confirming the judgment of the High Court and went on to award an amount of GHS16,565,396.22 in favour of Africa Automobile Limited.
Since then, the figure due and payable to Africa Automobile Limited has shot up astronomically due to non-payment of the said sum by the Ghanaian government.
And as it goes by way of accounting and finance, the amount to be paid would keep rising until the said figure is settled by the government. Further delay will see a continued accrual of interest leading to an exponential rate given that the interest rate is compounding.
There are reports that because government failed to secure a voluntary payment of the amount all these years, the company is planning to go into full execution against the state.
Reports indicate that the Ministry of Finance recently made attempts to compromise the judgment and secure a reasonable payment, but it appears that this has however slowed and this is a reason why the company is readying to tow the enforcement of the judgment route.
Analysts are of the view that, at the current rate of growth in the amount owed under the judgment, any failure to pay or settle on a compromised amount to be paid will imply that the amount would exceed GHS2 trillion by the end of 2020 and beyond.
Random African loves writing about the African continent. He is consistently in touch with happenings in every part of the continent and derives joy from providing fresh and crisp information for his audience.