A 25 million cedi legacy debt which was accumulated between 2012 and 2016 by the Ghana Post is affecting the growth of the company.
This is according to the Acting Managing Director, James Kwofie.
The debt consist of end of service benefit, provident fund arrears for staff and other statutory requirements.
The company also owed airline company KLM US800,000 which caused the airline to stop shipping parcels from Ghana Post, until last year when that money was paid.
Ghana Post run at a lost for several years due to low revenue generation. It was also faced with logistic constraint and lack of IT equipment including computers to boost its operations.
However, after a new management took over last year to rebrand the company, Ghana Post recorded a 25 percent growth in 2017.
But that is not enough to enable the company function effectively. Mr. Kwofie told Citi Business News the huge debt is affecting their rebranding efforts.
“It is a big burden on us right now. If you have to service a debt that was accumulated about 6 years ago today, then it will definitely drain the business. Money that you are supposed to do reinvestment with is now being used to service past debt. It keeps you stale and doesn’t allow you to move as quickly as you want to,” he lamented.
Meanwhile, the company is seeking a capital injection of 10 million dollars from government to revamp its operations.
He said the Information Ministry and the State Enterprises Commission have requested for proposals on how to revamp the post.
“Such funding will go into paitially legacy debt, Rebranding of the post and the upgrading of infrastructure, products development and marketing,”he explained.
Mr. Kwofi is however optimistic various initiatives being undertaken by management will help double revenue generation in the next four years.
Source: Citi Business News