The Centre for Environmental Management and Sustainable Energy (CEMSE), has called for the reduction of staff at Tema Oil Refinery (TOR) which is grappling with a significant overstaffing issue, with over 750 employees currently on its payroll despite the facility requiring only about 150 workers to operate efficiently.
This redundancy has been identified as a key factor exacerbating the company’s financial struggles, adding to its already mounting challenges of negative equity and annual losses.
“Surprisingly, a company that is making huge losses year on year with negative equities still keeps over 700 employees. TOR is currently overstaffed with over 750 employees, leading to redundancy. Meanwhile, at its current capacity, only 150 employees is needed to efficiently handle the operation of TOR.”
In a statement by CEMSE, the Tema Oil Refinery (TOR) is facing severe financial distress, with its equity plunging from a negative GH₵2.4 billion in 2019 to GH₵5.7 billion in 2023 which is a staggering 135% decline over four years.
“The Total Equity of TOR has been on a decline since 2019 signifying financial distress. In 2019, TOR recorded negative equity of Ghc2,444.16 million, which deteriorated to Ghc5,737.38 million in 2023, representing a worsened percentage change of about 135%. Total Equity declined annually by about Ghc823.31 million, representing about a 25.76% drop per year, with the average Total Equity standing at Ghc-3,581.67 million. This situation indicates that over Ghc6 billion would be required to improve the liquidity position and restore financial stability. However, given the current liquidity constraints of government, securing Ghc6 billion to turn it around and make it viable for business will be a challenge”.
According to CEMSE recommendations have been proposed, including filing for bankruptcy to allow the company to restructure under court supervision.
“The government could consider filing for bankruptcy to facilitate the reorganizing of the company under court supervision. This process will allow TOR to restructure its debts and operations while temporarily halting activities. Additionally, it will enable the government to rationalize payroll costs by retrenching redundant employees and streamline operations for efficiency”.
The government is urged to act swiftly, as over GH₵6 billion is required to restore the refinery’s liquidity and financial stability amidst the country’s broader economic constraints.
Below is the statement…
Current state of TOR and Institutional Recommendations
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