The Tema Oil Refinery (TOR), Ghana’s leading petroleum processing plant, is facing a severe financial crisis, with its equity dropping from GH¢2.4 billion in 2019 to a deficit of GH¢5.7 billion by 2023.
A 135% decline sparks major worries about the refinery’s financial stability and long-term prospects.
On January 23, 2025, the Centre for Environmental Management and Sustainable Energy (CEMSE) revealed troubling figures highlighting the structural inefficiencies and ongoing losses at TOR, a long-standing pillar of Ghana’s energy sector.
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TOR’s financial struggles have been evident since 2019, with average annual losses of GH¢793 million. Net losses reached GH¢1.6 billion in 2022 and GH¢1.3 billion in 2023, reflecting a consistent decline in profitability and negative returns on assets.
Despite its expansion from a tolling refinery under its original Ghanaian Italian Petroleum Company (GHAIP) framework to a multifaceted operation that includes importation, storage, and distribution of petroleum products, TOR has failed to achieve financial stability.
One of TOR’s critical challenges is overstaffing. The refinery employs over 750 workers, far exceeding the 150 personnel required for optimal operations. This inefficiency has further strained its already precarious financial position, prompting calls for immediate workforce restructuring.
CEMSE has proposed three options to address TOR’s deteriorating situation including filing for bankruptcy. A court-supervised bankruptcy process, they argued, could allow TOR to restructure its operations, renegotiate debts, and rationalize its workforce while preventing further financial losses.
Alternatively, they said the government could stabilize TOR through a targeted liquidity injection and explore debt restructuring mechanisms, such as debt-for-equity swaps, to improve governance and asset management.
Also, they recommended engaging private sector operators through concession agreements. This they said could bring in capital and expertise to enhance TOR’s efficiency while retaining state ownership. Rigorous oversight would be critical to safeguard public interests.
The future of TOR is vital for Ghana’s energy security and overall economic stability, but its persistent financial troubles and operational inefficiencies present serious challenges.
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Samuel Kwame Boadu is a Ghanaian entrepreneur, writer, and digital consultant passionate about creating impactful stories and business solutions. He is the Founder & CEO of SamBoad Business Group Ltd, a dynamic company with subsidiaries in digital marketing, logistics, publishing, and risk management.
