COVID-19 crisis forced GIMPA to borrow for operations – Prof Bonsu

The Director of the Ghana Institute of Management and Public Administration (GIMPA), Professor Samuel Kwaku Bonsu, has disclosed that the COVID-19 pandemic forced the institution to borrow money to sustain its operations after its revenue was severely disrupted.

Prof Bonsu said GIMPA went for approximately 11 months without generating income after the institution was shut down as part of measures to contain the spread of the virus.

Despite the loss of revenue, however, the institution continued to incur significant expenses, including salaries and other operational costs.

“We were not working, but we were being paid,” Prof Bonsu said.

Speaking on Joy FM’s Super Morning Show on Friday, September 11, Prof Bonsu said GIMPA’s financial position deteriorated as the shutdown persisted, eventually exhausting the institution’s reserves.

He explained that the situation was particularly challenging because GIMPA operates with financial autonomy and does not receive regular government funding to meet its day-to-day operational expenses.

After its reserves were depleted, management sought government support and was subsequently led into borrowing to keep the institution running.

Borrowing for recurrent expenditure

Prof Bonsu described the decision as an unusual financial challenge because, unlike conventional borrowing for infrastructure or investment, the funds were primarily used to meet immediate operational needs.

“For the first time, we had to borrow for direct consumption,” he explained.

According to him, the borrowing created a significant debt burden that management had to address after he assumed office.

He said the financial crisis at the time posed a serious threat to the institution’s survival.

“Bankruptcy was very real at the time,” he stated.

GIMPA imposes austerity measures

To prevent the situation from worsening, management introduced strict austerity measures and tightened controls over institutional expenditure.

Prof Bonsu disclosed that, at one point, spending above a specified threshold required his written authorisation.

He said the measure was necessary to ensure that the institution exercised maximum caution in managing its limited resources.

The financial difficulties also prompted GIMPA to review its internal structures and operations as part of efforts to restore its financial sustainability.

Management subsequently embarked on reforms aimed at reducing unnecessary expenditure, eliminating redundancies and improving efficiency.

Some schools and departments were consolidated as part of the restructuring, while student numbers were also reviewed to ensure that the institution was not admitting more students than its resources could adequately support.

Balancing enrolment with financial sustainability

Prof Bonsu explained that increasing student enrolment does not necessarily improve an institution’s financial position if the cost of providing education and other services exceeds the revenue generated from fees.

He said GIMPA therefore had to strike a balance between increasing revenue and maintaining the quality of services provided to students.

Beyond the financial measures, Prof Bonsu said the institution also focused on restoring GIMPA’s reputation, strengthening its academic programmes and deepening its engagement with government agencies.

He said the difficult decisions taken during the period were necessary to place the institution on a more financially sustainable path.

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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.