BoG clears Finance Minister over $2.3bn bond

Officials of the Bank of Ghana (BoG) have exonerated the Minister of Finance, Ken Ofori-Atta, of any wrongdoing in the $2.25 billion bond issued in April, 2017.

The Head of Financial Management Service at the BoG, Stephen Opattah, insists that no single individual can skew the issuance of bonds to favour one person or another.

He indicated that given the operations of the bond issue, it’s practically impossible for anyone to predetermine who the investor will be.

Mr Stephen Opattah’s comments, which were made before members of the Public Accounts Committee (PAC) of Parliament yesterday, followed allegation by the minority National Democratic Congress (NDC) in parliament that the Finance Minister had “cooked” the $2.25 billion bond for his friend and business partner, Trevor Trefgarne, who is a director of Franklyn Templeton – the company that bought 95% of the bond.

Member of Parliament (MP) for Effutu, Alex Afenyo Markins, had smuggled in the question on the $2.25 billion bond after his first attempt was shot down by the chairman of the PAC, James Klutse Avedzi.

He got the answers from both Stephen Opattah and the Second Deputy Governor, Johnson Asiamah.

“In such a system you cannot predetermine who the investor will be,” Opattah stressed.

Mr Johnson Asiamah insisted that it was impossible for a bond to be issued in secrecy.

According to him, in the beginning of every year, government announces its borrowing plans which are available for all investors and potential investors to bid for and can therefore not be a secret transaction.

The deputy governor explained that when the government goes for international bond, the monies are paid into the accounts of the international branches of the BoG – say New York branch or London branch.

According to him, when the money is paid in dollar denomination, it is not immediately surrendered to the main office so it could be counted as part of receipts of the bank until the government starts spending the money in cedis before it is seen as surrendered.

On the recent $2.25 billion domestic bond, he said that government had started spending the money so it is now surrendered and being paid in cedis.

Mr Asiamah gave the assurance that the foreign exchange rate would be stabilized this year because the macro is aligning very well and that could be seen in why the rate has virtually stabilized over the past month.

Foreign Receipts

Another issue that generated heat at yesterday’s public sitting of the PAC was foreign receipts on the export of bauxite which were not captured in the Bank of Ghana’s Statement of Foreign Exchange Receipts and Payments audited by the Auditor-General’s office in 2015.

Mr Afenyo-Markin, who questioned why the receipts covering bauxite were omitted from the bank’s statement, said at least he was aware that in the year under review, not less than 40,000 metric tonnes of bauxite was exported by the Ghana Bauxite Company, and therefore he found it strange that the receipts covering the exportation had not been captured by the Bank of Ghana.



The second deputy governor, Dr Johnson Asiamah, who led the BoG officials, said that it was not an intentional act and therefore must not be seen as an omission since the Ghana Bauxite Company is given 100% retention.

He said that the workings are based on certain concepts and that they would have to crosscheck and come back to brief the committee again and clarify why that was not included in the statement.

Dr Asiamah indicated that compilation of data at the bank is not all that easy and that every data presented to the International Monetary Fund (IMF) for review is done meticulously to avoid any embarrassment and mistrust.

He noted that since the media were covering the sitting, he would not like to delve much into that and that officials would get back and find out what went wrong and prepare the bauxite receipts for the perusal of the committee.

The chairman of the committee, Mr James Klutse Avedzi, implored members to give the bank officials the benefit of the doubt and allow them to go and come back with a proper report on the bauxite receipts

Members of the committee also questioned why miscellaneous payments increased hugely from $366 million in 2014 to $550.4 million in 2015 and that there was the need for the bank to break down the expenditure on miscellaneous items.

Student Allowances

There were also some concerns raised by some members on the allowances paid to Ghanaian students abroad and sponsorship for staff of the Ministry of Foreign Affairs increasing from $12.7 million in 2014 to $22.4 million in 2015, but the deputy governor said the bank only pays when instructions are given to it by the ministries or government officials to do so.

He, however, explained that payments are not done all the time on wholesale basis.

He said that sometimes payments depend on the availability of money and the urgency of the matter.

In the BoG’s statement on the receipts and payments, receipts on cocoa increased significantly from $376 million in June, 2015 to $3.9 billion in December, 2015.

Receipts on gold, however, dropped with total receipts decreasing from $238.8 million in January, 2015 to $205.8 million in June, 2015.

Total receipts by the bank in the first half of 2015 totalled $3.82 billion as against the projected figure of $5 billion.

An amount of $3 billion was received within the same period in 2014.

PAC will continue with its sitting today with officials of the Ministry of Food and Agriculture set to appear.