Minority raises red flag over VTB loan

The Minority, New Patriotic Party (NPP), has raised red flags on the decision of Government to procure a $300-million credit facility from the VTB Bank Capital of Russia to enhance international peace-keeping operations.

The NPP said although it is not against the improvement of the operational facilities of the Ghana Armed Force the profile of the VTB loan facility is simply not good and bogus, adding that it is “one of such un-scanned procurements that had already landed the country in a mess”.

At a news conference at Parliament House in Accra, the Minority called on the Government to abandon the chase for the VTB facility in the face of her decision to seek a bail-out from the International Monetary Fund (IMF) to avoid Ghana being sanctioned by the European Union (EU) and the United States.

Dr Anthony Akoto Osei, Minority Spokesperson on Finance, queried the basis of the approval of the loan agreement which calls for further consultations.

He recalled that the Minority Members on the Finance Committee did not support the recommendations for approval of VTB as presented to the House.

The Committee’s report which was ready on April 1, during the first meeting of Parliament was not laid before the House, because the Speaker, persuaded by the arguments of the Minority agreed on further consultations in addition to further due diligence and creating space for the Attorney General’s advice on some of the obligations of the Lender and Arranger, he said.

Dr Osei observed that the same report in the original shape and form was what the House approved of during the just-ended second meeting in Parliament, which makes the Minority’s objection to the facility as presented to the House earlier still relevant.

“In this very first dealing with the Republic of Ghana VTB Capital is to act as Lender, Arranger and Facility,” the Minority noted, and called the pact “an unholy trinity of an arrangement”.

The NPP said the agreement “is an illogicality, unjustifiable,” and engendering a conflict of interest situation on the part of VTB Capital.

According to Dr Osei, said VTB, is only part lender, and as a lead arranger to source funds to complete the loan.

He alleged that Parliament, through the Majority National Democratic Congress side had approved the syndicated loan without knowing the other lenders who are to provide funds.

The Minority revisited the futility with which it drew the Government’s attention to, in the agreements on the CBD loan the STX housing deal, and reminded Ghanaians that similar alarm bells are ringing on the VTB pact.

It has become difficult to for the VTB, a Russian bank to secure a loan to its partners in the US, because of American and European sanctions on Russia for invading Ukraine.

It also called into question a lack of due diligence on the part of the Bank of Ghana and the National Security and queried if value for money would be achieved if the London Inter Bank Borrowing Rate (LIBOR) of +7 per cent is satisfies value for money as compared to the CBD loan a 15-year loan had an interest rate of +2.95.