Business News of Mon, 13 Nov 20178
ESLA bond: Be hard on government – Minority to media
The Minority Leader in Parliament, Haruna Iddrisu has said that the issues they raised regarding the energy bond cannot be described as propaganda as being reported in the media.
He has rather urged the media to hold the Akufo-Addo government to account as far as the bond is concerned instead of branding the minority's claims as propaganda.
The Minority had said earlier that the government spent GHS177 million on the issuance of the 10-year and 7-year energy bond.
Former deputy finance minister and minority spokesperson on finance Cassiel Ato Forson told journalists on Thursday, 9 November that it was befuddling that the government spent GHS87 million on administrative expenses and GHS400, 000 on the printing of material for the energy bond roadshow.
In his view, there is something “fishy” about the whole deal.
“From the cost that I have that the taxpayer is paying; the state is paying the arrangers, the banks, GHc87.5 million. The state is paying legal fees of GHc700, 000; the state is paying the accountant, GHc350, 000. Surprisingly, the state is paying administrative expenses of GHc80 million. Overall the state is paying GHc177 million. I think this amount is way too much.”
“This is not the first time the state is raising a bond. The last bond we raised under the Eurobond of $1 billion which translates to about GHc4.4 billion, the total cost was under 0.2 percent. Today, we are seeing a bond that we are raising for about 4 billion and the cost is about 1.77 percent.
But the Ministry of Finance said in a statement that the Minority’s statement was fraught with various factual untruths which appear to be deliberately spun to allow them to reach their own preferred conclusions.
“First, the claim that the 7-year bond closed at GH¢1.5 billion is not accurate. Published information by E.S.L.A. PLC indicates that the 7-year bond was oversubscribed at GH¢2.53 billion. E.S.L.A. PLC chose to accept GH¢2.4 billion at the cut-off interest rate of 19.0%;
“Second, the claim that the 10-year bond was first closed at GHC760 million again is false. Bids received in the first week amounted to GH¢872 million and not GH¢760 million as claimed by the minority. This information is public and verifiable;
“Third, the minority claims the 10-year bond after extension closed at GH¢2.2 billion. Again false. Total bids received for the 10-year bond was GH¢2.79 billion of which E.S.L.A. PLC accepted GH¢2.29 billons at an interest rate of 19.5%”
But speaking at a roundtable on the yet-to-be read 2018 government budget statement organised by the Minority in Parliament, Mr Iddrisu said: “Let me make an appeal to you the media that we expect that a ruling government will enjoy some romance for one year but we expect that when a political opposition and a ranking member on Finance raises an issue that we want to understand how GHS177 million have been spent in the issuance of bond, it is not for you the media to go and publish that as propaganda.
“Go behind the veil and interrogate what he has said and interrogate what government has also said, you don’t need to describe our concerns as political propaganda. You owe it a duty to keep the Ghanaian public adequately informed about the actions of government and, therefore, we will expect that just as you held us to the word, you will do [same]. ‘Give to Caesar what is Caesar’s’”.
“You are not interested when GHS177 million has been used in issuing a bond particularly when in September 2016, now Vice-President Bawumia at the economic lecture at the Central University demonised and nearly criminalised borrowing. Few weeks ago we saw him with the Minister of Finance wanting for extension of time to borrow, yet they could not get money to borrow.
“So we are saying that interrogate the issues, they said that it was wrong to borrow, now they are borrowing, the ranking member, Casiel Ato Forson has said we risk becoming a debt-ridden country.”