Business News of Thu, 9 Nov 20170
Minority blasts government over GHC6bn energy bond
The minority National Democratic Congress (NDC) in parliament yesterday lambasted the government for the issuance of an aggregated GH¢6 billion energy sector bond over a 17-year period.
At a press conference yesterday to respond to the issuance of the bond, the minority members, led by the spokesperson on finance, Cassiel Ato Forson, attacked Vice President Dr Mahamudu Bawumia – who is the head of government’s economic management team – for bringing untold embarrassment to the country by sanctioning the energy sector bond, which according to them, turned out to be energy sector ‘bomb.’
The minority said the unexpected financial loss resulting from the issuance of the bond, is estimated at GH¢120 million and that that could have been used to finance the free senior high school policy which it noted, the government is struggling to get funds to support.
The minority said that after extensive international road show on the energy sector bond which ended in London, the government was only able to raise GH¢1.5 billion out of the first GH¢2.4 billion, while an abysmal GH¢760 million was raised from the second bond of GH¢3.6 billion – representing 21% before a further extension was able to rake in GH¢2.2 billion.
According to Mr Ato Forson, the fanfare alone for the extensive international road show also cost the nation a whopping $108 million, which the minority said it was ready to address at a different forum.
Mr Forson, former minister of finance and economic planning, indicated that from the way the economy of the country is being managed under the New Patriotic Party government, there is no doubt that the NDC government under former President Mahama, had a better economic management team than the current one under Dr Bawumia – after a flourishing economy was bequeathed to the NPP.
“According to the prospectus issued by the minister of finance, the status of the bond is senior, unsecured bonds backed by assignment of the Energy Sector Levy Act (ESLA) receivables by the sponsor to the issuer under the assignment agreement dated 12th October, 2017,” the minority spokesperson said, stressing that quite surprisingly, the status as communicated by the minister, was full of contradictions.
He further explained that ESLA, as the name implies, is a tax revenue which came into force by an Act of Parliament, adding that assigning a parliament-backed levy is in itself a government guarantee and cannot be interpreted as ‘unsecured.’
The minority therefore questioned the current status of the ESLA, which the then presidential candidate, Nana Akufo-Addo (who is now the president) promised during the electioneering campaign to scrap when voted into power.
The NDC has therefore, called on the finance minister to come to parliament to brief the house on why such a transaction did not come there (parliament) for ratification – in breach of the Constitution – since assigning the Energy Sector Levy Act to the issuers amounts to collateralization of tax revenue without prior approval of parliament.