Business News of Thu, 9 Nov 201714
Minority manufacturing figures in Energy Bond critique – Oppong Nkrumah
The Deputy Minister of Information, Kojo Oppong Nkrumah, has questioned the figures being used by the Minority in Parliament in their claims that the Finance Minister, caused financial loss to the state with the recent issuance of the Energy Sector Bond.
The deputy Minister said the Minority was “pulling the figures from the air” rendering its assertions baseless.
“The facts don’t support the narratives they [the Minority] are trying to put out,” Mr. Oppong Nkrumah stated on Eyewitness News.
The Minority at a press conference on Wednesday argued that there was some negligence on the part of the government because it did not follow investment advice from the International Monetary Fund, among others.
ESLA PLC, the independent special purpose vehicle sponsored by Ghana, pegged the bond at a B-stable rating, and the Minority contended that the government should have gone to the financial market on the strength of this rating, thus saving some 200 basis points that translated to GHc 1.2 million.
Because of this, the Minority is pushing for the Finance Minister, Ken Ofori-Atta to be hauled before Parliament.
Mr. Oppong Nkrumah reminded that the government could have gotten us much as GHc 5.32 billion for the bond issue instead of the eventual GHc 4.7 which some have been described as unsuccessful.
“When the window was extended, we got a total of GHc 5.32 billion, but because of the interest rates, the government decided to settle on about 4.7 billion,” he said.
“A lot of the things our friends in the Minority come up with, sometimes you wonder where they are really getting these figures from, whether they are on their own coming up with these figures or whether the figures are the facts.”
The energy bond was issued to offset the legacy debts of the energy sector estimated at GHc 10 billion.
The seven-year component raked in GHc2.4 billion as targeted, at an interest rate of 19 percent.
However, the 10-year bond failed to hit the GHc 3.6 billion mark. It accrued some GHc 2.29 billion at an interest rate of 19.5 percent, meaning, the total amount received was about 22 percent less than the targeted GHc 6 billion.