Business News Wed, 31 May 2017
The Minority in Parliament will kick against the planned issue of a 15-year bond to clear energy sector debts if the Akufo-Addo administration does not come clean on key details about this particular bond.Speaking on Eyewitness News, NDC Member of Parliament for Yapei Kusawgu, John Jinapor, said the Minority is trying to avoid the controversy that engulfed the $2.25 billion domestic bond issued in April 2017.
The Minority has already called for a full-scale parliamentary probe into the $2.25 bond issue, amidst concerns over the perceived claims of secrecy and conflict of interest.
For this 15-year bond, Mr. Jinapor said the Minority is looking for “full disclosure. Other than that, we are going to kick against that vehemently.”
“I am serving notice that those of us on the Minority side will oppose it vehemently if it is not transparent, if it is not made clear and if they go through this Franklin Templeton style of raising bonds.”
The government announced plans to issue the 15-year bond in April in 2017, to settle all outstanding debts in the energy sector.
The bond is also aimed at improving the financial strength of the State Owned Enterprises (SoEs) in the energy sector and make them competitive.
But since the announcement, Mr. Jinapor said no substantial information has been made available on this particular bond in addition to the fact the full energy debt stock is not known.
Not satisfied with approach
Beyond this, Mr. Jinapor said government’s approach to the energy debts “is not a very good approach”
He explained that “if you do a bond, it comes at a cost. For any money you borrow, there is an opportunity cost, there is a risk element, and the price of money you borrow is the interest.”
“What is the interest? How transparent is it? What are the flows from the Energy Sector Levy? Are they sustainable to pay on a year basis? If it is sustainable, why then must you go for that loan? They are simply going to borrow against the levies,” Mr. Jinapor noted as some questions he had on the matter.
Per his assessment, the government wants to borrow money to pay the debts so that the inflows will be used to service the loan.