Minority asks for explanations for missing GHȼ10b Energy bonds targets

The Minority Caucus of the National Democratic Congress (NDC) in Parliament is requesting Finance Minister Ken Ofori-Atta to explain why the GHȼ10 billion energy bonds did not meet its target.    

Addressing a press conference at the Parliament House in Accra, Mr Cassiel Ato Forson, Ranking Member on Finance and Former Deputy Minister of Finance announced that the NDC Caucus would table a motion to summon the Finance Minister before the House over the under-subscription of the government’s financial instruments.”

The Minority Caucus said the Finance Minister had willfully breached the law and constitution of Ghana, stating that, gross “disrespect for the constitution and parliament will have no place in our current democratic dispensation.”

Mr Forson, said the issuance should have gone through parliament for approval, arguing that, the complex structure of the bond and the assumptions by the government caused “the failure” of the bond.

“The simple point is that, instead of them issuing a bond called plain vanilla, they decided to use this complex structure that has caused the taxpayer some 200 basis points,” Mr Forson said.

The 200 basis marks about 2 per cent of the GHȼ6 billion sought, amounting to about GHȼ1.2 million, which he noted, “can help the government to finance the Free SHS that they are struggling to settle”.

“The bond is unrated, per a prospectus issued in October, but an independent special purpose vehicle sponsored by Ghana had the bond hovering around a B-stable rating, according to Fitch, among other institutions.”

Mr Forson insisted that the Government could have saved the aforementioned 200 basis points.

The energy debt is estimated at GHȼ10 billion, but in all, government accrued some GHȼ 4.69 billion from the energy bond.

The seven-year component raked in GHȼ2.4 billion, at an interest rate of 19 per cent.

However, the 10-year bond failed to hit the GHȼ3.6 billion mark. It accrued some GHȼ 2.29 billion at an interest rate of 19.5 per cent, meaning that, the total amount received was about 22 per cent less than the targeted GHȼ6 billion.

The ESLA was forced to extend the auction by a week over low proceeds.

Source: GNA