MINORITY RAISES ISSUES ON ENERGY BOND
08-11-2017
MINORITY RAISES ISSUES ON ENERGY BOND
The Minority caucus in parliament on Wednesday 8th of November 2017, chastised the NPP government for not winning the confidence of the international community which resulted in the government’s inability to raise 2.4 billion Cedis bond but could raise only 1.5 billion Cedis, being 62%, even after the extension of the closing date of the bond.
This government could also only raise 760 million Cedis out of the projected 3.6 billion Cedis from the 10 year bond representing 21 percent of the expected amount. Even with the extension of the date for the 10 year bond, only 2.2 billion was raised out of the target for the 3.6 billion representing 61 percent patronage.
The NDC MPs has opined that the 2.4 billion Cedis projected by the government for the 7- year bond and 3.6 billion Cedis for the 10- year bond are not feasible since the interest would amount to a whopping 1.158 billion Cedis! This will surely not meet the debt servicing coverage requirement.
The minority caucus said it was therefore not surprising that investors decided not to partake in this “risky” transaction because no fund manager with a strong risk management would offer to purchase such a risky bond.
The caucus also wishes to know why there was no prior parliamentary approval. Government went into the international financial market to raise 6 billion Cedis with a possibility of additional 4 billion Cedis which would total 10 billion Cedis. The government by forming a public limited liability company using tax revenue approved by parliament without parliamentary approval, the caucus said, was in a clear contravention or breach of the Ghanaian Law Assigning the Energy Sector Levy Act.
The caucus is requesting the Finance Minister to appear before parliament to explain the circumstances that led to the wilful breach of the law and the constitution of Ghana.
The caucus also pointed out that singular failure of the bonds issuance in the present administration had brought Ghana’s image and integrity into dispute.
These moves came at the heels of the current demand for increase in the use of the energy in terms of country wide and the need to raise funds to cushion the energy sector but government was not able to get investors to buy the bonds for the expected period.
Thus only 760 million Cedis out of the projected 3.6 billion Cedis from the 10 year bond representing 21% of the expected amount. The caucus said the NDC had already put in place solid economic foundation on which NPP is building the economy.
