US$2.25 bn bond to cause an annual lose of US$330 million

The Minority in Parliament has accused the Finance Minister Ken Ofori Atta of causing financial loss to the state with the issue of the recent 2.25 billion dollar bond.

Per their calculations, the loss is up to the tune of 330 million dollars per year over the next fifteen years.

According to the Minority Spokesperson on Finance, Cassiel Ato Forson, the difference between the rate of the bond and that of the current treasury bill rate is the cause of the huge amount of money the country is allegedly losing through the deal.

These comments follow recent actions taken by the minority for disclosure on the terms of the bond including a petition to the United States Securities and Exchange Commission.

Addressing the media, Cassiel Ato Forson said: “It will surprise you to know that, the use of proceeds as the Minister of Finance made it known to the public was categorical. He said the proceeds will be used for the purposes of switching short-term domestic instruments. And when we say short-term domestic instruments, we are making reference to 98 days treasury bonds and 192 days treasury bonds. Currently, treasury bonds as at 17th of April, is traded at 16.35%, and 182 days treasury bonds is traded at 16.70%, but what surprises me is that, the Finance Minister decided to go for a long-term debt of 19.5 % to switch off a debt of 16.35%. In fact, his actions are woefully causing financial loss to the state. From the calculations, it is clear that Ghana will be better off if we had decided to roll over the existing treasury bonds which is being traded at 16.35%, instead of going for 19.75 percent. From the calculations, Ghana would have been better off with $330 million US dollars if he had not decided to go on this tangent.”

Early on, Parliament passed a half hour motion to compel the Minister of Finance to provide detailed information on the recent 2.25 billion dollar bond issued by Government. The Minister has seven days to respond to the motion.

The motion was filed by the Minority Leader, with a request for the full complement of documentation related to the issuance, the participants, the utilization of proceeds and the currency in which the bond was settled.

The Minority Leader, Haruna Iddrisu, moved the motion on the floor of Parliament.

citifmonline.com

Read Full Story