News:
November 13, 2017
The failure of the recent 6 billion Energy sector Bond target issued by government on the international market is attributable to lack of investor confidence in the economy and its managers, the Minority NDC in Parliament has suggested.
According to the Minority, Improper packaging, uncertainty, as well as political composition of the Board of ESLA board and the NPP government’s flawed fundamental understanding of the bond hence its failure and has brought the name of the country into disrepute.
Addressing a press conference in Parliament house on Wednesday, November 8, 2017, Ranking Member on the Finance Committee, Casiel Ato Forson said Ghana has become a laughing stock as a result of the failure and called on the Minister for Finance to apologise to Ghanaians.
The Minority expressed worry about the complex structure of the bond and unrealistic assumptions made by the government resulting in the’ spectacular’ failure of the bond.
He also accused government of causing financial loss to the country since some 200 basis marks about 2 percent of the GHc 6 billion ( representing GHc1.2 million) which has been lost as a result of the bond issuance.
“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,” Ato Forson stated.
He expressed shock government could not achieve its Target despite the expensive road-show that cost the taxpayer millions of cedis.
He expressed shock government could not achieve its Target despite the expensive road-show that cost the taxpayer millions of cedis.
‘’After an extensive road show costing the taxpayer millions of Ghana cedis, the government delegation that was authorized by the President and his Cabinet to carry out the transaction failed to achieve the stated objective’’ he said.
The Minority has also accused the NPP led government of breaching the constitution for its failure to seek Parliamentary approval before going ahead with the bond issue and has threatened to haul the Finance Minister, Ken Ofori Atta before Parliament to respond to what went into making the decision without recourse to the House.
He said NDC had a superior strategy and a superior economic management team.
Government breached constitution without seeking Parliamentary before reaching out to the bond market.
The Minority also accused the NPP government of what it described as destroying the fundamentals left by the NDC government.
Deputy Minority leader, James Klutse Avedzi said the current government does not yield to advise hence the failure of the bond.
Government inOctober government conducted two road shows both locally and internationally in an anticipation of raising some 6 billion Ghana cedis under two separate bonds, seven year bond to raise 2.4 billion cedis and ten year bond to raise 3.6 billion cedis targets respectively.
The 7-year bond realised the targeted 2.4 billion cedis while the 10-year bond managed only 2.2 billion cedis.
Proceeds of the bond were expected to be used to clear the energy sector debts which stood at 2.5 billion dollars as at December, 2016.
By Christian /ghanamps.com