ON THE US$2.25 BILLION
BOND “CONTROVERSY”, DR. BAWUMIA WAS ABSOLUTELY RIGHT WHEN HE ASSERTED THAT THE
MINORITY (NDC) MPS ARE EITHER IGNORANT OR MISCHIEVOUS
Iddi Muhayu-Deen writes…
If you keenly followed the raging controversy on the recently
issued 15-year bond by the government of Ghana, you can only make one of two deductions
regarding the conduct of the Minority in Parliament, who are the originators of
this otiose controversy. You would come to the realization that these NDC MPS
(Minority) are either IGNORANT or MISCHIEVOUS on the matter. And by that,
His Excellency Alhaji Dr. Mahamudu Bawumia was completely spot on when he
described their conduct with either of the two words. You just can’t understand
them and the game of absurdity they are playing in the circumstances.
Honestly, I am increasingly getting worried and saddened at
the fast rate at which they are losing credibility and reducing an otherwise
serious enterprise of politics to one of petty gimmickry and child’s play.
Ordinarily, we ought to treat the issues they are raising, or should I say non-issues, with all the contempt that
they deserve. But I am minded of the fact that not all of us are privy to the
relevant nitty-gritty as far as the ‘bond issue’ is concerned. It is in the
light of this that I am indulging them in order to expose the incompetence of
their argument and tell the true story to the Ghanaian people.
The Minority argue that, the whole deal (issuance of the 15-year
bond) was shrouded in secrecy and
smacks of conflict of interest. They
also contend that the transaction ought to have received parliamentary approval pursuant to Article 181(5) of the Constitution
because it is an international transaction. That is the case of the Minority
and the NDC for that matter against the deal in issue. Let’s now deal with each
of their 3 concerns one after the other.
Was the deal shrouded
in secrecy?
Before answering this question, we must all appreciate the
fact that our laws spell out procedures for issuing government bonds, whether domestic
or otherwise. So, until these procedures are breached, it will be out of place
for anyone to suggest that the deal was done in error and surreptitiously choreographed
to give undue advantage to one particular investor by name, Franklin Templeton (FT). The facts of
this particular deal clearly point to one direction, which is that, it was done
in accordance with due process and in conformity with the established
procedures.
The Ministry of Finance was not the body that issued the bond
directly. It was issued as per the debt issuance calendar by the Book Runners
(comprising Barclays, Stanbic and SAS finance group) on behalf of the government.
In fact, these same Book Runners have since 2005, been in charge of issuing government’s
domestic bonds after they were contracted by the Bank of Ghana for this purpose.
In pursuance to the established procedures, the Book Runners did announce the
issuance of the 15-year bond to the market on 30th March, via electronic
mail and same was published on the Bank of Ghana website and that of the
Finance Ministry.
Over 25 investors including Franklin Templeton (FT)
participated in this bond issue. It was not the first time FT participated in a
bid to buy government of Ghana domestic bond. This same FT has been buying
government of Ghana bonds since 2015 when NDC was in power at very expensive interest
rates. For instance, on 30th November, 2015 and 27th
June, 2016, they bought a 5-year bond at a coupon rate of 24% in each case. But
today, under NPP, we are talking about a 15-year bond at a coupon rate of only
19%, which is the cheapest and best deal we have gotten from our domestic bond
issue. This is what the NDC cannot understand.
Was there any conflict
of interest situation?
The Minority hasn’t been able to provide any shred of
evidence to back their allegation of conflict of interest against the Finance
Minister. Yet, they are inviting us to interrogate this unsubstantiated claims
they are making. They only talk about the Finance Minister having a business relationship
with the Enterprise Group. But is the Enterprise Group the same as Franklin
Templeton (FT)? A big NO. Has the Enterprise Group bought any government bond? A
big NO. Does the Finance Minister have any share or interest in FT? A big NO. Was
the Finance Minister the person who sold the bond to FT? A big NO.
Was the Finance Minister in a position to compel all the
transaction Bank Runners as well as the Bank of Ghana to sell the bond to FT? A
big NO. Is this the first time FT is buying
government bond? A big NO. Has Franklin Templeton (FT) been buying government
bond from the NDC when they were in power? A big YES. So, the NDC is
essentially telling us that when Franklin Templeton (FT) buys government of
Ghana bond from an NDC government, it doesn’t amount to conflict of interest.
However, when Franklin Templeton (FT) buys bonds from an NPP government, then
that amounts to conflict of interest. Such kindergarten logic!
Clearly, they have
some great difficulty in appreciating what conflict of interest is. If I'm to
help them, I will tell them that conflict
of interest is when their general secretary, Johnson Asiedu Nketia, decides
to award himself a contract of supplying blocks to the Bui Power Authority at
the time he was serving as a Board Member of the Authority. I will also tell them
that conflict of interest is when Ibrahim Mahama wins almost every juicy
contract in the country on sole-sourced basis at the time his brother, H. E.
John Mahama was serving as President.
Was parliamentary approval a necessity?
The
Minority also claims that Article 181(5) of the Constitution was breached
because government did not seek parliamentary approval before issuing the 15-year
bond. Such incompetent argument! To start with, Article 181(5) doesn't come in
at all because the bond in issue is a DOMESTIC BOND to the extent that it is in
cedi denomination. It is therefore
NOT an international transaction, which would have required the invocation of
Article 181(5) and for that matter parliamentary approval. Indeed, when NDC was
in power, they issued not less than 23 cedi denominated (domestic) bonds and
NONE was brought to parliament for approval.
Nobody
raised any qualms because our laws permit that. So, why should it be different
this time round? Why is the NDC (Minority) requiring the NPP government to have
sought for parliamentary approval before issuing the famous 15-year domestic
bond? Has our Constitution changed? Is the NDC telling us that we are now being
governed by the Togolese or Ivorian Constitution because NPP is in power? These
people must get serious. Are they telling us that if an NDC government issues a
domestic bond, it doesn’t need parliamentary approval BUT if an NPP government issues
a domestic bond, it needs a parliamentary approval? Such absurdity!
Conclusion
It is pretty obvious from the foregoing that, the NDC
is increasingly becoming uncomfortable at the rate at which the Akufo-Addo
government is committed to fulfilling all of its ambitious campaign promises.
They thought the government could not find money to implement these gargantuan
promises because they left behind empty coffers. They were however taken by
surprise when the government came out with the idea of capping of statutory payments in order to provide the needed space
for the prioritization of government expenditure.
The
NDC thought they had over-borrowed and because of that, the NPP government was
going to be overwhelmed with the payment of maturing debts together with
accompanying interests, leaving the government with no fiscal space to
implement its campaign promises. They are therefore shocked that the NPP government
is being successful in its quest to replacing their (the NDC’s) suffocating short
term expensive bonds with a long term less expensive bonds as in the case of
the 15-year US$2.25 billion domestic bond which is going to provide the government
with the necessary fiscal mileage to operate smoothly.
They
were also shocked when the NPP government was able to successfully negotiate
with the nation's creditors especially the Britain Woods Institutions to
provide some "relief" to the government on the debt repayment
schedules and other conditionalities. I'm sure you've heard the Minority
Spokesperson on Finance and Economy, Hon. Ato Forson on joy fm, accusing the
IMF and the World Bank of discriminating against the erstwhile NDC government.
I will pardon you if you decide to have a good laugh at this moment. And
please, help me tell Hon. Ato Forson and his NDC that there is something we
call investor CONFIDENCE in the management and managers of a nation's economy.
If
they don't understand, they should take a cue from Dr. Bawumia's friendly
advice for them to read more. The NDC would continue to be in shock until they
decide to humble themselves and learn the rudiments of proper economics instead
of Woyomenomics. Until they do that, they would never understand why their
government (NDC), in four years, wasted
so much time and energy chasing some US$3 billion from China but to no avail,
whereas an NPP government, in less than
100 days, secures as much as US$2.25 billion from the issuance of a domestic
bond.
That
is the crux of the NDC’s problem, which of course, is born out of IGNORANCE or
MISCHIEF as observed by His Excellency Vice President Dr. Mahamudu Bawumia. Let
me end with a quote from the legendary and famous Abdul Malik Kweku Baako who
said on joy fm newsfile that, “The Minority’s ugly noise about the recent local
bond is driven by ignorance, mischief, misinformation and disinformation”.
These are responsible citizens talking NOT spectators.
Assalamu
alaikum
Iddi Muhayu-Deen
#ForGodAndCountry
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