…Scandalous$2.25Billion Bond Is Fastest By Any Regime

…Issued In First 100 Days Of Akufo-Addo Regime

As Finance Minister Ken Ofori-Atta’s sale of the gargantuan $2.25billion domestic bond to his friend’s company under a shroud of secrecy proves to be a terrible mistake, the fallout lesson that you cannot really hide an elephant plays out nicely.

However, the historicity of the notorious Franklin Templeton dirty deal goes beyond the fact that even international news agency, Reuters, has called the transaction, “a jumbo debt action;” or the fact that our Finance Minister himself had provided insider information to favor Franklin Templeton.

The bond issuance by Ken Ofori-Atta is the fastest in the history of any regime in Ghana, happening within the first 100 days of the Akufo-Addo regime, even as the first 100 days of every new regime has come to be accepted in our democratic practice as honeymoon period.

According to the Ministry of Finance itself, the public announcement of the issuance was done on the 30th of March, just 82 days after President Nana Addo Dankwa Akufo-Addo had been sworn into office on the 7th of January.

Even after more than 100 days in office, the regime is struggling to jostle into place, with crucial appointments such as Chief Executives for Metropolitan Municipal and District Assemblies (MMDCEs) yet to be completed.

After the first 100 days in office, the Akufo-Addo regime is also yet to name a Cabinet.

It is while the administration is still lacing its boots that the Finance Minister, who is also the President’s cousin, has managed to sell the $2.25billion bond to a company in which his business partner, Trevor G. Trefgarne, is Board Member.

For good measure, while Mr. Trefgarne is a member of the Board of Directors of Franklin Templeton, he is at the same time Chairman of the Board of Directors of the Enterprise Group, a firm partly owned by the Finance Minister.

With the emerging dirty files of the scandal, including hints that the Finance Minister had given insider information to Templeton, it is apparent that Ken Ofori-Atta who masterminded the bond sale also micro-managed the whole process to get his friend’s company to buy over 95% of the bonds.

Attorney General, Gloria Akuffo, who is supposed to have been consulted for legal opinion on the transaction, has said that she did not know about the Templeton transaction until it was in the news.

According to the Ministry of Finance itself, the public announcement of the issuance was done on the 30th of March, just 82 days after President Nana Addo Dankwa Akufo-Addo had been sworn into office on the 7th of January.

The erstwhile Mahama regime issued its first local bond, a $100million bond in the last year of its term in office in September, 2016.

The situation leaves the Finance Minister clearly in breach of Commission on Human Rights and Administrative Justice (CHRAJ)’s guidelines on conflict of interest.

The guidelines define conflict of interest as, “a situation where a public official’s personal interest conflicts with or is likely to conflict with the performance of the function of his/her office.”

Under the ‘Conflicting Financial Interest’ sub section, the general rule is that, “a public official shall not participate in an official capacity in any particular matter which to his knowledge: (i) he/she has a financial interest, and (ii) any person whose interest are imputed to him in any way has a financial interest if the particular matter will have a direct effect on that interest.”

Mr.  Ofori-Atta questionably sold 95% of the $2.25billion bonds to Franklin Templeton even though he knew very well that his business partner and friend, Trevor G. Trefgarne, was concurrently a member of the Board of FT and the Chairman of the Board of the Enterprise Group, a company partly owned by the Finance Minister.

While Ken Ofori-Atta’s feeble defense of the deal has led to the issuance of a statement by the Finance Ministry that has ended up raising more questions, Vice President Mahamudu Bawumia is about the only regime actor not attached to the Finance Ministry that has jumped to his defense.

The Vice President, in a recent commentary, insulted members of the Minority who have raised issues with the deal, by describing them as ignorant.

It is worth noting that Ken Ofori Atta is a personal bosom friend of the Vice President. In fact, it is through the recommendation of Ken Ofori-Atta that Akufo-Addo chose Dr. Bawumia as his Running Mate for the 2008 and 2012 elections, in which they were not successful, and the 2016 one in which they were elected.

According to the Minority in Parliament, the whole transaction with Templeton was so hurried that the bond was opened at 9:am on the 31st of March, but closed by 1pm, with the issuance summary sent by email at around 4:20pm.

The strange hurry over issuing the bond, which had been done at an exorbitant coupon rate of 19.75%, coupled with obscurantist moves that led to the situation where the media had to investigate out the name of Franklin Templeton as the majority buyer of the bonds, have conspired to put a fishy smell in the air.

The Minority has since demanded a Parliamentary Enquiry into the whole transaction, even as MP for Builsa South, Dr. Clement Abas Apaak, has indicated intent to sue for answers.

Interestingly, the $2.25billion bond issuance is part of $3billion that the New Patriotic Party government has borrowed in a record time of just three months.

This same NPP had lambasted the previous National Democratic Congress government, led by President John Mahama, for what they said was over borrowing. The NDC had issued $3billion worth of bonds in three years.

Hon. Isaac Adongo, Member of Parliament for Bolga Central, has also pointed out the fact that while the erstwhile NDC had amortized (instituted clear plans to pay off the debts they incurred), the NPP is borrowing hugely but only refinancing.

Refinancing simply means that, rather than the government putting in place measures to pay off the debts, it borrows new money to pay off old debt. The $2.25billion scandal-prone bond issued by Ken Ofori- Atta is for refinancing.

Even so, Hon Adongo points out the fact that the Akufo-Addo regime is not being wholly truthful about the application of the monies borrowed as he says, rather than using all the borrowed money to pay off debts, the regime uses part of the money to finance budget expenditure.

“If all the money they are borrowing were indeed for debt refinancing, all of it would have gone into a sinking fund (an account specially dedicated to paying off debt). But I can assure you that part of the money being borrowed is going into a Reserve Fund (a savings account created by government for use to hold money that will be available to withdraw on a constant basis.”

The $2.25 billion bonds were issued in a breakdown that has repayment time period of up to 15 years. In Ghana, political administration lifespan is four years at a time.

Hon Isaac Adongo warns that the NPP’s big-do style of borrowing with long maturity dates and refinancing as fulcrum of its debt management plan means that the government is piling up debt that it will most likely not be in power to pay when time is due to repay.

What this means is that the ruling party is creating the mess for someone else to come and clean up later.



Source: /Fiifi Samuels

The Republic News Online

Leave a Reply

Your email address will not be published. Required fields are marked *