How the NPP squandered $750 Million Eurobond

… As Ex-President Kufuor’s lies exposed
…Paid bribes to S&P and Fitch ratings



Story by Alhaji Bature Iddrisu

When a Deputy Minister of Finance, Fifii Kwetey recently disclosed that the New Patriotic Party government under President John Agyekum Kufuor recklessly dissipated the $750 million it raised after it issued Ghana's first Eurobond in 2007, many were those who called him names, including the former president himself.
An enraged former president John Kufuor, reacting to the claims by the deputy minister on Adom Fm morning show hosted by versatile Adakabre Frimpong Manso last week Monday, referred to Fifii Kwetey as a serial lying ‘small boy’ who shouldn’t be taken serious.
According to Mr. Kufuor, the $750 million Eurobond secured on the 27th September 2007 at an interest rate of 8.5% over ten year period was well spent on the road sector, energy and infrastructural development.
The former president in the interview with Adakabre claimed, $90 million out of the $750 million bond was devoted to the improvement of the railway sector alone, throwing a challenge to the staff of the Railways Corporation to dispute that fact.
However, the shrewd and highly eloquent deputy minister, Fifii Kwetey maintained that the money was never utilized for any of these sectors, proving his point with the assertion that the erstwhile NPP government cannot point to any single landmark structure that had benefited from the Eurobonds.
The Al-Hajj’s independent investigation in the matter has confirmed the assertions by Mr. Fifii Kwetey that the $750 million Eurobond was not used for the intended purposes of acquiring the facility.
For example, whiles the NPP in its 2008 manifesto confirmed $90 million out of the $750 million Eurobond was secured as equity in a consortium composed of Government of Ghana, local users of rail services and foreign investors for the western rail line; not a dime was spent on that line.
Although a paltry 16% or $13.897, 000 of the Eurobond has been used in the railway sector, it was largely spent on the acquisition of diesel train engines and various items for the Eastern rail line (Accra-Tema Railway Project).
Demand for the $750 million bond underwritten by UBS Warburg and Citigroup was oversubscribed by emerging market hedge funds and by banks in Europe and in the US at a ten year interest of 8.5%...

However, Ghanaians are collectively liable to the repayment of debt by 2017 which by then will stand at almost $1.4., billion, which is the interest plus principal.

Volta River Authority (VRA), Electricity Corporation of Ghana (ECG), Ghana Highway Authority, Bui dam and miscellaneous categorized as ‘Others’; shared the bulk of the $750 million Eurobond.
It was also established during our investigations that parts of the Eurobond money was used to pay-off two of the world’s leading rating companies, Fitch and Standards and Poor for a supposed ‘consultancy’ services.
The NPP government on the 20th of November 2007 ordered the Minister of Finance to pay US$275,000 and US$150,000 out of the $750 million Eurobond to Messrs Standards and Poor and Fitch Ratings Ltd respectively, for a purported consultancy Services.
Ironically, these two internationally acclaimed rating organizations though not known to have anything to do with energy and infrastructure; were paid from VRA’s share of the Eurobond.
Further investigations by this paper revealed parts of the bond money was also used to finance payment of bank charges, payment of government salaries and purchase of prepaid and single phase meters.
Others include, purchase of shares in Anlogold Ashanti, purchase of crude oil for VRA and payment for the construction of fence wall for a thermal project.
The rest are exchange rate differentials, interest rate repayment and payment for equity shares in the West Africa Gas Pipeline.
We publish below a table of summary indicating the disbursement of the $750 million Eurobond secured by the NPP administration in September 2007 for your perusal.

Roads - 92, 273, 746. 35
VRA- 356, 952, 640. 40
Railways- 13, 897, 432. 03
Bui dam- 59, 376, 320. 20
ECG- 133, 753, 917. 91
Others- 82, 011, 650. 26
Exchange diff- 7, 192, 277. 05
-------------- ----------------- 2, 682, 772. 28
MOFEP 1, 859, 243. 52
747, 317, 277. 72