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General News of Tuesday, 1 April 2014

Source: myjoyonline.com

$300m loan agreement causes stir in Parliament

There is controversy in Parliament over a 300 million dollar loan facility government is seeking Parliamentary approval for.

This comes hours after the Finance Minister Seth Terkper announced the imposition of a moratorium on new loans.

The loan, if approved, will be used to finance Ghana’s peacekeeping operations abroad. The Minority is raising questions about the terms of the facility. Of particular interest is the 5 million dollars government has agreed to pay the facilitator of the loan.

Joy News' Parliamentary correspondent Elton John Brobbey has secured a national security due diligence report on the loan facility signed by the National Security Coordinator Col Rtd Larry Gbevlo Lartey on the loan facility. Brobbey stated that the loan is being facilitated by Russian Bank based in UK, VTD Capital PLC.

According to him, the arranger of the loan will earn five million dollars and the manager of the fund will also earn 6 million dollars.

The arranger and manager of the loan agreement is VTD Capital PLC, Brobbey confirmed.

The loan is to procure equipment to support Ghana's military in its peace operations.

Even though the loan, according to the agreement will be due by July, the exercise to which the loan will be applied begins on April 1 and the deadline for the deployment of Ghana's military contingent is today, Brobbey stated.

The minority has meanwhile stayed out of the process to approve the agreement. MP for Efutu Alexander Afenyo Markins told Joy News the minority in principle is not against government securing a loan for the military. All the MPs are asking is due diligence, he stated.

He found it intriguing that a company would agree to arrange a loan facility and earn an amount of five million dollars and go ahead to issue a disclaimer that it cannot be held liable if anything goes wrong.

According to Afenyo Markins, the due diligence conducted by the Bank of Ghana also has a disclaimer which says the Central Bank is not sure whether the bank regulators in the UK will accept this deal with VTD Capital.

Markins insists government must proceed cautiously on the matter. The Chairman of the Finance Committee of Parliament, James Avedzi told Joy News, the Attorney General, the chief legal advisor to the government has given the loan agreement a clean bill of health.

According to him, the Bank per the agreement will provide $150m and is arranging with other banks to raise the additional $150 million.

He said the committee has finished its work on the agreement and has submitted a report to the leadership of the House to take a final decision.

He said the "agreement is urgently needed" to provide equipment to the military who will be on a peacekeeping duties.

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