EXPOSED: US$1billion Eurobond used to clear debt owed BoG

The Ministry of Finance led by Seth Terkper and his two deputies have been badly exposed on the raging controversy surrounding the whereabouts of the 1billion dollar Eurobond secured by the government in September, as it has turned out that the money has been used to settle part of the indebtedness of the Central Government to the Bank of Ghana, and is thus not available for capital expenditure or Counterpart funding, as the government had claimed it was using the money for.

The Bank of Ghana Monetary Survey for October 2014, which this paper intercepted and which basically outlines the accounts of the Bank of Ghana and other relevant information, is clear that the 1billion dollars, equivalent to over 3billion Ghana cedis, was used by the government and Bank to reduce government’s indebtedness which stood at a total of Ghc10,655.2 million at the end of August 2014.

Consequently, after the use of the Eurobond to settle part of the government’s indebtedness to the Bank of Ghana, the total indebtedness of the Central Government reduced to Ghc7,656.6 million, a reduction of Ghc2.998.6million whose dollar equivalent is the same as the 988 million, Ghana received from the sale of the Eurobonds after the payment of various fees and monies to the various advisors who worked on the Bond issuance.

A detailed look at the Bank of Ghana document indicates that by April 2014, Governments indebtedness to the Bank of Ghana stood at Ghc8,146.1million. This stock increased to Ghc8,816.7 million by May 2014 and Ghc8,657.1 million by June. The indebtedness to the

Bank further increased to Ghc9,594.4 million by July 2014 and to a whooping Ghc10,655.2 million by August 2014.

However, with the receipt of the Eurobond in September and its application into settling part of the Government’s indebtedness, the level of indebtedness reduced to Ghc7,656.6million at the end of September.

The controversy surrounding the September Eurobond arose when Vice-Presidential Candidate of the New Patriotic Party pointed out to the fact that the specific uses of the Eurobond were missing from the 2015 Budget and challenged the government to indicate where the Eurobond is and what is has been used for.

This challenge, elicited the usual vitriol from the quarters of government led chiefly by Seth Terkper, Minister of Finance and his two deputies, Mona Quartey and Ato Forson. Other government propagandists took to the ring and even described the former Bank of Ghana Deputy Governor as delusional.

In a subsequent reaction to the government’s position published by the Daily Guide and Scandal Newspapers, Dr. Bawumia indicated that the government had used the money to settle its indebtedness to the Bank of Ghana.

“The sovereign bond has been used to bring government within this limit. It is therefore not available for capital expenditure unless the law is violated. You cannot eat your cake and have it at the same time!”, he said.

The latest revelation also supports the Minority in Parliament, who on Tuesday held a Press Conference on the matter and challenged government to come clear on the Eurobond. The

Minority, which was led by Former Minister of State at the Finance Ministry, Anthony Akoto Osei, also disclosed that checks at the Bank of Ghana indicated that the Bank had used the money to defray part of government’s indebtedness to the Bank.