Ofori-Atta vetting: Agyapa, PDS, debt stock, other matters that will arise

The Minister of Finance-Designate, Ken Ofori-Atta is finally having his day before Parliament’s Appointments Committee having missed his initial vetting schedule on health grounds.

As part of the vetting of the Minister who held the same position two years ago, GhanaWeb recaps some issues that the Committee is likely to question Mr Ofori-Atta on.

Agyapa Deal:

The Agyapa Gold Royalties Management deal was introduced in parliament in the later parts of Nana Addo Dankwa Akufo-Addo’s first term.

A report from the Special Prosecutor’s Office highlighted among other things issues of nepotism, conflict of interest, irregularities, and other breaches of the law by the executive in structuring the proposed deal.

Under the Agyapa deal, Ghana was set to collateralize almost 76 per cent of the royalties generated from 16 large gold mines to Agyapa Royalties Limited – a special purpose vehicle company registered in the British Crown dependency of Jersey.

Also, forty-nine per cent of Agyapa Royalties shares were to be listed on the London Stock Exchange. The Special Prosecutor found that the sale of royalties to a company based in a known tax haven and a secrecy jurisdiction carried risks of money laundering and generating illicit financial flows.

Databank which the Finance Minister is a majority shareholder in, was a financial advisor in the deal and that raised the question of conflict of interest especially from the minority group in parliament and the main opposition National Democratic Congress.

Despite government suspending the deal, President Nana Addo-Dankwa Akufo-Addo in his recent State Of the Nation Address stated that government intended to resubmit the deal to the house.

Failed PDS Deal

The government of Ghana in 2019 signed a concession deal in which the operation and maintenance of the assets and facilities of the Electricity Company of Ghana (ECG) was awarded to Power Distribution Services (PDS).

The agreement was however terminated about 7 months after the concession had come into force on grounds of alleged material breaches in the provision of the demand guarantees by PDS, which were key prerequisites for the turnover of the assets and facilities.

The Appointment Committee will today have the opportunity to seek further clarification from the renominated Finance Minister on the collapsed PDS agreement.

Banking Sector Crisis:

The Bank of Ghana, BoG, between 2017 and 2018 embarked on a sector cleanup that resulted in the revocation of the operating licenses of several banks and micro finance operators in the country.

President Nana Addo Dankwa Akufo-Addo in his last State Of the Nation Address again stated that government had spent as much as GHc21 billion on the cleanup, recapitalization and other regulatory reforms which took place between mid-2017 and December 2018.

Despite the government touting the sector cleanup as one of its biggest achievements, the minority and the opposition have questioned the amount government invested and the effects, including the loss of jobs as well as the struggle some customers have suffered in trying to access their funds.

The Minister designate will likely be extensively questioned about the banking sector cleanup at his vetting today.

COVID-19 expenditure

The government announced that it spent about Ghc19 billion on COVID-19 related expenditures but some media reports have disputed the claim.

According to a report by Joy News, documents and available records show that government actually spent just Ghc1.7 billion on COVID-19 expenditures.

The Ministry of Finance in a press statement on Friday, March 19, 2021, indicated that the Ghc1.7 billion figure covered only two components on the COVID-19 expenditure.

The Appointment Committee will most likely seek more clarification from the Minister designate on the amount spent by the Government of Ghana in fighting COVID-19 during his vetting today.

National Debt Stock

The Minority Leader, Haruna Iddrisu after the President delivered the 2021 State of the Nation Address earlier this month, lamented the President’s failure to mention the nation’s debt stock during his presentation.

According to the Bank of Ghana’s data, Ghana’s debt stock stands around Ghc286.9 billion and this makes it the highest in nearly four years, largely as a result of government’s efforts to mitigate the impact of COVID-19 on citizens and the economy.

Frontiers Airport COVID-19 Testing Contract

The government of Ghana as part of measures to curb the importation of COVID-19 cases announced a mandatory testing for passengers arriving at the Kotoka International Airport.

The testing fee which was initially pegged at $150 per passenger was awarded to Frontiers Health Services.

Questions for clarity on the contract seems not to have received any proper answers as ministerial nominees who have earlier faced the Appointment Committee have either provided no answers or little when asked about the contract.

The Finance Minister designate just like other nominees whose portfolio had anything to do with the contract is expected to be queried by the committee on details of the contract.