Terkper replies Bawumia: US$1b Eurobond proceeds “intact”

The proceeds from the recently floated US$1 billion Eurobond are “not missing”, Finance Minister Seth Terkper has said at a post-2015 Budget highlights Breakfast Forum organised by Price Waterhouse Coopers (PWC).

“There has been some misrepresentation,” Terkper said, adding: “Let me assure you that the bond money is not missing.”

He said even though Ghana’s financial system is a developing one, Ghana has come a long way for one billion dollars to get missing without a trace. “If ever it happened, we’ve come a very long way.”

According to him, “the 250 million for the Ghana infrastructure fund is in a New York account; it’s sitting there.”

“We have disbursed about 114 million out of the 200 million for capital projects including the re-financing, and another one for the refinancing of bonds that were maturing. We took some of them off. As we speak, therefore, we have about 800 million intact in a New York account and the reason we haven’t spent it all in a month is because the financial year is ending, and, therefore, there will be overflows into the next fiscal year after we have reimbursed the sources from which we took some bridge financing to pay for capital expenditure as a result of the delay,” he explained.

“So let me assure fellow countrymen: ‘Yes we will publish the list as we did with the 2013 bond for the public to know, just as we published the list of expenditure for the ABFA under the petroleum revenue management Act.’ So I hope that this gives some responses in a general context.”

Terkper’s explanation comes on the heels of a recent challenge thrown to the Government by Dr Mahamudu Bawumia, Running Mate to Nana Akufo-Addo, for a publication of all the projects that the proceeds were used for.

Addressing a group of UK-based Ghanaian professionals at a breakfast meeting in London a few weeks ago, the former Deputy Governor of the Bank of Ghana alleged: “We are reliably informed that the $1 billion raised from the sovereign bond has been used to reduce government’s indebtedness at the Central Bank and that the funds are not available anymore for the purpose for which it was raised.”

To him, the Eurobond proceeds were used to shore up the value of the local currency against the Dollar and other major currencies of international trade.

“This is sad and raises a whole lot of credibility issues. How can we borrow such a huge amount to fill a gap at the Bank of Ghana, the central bank? Is this the use to which non-concessional borrowing should be put? This is a very serious development and the Government and Bank of Ghana should urgently comment on this,” he challenged.

“In the prospectus that sought to convince investors,” Bawumia explained, “the Minister of Finance indicated that a substantial portion of the amount borrowed would be used for infrastructure development and critical projects. What projects did the Minister of Finance have in mind?” he questioned.