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THIS IS HOW NPP APPLIED THE $750M EUROBOND

Author:
Mr Bean
Date:
2011-07-17 19:57:46


IF GHANA WERE A BUSINESS ENTITY NPP WHO BANKRUPTED OUR NATION WOULD BE BANNED FROM HOLDING DIRECTORSHIP IN ANY COMPANY FOR 5 YEARS

"Today, in spite of the fact that Ghanaians are paying a whopping $38.8 million every six month as interest on the money and will continue to do so until 2017 when the principal ( $750 million) will also have to be paid, there is not even a metre stretch of road or railway that those who managed the Eurobond can point to as having been what Ghana benefited from the Eurobonds.."

On September 27th 2007, the Republic of Ghana issued its debut US$750million

10-year bond. A summary of the issue details is presented below: Issuer:

The Republic Of Ghana

Ratings: B+ stable (S&P), B+ positive (Fitch)

Format: Reg S/144A

Amount: US$750million

Coupon: 8.50%

Issue Price: 100%

Pricing: Mid-swaps + 325 bps

Maturity: October 4, 2017

Settlement: October 4, 2007

Benchmark reference: UST 4.75% Aug. 2017

Spread to benchmark: 387 bps

Listing: London Stock Exchange

Joint Bookrunners: CITI, UBS

Co-Managers: EDC Bank, Databank, New World (Ghana)

Planned Utilization of Sovereign Bond Proceeds

The planned utilization of the sovereign bond was as follows:

Sector Planned Allocation (US$ millions)

Energy 456.8

Roads 198.6

Railways 89.4

Issue Costs 5.2

Total 750.0

Actual Utilization of Sovereign Bond Proceeds

As at 3 August 2009, a total amount of US$746.6 million had been disbursed.

A summary of the disbursements is as follows:

Description Amount (US$ millions)

Energy 508.28

Roads 92.27

Railways 13.90

Others* 126.95

Bank 5.20

Total 746.60

*Disbursement Unrelated To Energy, Roads And Railways

Itemized below are the disbursements classified as “others”:

Interest on 1st Coupon to Citi Bank 14,000,000.00

Purchase of 2225426 right issues shares of Anglogold 55,585,895.43

VRA Crude Purchase 41,784,261.78

Transfer to TCMA Account 2,452,129.72

MOFEP Establishment of International Financial Services Centre 432,301.00

Transaction Advisory Fees IFO NTHC/Databank for sale of Westel 982,000.00

Ghana Telecom Bond Solicitation by Standard Bank 1,685,209.67

Borrowing to support November 2007 Salaries 6,836,438.22

SAS Transaction Fees for Golden Jubilee Savings Bond 174,033.85

Exchange Rate Difference 3,017,730.33

Total 126,950,000.00

From a comparison of planned versus actual allocations the following

observations can be made:

• Energy allocation was overspent

• Very little of the railway allocation was used

Planned

Item Allocation Allocation Variance

Energy 456.81 508.28 (51.47)

Roads 198.61 92.27 106.34

Railways 89.38 13.90 75.48

Issue Costs 5.20 5.20 -

Others 126.95 (126.95)

750.00 746.60 3.40

The current Eurobond balance is US$3.4 million.

Colleagues are kindly requested to take note of the above.

Dr. Kwabena Duffuor

Minister of Finance and Economic Planning

Dated: 4 August 2009

From the text of the Finance Minister’s presentation, it is clear that the NPP government’s Economic Team squandered the $750 million.

.Daily Guide

[This is an authentic posting from Mr Bean (Registered User)]
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