Iddi Muhayu-Deen writes…
If you keenly followed the raging controversy on the recently issued 15-year bond by the government of Ghana, you can only make one of two deductions regarding the conduct of the Minority in Parliament, who are the originators of this otiose controversy. You would come to the realization that these NDC MPs (Minority) are either IGNORANT or MISCHIEVOUS on the matter. And by that, His Excellency Alhaji Dr. Mahamudu Bawumia was completely spot on when he described their conduct with either of the two words. You just can’t understand them and the game of absurdity they are playing in the circumstances.
Honestly, I am increasingly getting worried and saddened at the fast rate at which they are losing credibility and reducing an otherwise serious enterprise of politics to one of petty gimmickry and child’s play.
The Minority argue that, the whole deal (issuance of the 15-year bond) was shrouded in secrecy and smacks of conflict of interest. They also contend that the transaction ought to have received parliamentary approval pursuant to Article 181(5) of the Constitution because it is an international transaction. That is the case of the Minority and the NDC for that matter against the deal in issue. Let’s now deal with each of their 3 concerns one after the other.
Was the deal shrouded in secrecy?
Before answering this question, we must all appreciate the fact that our laws spell out procedures for issuing government bonds, whether domestic or otherwise. So, until these procedures are breached, it will be out of place for anyone to suggest that the deal was done in error and surreptitiously choreographed to give undue advantage to one particular investor by name, Franklin Templeton (FT). The facts of this particular deal clearly point to one direction, which is that, it was done in accordance with due process and in conformity with the established procedures.
The Ministry of Finance was not the body that issued the bond directly. It was issued as per the debt issuance calendar by the Book Runners (comprising Barclays, Stanbic and SAS finance group) on behalf of the government. In fact, these same Book Runners have since 2005, been in charge of issuing government’s domestic bonds after they were contracted by the Bank of Ghana for this purpose. In pursuance to the established procedures, the Book Runners did announce the issuance of the 15-year bond to the market on 30th March, via electronic mail and same was published on the Bank of Ghana website and that of the Finance Ministry.
Over 25 investors including Franklin Templeton (FT) participated in this bond issue. It was not the first time FT participated in a bid to buy government of Ghana domestic bond. This same FT has been buying government of Ghana bonds since 2015 when NDC was in power at very expensive interest rates. For instance, on 30th November, 2015 and 27th June, 2016, they bought a 5-year bond at a coupon rate of 24% in each case. But today, under NPP, we are talking about a 15-year bond at a coupon rate of only 19%, which is the cheapest and best deal we have gotten from our domestic bond issue. This is what the NDC cannot understand.
Was there any conflict of interest situation?
The Minority hasn’t been able to provide any shred of evidence to back their allegation of conflict of interest against the Finance Minister. Yet, they are inviting us to interrogate this unsubstantiated claims they are making. They only talk about the Finance Minister having a business relationship with the Enterprise Group. But is the Enterprise Group the same as Franklin Templeton (FT)? A big NO. Has the Enterprise Group bought any government bond? A big NO. Does the Finance Minister have any share or interest in FT? A big NO. Was the Finance Minister the person who sold the bond to FT? A big NO.
Was the Finance Minister in a position to compel all the transaction Bank Runners as well as the Bank of Ghana to sell the bond to FT? A big NO. Is this the first time FT is buying government bond? A big NO. Has Franklin Templeton (FT) been buying government bond from the NDC when they were in power? A big YES. So, the NDC is essentially telling us that when Franklin Templeton (FT) buys government of Ghana bond from an NDC government, it doesn’t amount to conflict of interest. However, when Franklin Templeton (FT) buys bonds from an NPP government, then that amounts to conflict of interest. Such kindergarten logic!
Clearly, they have some great difficulty in appreciating what conflict of interest is. If I’m to help them, I will tell them that conflict of interest is when their general secretary, Johnson Asiedu Nketia, decides to award himself a contract of supplying blocks to the Bui Power Authority at the time he was serving as a Board Member of the Authority. I will also tell them that conflict of interest is when Ibrahim Mahama wins almost every juicy contract in the country on sole-sourced basis at the time his brother, H. E. John Mahama was serving as President.
Was parliamentary approval a necessity?
The Minority also claims that Article 181(5) of the Constitution was breached because government did not seek parliamentary approval before issuing the 15-year bond. Such incompetent argument! To start with, Article 181(5) doesn’t come in at all because the bond in issue is a DOMESTIC BOND to the extent that it is in cedi denomination. It is therefore NOT an international transaction, which would have required the invocation of Article 181(5) and for that matter parliamentary approval. Indeed, when NDC was in power, they issued not less than 23 cedi denominated (domestic) bonds and NONE was brought to parliament for approval.
Nobody raised any qualms because our laws permit that. So, why should it be different this time round? Why is the NDC (Minority) requiring the NPP government to have sought for parliamentary approval before issuing the famous 15-year domestic bond? Has our Constitution changed? Is the NDC telling us that we are now being governed by the Togolese or Ivorian Constitution because NPP is in power? These people must get serious. Are they telling us that if an NDC government issues a domestic bond, it doesn’t need parliamentary approval BUT if an NPP government issues a domestic bond, it needs a parliamentary approval? Such absurdity!
It is pretty obvious from the foregoing that, the NDC is increasingly becoming uncomfortable at the rate at which the Akufo-Addo government is committed to fulfilling all of its ambitious campaign promises. They thought the government could not find money to implement these gargantuan promises because they left behind empty coffers. They were however taken by surprise when the government came out with the idea of capping of statutory payments in order to provide the needed space for the prioritization of government expenditure.
The NDC thought they had over-borrowed and because of that, the NPP government was going to be overwhelmed with the payment of maturing debts together with accompanying interests, leaving the government with no fiscal space to implement its campaign promises. They are therefore shocked that the NPP government is being successful in its quest to replacing their (the NDC’s) suffocating short term expensive bonds with a long term less expensive bonds as in the case of the 15-year US$2.25 billion domestic bond which is going to provide the government with the necessary fiscal mileage to operate smoothly.
They were also shocked when the NPP government was able to successfully negotiate with the nation’s creditors especially the Britain Woods Institutions to provide some “relief” to the government on the debt repayment schedules and other conditionalities. I’m sure you’ve heard the Minority Spokesperson on Finance and Economy, Hon. Ato Forson on joy fm, accusing the IMF and the World Bank of discriminating against the erstwhile NDC government. I will pardon you if you decide to have a good laugh at this moment. And please, help me tell Hon. Ato Forson and his NDC that there is something we call investor CONFIDENCE in the management and managers of a nation’s economy.
If they don’t understand, they should take a cue from Dr. Bawumia’s friendly advice for them to read more. The NDC would continue to be in shock until they decide to humble themselves and learn the rudiments of proper economics instead of Woyomenomics. Until they do that, they would never understand why their government (NDC), in four years, wasted so much time and energy chasing some US$3 billion from China but to no avail, whereas an NPP government, in less than 100 days, secures as much as US$2.25 billion from the issuance of a domestic bond.
That is the crux of the NDC’s problem, which of course, is born out of IGNORANCE or MISCHIEF as observed by His Excellency Vice President Dr. Mahamudu Bawumia. Let me end with a quote from the legendary and famous Abdul Malik Kweku Baako who said on joy fm newsfile that, “The Minority’s ugly noise about the recent local bond is driven by ignorance, mischief, misinformation and disinformation”. These are RESPONSIBLE CITIZENS talking NOT spectators.