The Government has described as untrue, allegations by Dr Mahamudu Bawumia, the 2016 Running Mate to Nana Akufo-Addo that the Mahama Administration has misapplied the proceeds of the oversubscribed US$1 billion Eurobond that was issued in September.
“That allegation is far from the truth,” Deputy Finance Minister Mona Quartey told STARR FM’s Kobby Gomez Mensah in an interview Monday November 24, 2014.
She said: “The proceeds from the Eurobond issue are being used for the intended purposes as listed in the prospectus, and that was: (1) To fund the investment infrastructure fund, and (2) To pay for infrastructure development that the government has prioritised. And that is what is going to happens…some of them have begun,” she insisted.
Addressing a group of UK-based Ghanaian professionals at a breakfast meeting in London Saturday, 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 have been used by the Government 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.
He said: “The Government announced to the world that it was seeking the support of an IMF-supported programme to help address the current imbalances in the economy. On the basis of this, it was able to calm the nerves of investors and issue a $1 billion sovereign bond.”
“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.
He, therefore, challenged the Minister, Seth Terkper to “list and provide a detailed plan of what projects he has in mind.”
Accepting that challenge, the Deputy finance Minister said Monday that: “…In the budget, we’ve named a whole lot of them, so I’m surprised that a statement like that is made…so that is just totally untrue.”
“The Kasoa bypass is one: that is about 37 percent complete now. The Kwame Nkrumah Interchange…that is about 62 percent complete. The polo grounds bypass, about 92 percent; Ayamfuri…raod, 36 percent of that has already been done. In the area of education, you know what we’ve done. It’s all listed in the budget. I don’t need to enumerate that.
“In the area of health, you know again what has been done. The extension to hospitals in Kumasi, the new Ghana medical school wards and all that. In the sector of energy and petroleum, you know what is going on again: the addition of power that is being brought into the Kpone thermal power plant. The expansion of TICO; the additional thermal sources that are going on.
“With respect to GRIDco, all the substation reliability enhancement projects, which have started and [are] going to be completed at various stages as we go forward.
“At the Ministry of Water Resources Works and Housing, again the Kpong water supply expansion, then a big one under energy is the Ghana Gas project as well which the minister listed, and many others that are listed in the budget. So it’s not as if it is hearsay; it’s all in the budget.”