Bawumia: Its sad Minority is exhibiting ignorance about $2.25 billion bond

BY: Enoch Darfah Frimpong

The Vice President, Alhaji Dr Mahamudu Bawumia has expressed worry about the Minority in Parliament’s criticism of the recent 15-year cedi bond sale, describing it as a show of mischief and ignorance.

To him, the Minority was showing “ignorance” and do not “understand” the processes of managing the economy and therefore suggested to them that, they should do some reading to educate themselves.

The Minority at a press conference on Tuesday criticized government over how it went about raising the $2.25 billion bond from US-based investor, Franklin Templeton and said the transaction was shrouded in "secrecy", just to "favour" one investor and did not have Parliamentary approval.

According to the Minority, Mr Trevor G. Trefgarne, a director at Franklin Templeton, the institution that bought 95 per cent of the bond, is also a Director at Enterprise Group Limited, a company of which Ghana’s Finance Minister, Mr Ken Ofori-Atta is co-founder, thus, raising issues of transparency, conflict of interest, and suspicion.

Former Deputy Finance Minister Cassiel Ato Forson who is also Member of Parliament for Ajumako Enyam Essiam, said the involvement of the US-based firm changed the dynamics of the bond from being a domestic one to an international one that needed parliamentary scrutiny and approval.

Related: Finance Ministry responds to Minority’s allegations over $2.25bn bond

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But speaking to journalists Thursday night in Washington DC, where the Vice President was attending the World Bank’s Spring meeting, Dr Bawumia said it was unfortunate for such comments to be coming from people who should know better.

“It shows a lack of understanding, the Minority have never understood this economy. It is amazing that people on that side who were actually in charge of managing the economy will be making such statements, it shows ignorance and I am so sad when I hear that from people who should know better,” the Vice President who had just finished a meeting with investors said.

“And so they need to understand, maybe they should read a little, that they need to understand what took place, we issued a cedi bond and there is no secrecy to the matter, it was very well invested in, the holders have invested many times in Ghana, the bonds that were in place when Seth Terkper issued them, they [same investors] bought them, 24 per cent interest rate, this time its 19 per cent, so we are doing even much better.” 

“This is what politics has been reduced to, trying to say things that really have no basis. It’s basically wrapped in ignorance and I’m a bit sad for Ghana, and for them because they are really demonstrating a lot of ignorance of the process of management of this economy and I think that is where we are.”

Dr Bawumia added that the issuance of the 15-year bond was part of government’s plans to use long dated papers to reduce the public debt.

“The strategy of re-profiling is just replacing shorter term debt with longer term debt, and more expensive debt with less expensive debt, and this is what we started doing a couple of weeks ago, and it is proving very successful and we hope to continue doing that. Ultimately, to be able to bring down your debt burden, there are two things you need to do, you need to grow your economy, when you grow your economy it expands, your revenues grow, GDP grows, your debt to GDP ratio also falls so the burden of the debt will also fall.”

Dr Bawumia is in the US with the Senior Minister, Mr Yaw Osafo Maafo, the Finance Minister, Mr Ken Ofori Atta, Business Development Minister, Mr Ibrahim Mohammed Awal and Mr Yoofi Grant, Chief Executive of the Ghana Investment Promotion Centre (GIPC). They would be interacting with investors at the meeting.

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