Minority questions Ghana’s debt stock
The Minority in Parliament has accused the government of not being forthright and truthful about the country's debt stock.
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It said the amount of money owed had been deliberately hidden by the government to make the country's books look good.
Addressing a press conference in Parliament yesterday, the Deputy Ranking Member of the Finance Committee of Parliament, Dr Mark Asibey-Yeboah, said, for example, that the government had failed to disclose to the House its failure to pay workers’ contributions amounting to GH¢914 million or 0.9 per cent of GDP in December last year.
He alleged that the government used the money to securitise a bond it issued.
"As a result of the behind-the-curtain securitisation of the arrears, the fiscal deficit of 2014 has been revised upward from 9.4 per cent to 10.3 per cent of GDP.
“This, then, means there has been double-digit fiscal deficit for back-to-back years which had never been seen in this country," he said.
He said the Minority only got to know about it through the International Monetary Fund’s (IMF’s) criteria performance on Ghana’s extended credit agreement and maintained that the issue should have been brought to Parliament for it to be discussed.
BoG dividend to government
Dr Asibey-Yeboah said a careful perusal of the IMF's review document also revealed that the Bank of Ghana (BoG) had paid dividend to the government amounting to 0.4 per cent of GDP.
Since that transfer was unanticipated, he said, it had led to a larger-than-programmed total revenue for 2015.
"The spending of this unanticipated inflow has not been approved by Parliament. Meanwhile, the government plans to use up to half of the supposed BoG dividend to cover the damage of the June 2015 flood disaster.
“Again, it plans to use the remainder to clear part of newly identified arrears with the bulk oil importers. Who authorised this spending? Which Parliament?" he asked.
Limit on concessional loans
Dr Asibey-Yeboah, who is the Member of Parliament for New Juaben South, noted that the IMF had agreed to raise the debt limit on non-cocessional loans for the rest of 2015 from $1 billion to $2.5 billion, ostensibly to allow the government space to issue a larger Eurobond and also borrow more externally "Of course, we know what happened with the Eurobond disaster. So the government is comfortable applying to the fund for our borrowing ceiling to be raised, but is unprepared to submit its dealings to the Parliament of Ghana," he said.
He said the three aforementioned issues were sufficient reasons the government had to present the whole Extended Credit Facility (ECF) programme with the IMF to Parliament for scrutiny and approval.
"To reiterate, the government needs parliamentary approval to spend the BoG dividend. For the avoidance of doubt, the non-recourse to Parliament to scrutinise its debt to SSNIT is unacceptable. Parliament must probe into the securitisation of government's debt to SSNIT," he said.
Eurobond
Turning the spotlight on the recent Eurobond issued by the government, Dr Asibey-Yeboah said when Ghana went to the Eurobond market in 2007, its macroeconomic fundamentals were strong, its rating was very good and the debt was sustainable.
Currently, he said, Ghana's sovereign guarantee was of no value, the rating had deteriorated to junk status and the country's debt unsustainable.
The 10.75 per cent yield on the bond, he said, was the highest ever paid by an African country.
"How can a country such as Poland get a yield of 0.94 per cent on the same day that Ghana issued? Angola, last week, postponed plans for a $1.5 billion bond to await better market conditions. Even Zambia, with all its problems, got a yield of 3.37 per cent,” he explained.
He said the government was so desperate and needed so much money that it was prepared to pay any yield to sell the bond.
"Why did we reduce the size of the offering by GHc500 million? Is it because of our worsening credit fundamentals?" he asked.
