Deputy Ranking Member of the Finance Committee of Parliament, Isaac Adongo, has criticized government for sacrificing $10billion bondholders’ money for $3billion IMF bailout.
This comment comes after the finance minister in a press statement announced that the government has secured more than the needed 80% participation in the (DDEP) as part of key steps to reach board-level approval with the International Monetary Fund (IMF) on a $3 billion facility to restore macroeconomic stability in the country.
Government targeted 80% participation in the program to help restructure 137.3 billion Ghana cedis in bonds on the domestic market to bring its total debt, which stands at about 575.5 billion Ghana cedis to sustainable levels which was a criterion the country must meet to secure a possible $3 billion bailout.
The government expressed gratitude to the people of Ghana for their support throughout these very difficult times and said it will consider inputs made by all stakeholders during the DDEP engagements to further streamline government’s expenditures.
The finance ministry maintained that the exercise was voluntary and thus the right of the individual to self-exempt was never in doubt.
Speaking in an interview on Morning Starr on Starr FM with Francis Abban the deputy ranking member said,” The government is saying, forgo your money so that we can achieve compliance with the internal arrangement of the IMF. So we can get a program that gives us $3 billion and yet the people’s money that you want to use to sacrifice is over $10billion. So, you want to destroy $10billion in order to go and collect $ 3 billion dollars over three years not even one year. These are people’s monies, these are not the government of Ghana money, these are pensioners’ money and these are monies they gave to you on the trust of the sovereign. Now the government says we want to take your money, we won’t give you the money because the economy is in trouble”.
He continued; “So the government says in the budget I have 52 billion of interest payment. 31billion of that is attributable to Ghanaians that I need to pay them in 2023. I am not going to pay you that money I will pay you zero. I have extended 21billion that I have to pay to external creditors. I write a letter to them suspending payment I’m not going to pay. The same external creditors, I owe then 22billion that I have to pay this year, I am not going to pay. So, in all, to achieve debt sustainability and be able to qualify for the IMF program, in 2023 alone, 74billion of debt service I am not paying. How can you do this and celebrate as success”.
Ghana hopes to reduce its debt to 55% of Gross Domestic Product by 2028 with the debt operation which involves both domestic and external creditors. The completion of the DDEP puts next engagements with external creditors on a possible debt restructuring.
Finance Minister Ken Ofori-Atta on Monday announced domestic bondholders with the exception of Treasury bill holders will be affected by the debt exchange program.
Per the arrangement, bondholders will get 0% interest in 2023, 5% in 2024 and 10% onwards. The bonds will also be redeemed in 3 installments within 10 years.
According to documents in possession of Starr News the Attorney General advised against any unilateral variation of Collective Agreement Clauses (CAC). The AG in his legal advice to the finance minister asked for domestic bondholders to be engaged before any such move.
According to the AG, the debt exchange program can at best be voluntary given the legal ramifications.
“In the absence of an agreement with parties, it would be unlawful for the government to unilaterally introduce CACs into bond agreements and may constitute an event of default under clause 12 of terms and conditions of the bond issued under the programme” Mr. Dame stated in his advice
“Voluntary engagement with parties to bond agreements would be able to produce the outcome of a voluntary modification and inclusion of CACs on bondholders” he added
“Ken Ofori-Atta ignored the express legal opinion of the AG to illegally and unilaterally shred binding terms of the bond agreements in the debt exchange program. Affected bondholders must proceed to court” Mr. Adongo wrote on social media.
The Chamber of Corporate Trustees have already rejected the debt exchange program announced by the finance minister. In a statement the Pensions Chamber assured pensioners it has not agreed with government on the debt restructuring moves.
Find portions of the legal opinion of the AG on the debt exchange programme below:
The now-former Minister of State with responsibility for Finance should not be confirmed in 2021, according to a number of arguments made by Isaac Adongo, the member of parliament for Bolgatanga Central.
One of the three consulting firms for government borrowing, Black Star Brokerage, was owned by Adu Boahen, according to Adongo.
He mentioned that Adu Boahen’s Black Star Brokerage and Ken Ofori-Atta’s Databank would be sharing the profits from the government’s borrowing.
He said this was the reason the country’s debt levels had skyrocketed since 2017, due to reckless borrowing.
In a video during a press conference in February 2021, he said: “The Ministry of Finance headed by Messers Ken Ofori-Atta and Charles Adu Boahen just announced a list of primary dealers and introduced a new term called Bond Market Specialists. Interestingly, firms owned by these two personalities, Databank owned by Ken Ofori Atta, and Blackstar Brokerage Limited owned by Charles Adu Boahen have been selected as two of the three local investment advisory firms.”
He added: “the duo, Ken Ofori Atta and Charles Adu Boahen have thus literally awarded to themselves through their companies the lucrative contracts that involve managing Government’s borrowing program with an estimated Ghc60 billion a year gross financing. The fees to be shared by the transaction advisors of the Government borrowing program, including Ken Ofori Atta and Charles Adu Boahen’s companies, are estimated at Ghc210 million a year.”
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This press conference was during the vetting of Charles Adu Boahen as minister of state in February 2021. Hon Isaac Adongo made a strong case for him to be rejected by the Appointments committee of Parliament!
Please read the article and watch the video ????????
Hon Isaac Adongo unveils the “blood-sucking vampires” at the Ministry of Finance.
If you ever wondered why Ghana’s public debt has since 2017 been growing at an unexplained geometric sequence, the reasons are here:
Those in charge of the borrowing, stand to personally profit from the borrowing through the reward in fees to their companies who serve as their transportation advisors.
Whilst the corporate esteem of Ghana is on a nosedive and the future generations are being saddled with a debilitating debt, the worth of companies owned by persons at the forefront of the borrowing decisions keep soaring.
Appointment of Databank and Black Star Brokerage as Transaction Advisors to the Ministry of Finance is a deadly combination of Ken Ofori Atta and Charles Adu Boahen in Motion without shame.
The Ministry of Finance headed by Messers Ken Ofori-Atta and Charles Adu Boahen just announced a list of primary dealers and introduced a new term called Bond Market Specialists. Interestingly, firms owned by these two personalities, Databank owned by Ken Ofori Atta and Blackstar Brokerage Limited owned by Charles Adu Boahen have been selected as two of the three local investment advisory firms.
The duo, Ken Ofori Atta and Charles Adu Boahen have thus literally awarded to themselves through their companies the lucrative contracts that involve managing Government’s borrowing program with an estimated Ghc60 billion a year gross financing. The fees to be shared by the transaction advisors of Government borrowing program, including Ken Ofori Atta and Charles Adu Boahen’s companies is estimated at Ghc210 million a year.
This is a clear conflict of interest. The Minister for Finance has made the government borrowing his private business and benefit each time Government borrows through Databank either as a bookrunner or Co-Manager of Eurobond issuance.
Ken Ofori Atta’s Databank has now been joined by Charles Adu Boahen’s Blackstar Brokerage Limited to share the spoils. The combination of this deadly team is set to further engage in reckless borrowing as evidenced in the more than doubling of Ghana’s public debt from Ghc120 billion at the beginning of 2017 to about Ghc300 billion by the end of 2020. In addition to the about Ghc180 billion increase in Ghana’s public debt, about Ghc70 billion of the end of 2016 debt of Ghc120 billion was refinanced and in some instances reprofiled between 2017 and 2020.
This means that a total of about Ghc250 billion Government borrowing program was carried out in the last four years with Ken Ofori Atta’s Databank acting as his transaction advisors. The accrued fees shared by the transaction advisors, including Databank is estimated at 0.35% of the borrowing program of Government. That is about Ghc875 million fees paid by Ghana to these transaction advisors.
No wonder Ghana is bleeding from excessive reckless borrowing without any meaningful benefits to the suffering taxpayers.
This harrowing public debt program was fested on Ghanaians when only Ken Ofori Atta’s Databank was involved. I am scared for Ghana when I think of Charles Adu Boahen’s Blackstar Brokerage now joining the fray to share the spoils. How big will the Government’s borrowing program be to ensure that Databank maintains its fees income from the last four years and leave some spoils for Charles Adu Boahen’s Blackstar Brokerage to help itself with?
Since they came to power, there is no bond transaction for government that the Minister didn’t benefit personally from through Databank and now Charles Adu Boahen through Blackstar Brokerage.
Charles Adu Boahen who sat and is expected to sit on the Board of Bank of Ghana where Databank and Blackstar Brokerage will be operating from as transaction advisors. He also sat and is expected to sit on the Governing Board of the Securities and Exchange Commission that regulates Databank and Blackstar Brokerage Limited. The bonds and other Government debts to be issued through these companies are also expected to be approved by Charles Adu Boahen sitting on the SEC.
As a matter of fact, any complaints relating to these companies would be directed at SEC on whose Governing Board sits Charles Adu Boahen and controlled by a former Vice President of Databank, Rev Ogbamey Tetteh who masterminded policy rollout that has collapsed the securities sector of Ghana.
Where lies the independence of the dealers and advisers to government on borrowing. Are decisions about borrowing and interest cost being made in the interest of Ghana or private businessmen? Sheer and crude profiteering at the expense of Ghanaians. Always promoting their firms and personal interests.
How do we protect against insider trading when the very people taking decisions on interest rates and bond structuring are themselves direct beneficiaries of the outcome of their decisions through their companies?
Ghana has been bleeding and I fear it will bleed even more with Ken Ofori Atta and Charles Adu Boahen now hand-holding the interests of Databank and Blackstar Brokerage.
