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Maritime dispute: 2007 $750m bond was at stake – Terkper

Minister of Finance, Seth Terkper
Seth Terkper

In the background of the issuance of the 2015 and 2016 bonds, Ghana’s financing of the $750 million 2007 bond, was at stake because of the maritime dispute with Côte d’Ivoire at the International Tribunal of the Law of the Sea.

A former Finance Minister, Seth Terkper, revealed on the Citi Breakfast Show that the litigation at ITLOS was a point of interest in the issuing of these bonds, to the extent that confidential information had to be divulged.

Although the full extent of the financial victory could not be quantified, he said the 2015 and 2016 sovereign bond, were enveloped by the litigation posing some significant risk to the financing of the 2007 bond, which is due in October 2017.

These risks came in the form of possible reservations from investors.

“…In essence, if there is one single quantification of the risk, one would say; had the earlier reservations by investors and others materialized, then we can see what could have happened. Even during those earlier times, if investors had enough significant reservations as to not make those bonds possible, then you can imagine,” Mr. Terkper explained.

He lauded the work of the technical team working on the case, for doing enough “to show that we were confident that Ghana would prevail” and “to some extent, investors, well most of them, believed, and we were able to do this bond.”

The ITLOS Chamber, in a unanimous decision on Saturday, held that there had been no violation on the part of Ghana on Côte d’Ivoire’s maritime boundary.

In 2007, Ghana discovered oil and gas in commercial quantities, and this was followed by Cote d’Ivoire staking its claim to portions of the West Cape Three Points.

A moratorium placed during the litigation halted new projects prevented Tullow Oil from drilling additional 13 wells. Tullow thus drilled eleven [11] wells in Ghana’s first oil field.

Mr. Terkper noted that, the litigation also “affected the years and the rates” of the bond and was a prime example of “a factor which is beyond your control.”

Due to the amount at stake, Ghana even had to disclose all information demanded in relation to the litigation, “however, confidential.”

“Usually, before we give what is called a final decision to proceed, a series of questions are asked of the Minister of Finance and one of them, in 2015 and 2016, was whether the Minister of Finance had any information to suggest if Ghana could not win the case… we were dealing with the financial market so we could not hold it back.”

For Mr. Terkper, all this was an indicator of the significance of the ITLOS judgment in Ghana’s favour “in terms of stability with financing the budget, in terms of the pricing for the bond and other decisions.”

By: Delali Adogla-Bessa/citifmonline.com/Ghana