According to NDC MP for Ho Central, Benjamin Kpodo, failure to capture debts such as the ones incurred from the collapse of Capital and UT Banks, indicate that government has not accurately reported to the people of Ghana about the country’s debt situation.

[contextly_sidebar id=”azw5Mlh7FaeIax131IbSXOsZTiTy3uxJ”]Contributing to the debate on the State of the Nation Address in Parliament, the Ho Central MP called on the Finance Minister to come clean.

“With these controversies over the figures, I would want to challenge the Minister of Finance to come to this House and give us a list or a schedule for outstanding liabilities; both domestic and foreign so we put this matter to rest. Mr. Speaker, I am currently asking you to rule on this matter,” said the MP.

Ghana’s debt stock hits 137.2 billion

Figures released by the Bank of Ghana (BoG) in January 2018, had shown that the country’s total debt stock had hit GH¢138.8 billion cedis as of November 2017, representing 68.7 percent of the country’s Gross Domestic Product (GDP).

It showed a marginal decrease from September’s figure of 138.9 billion cedis compared to November’s figure of 138.8 billion cedis.

The figures, however showed that the debt stock decreased in October to 137.6 billion cedis before going up to 138.8 billion cedis in November.

The external component of Ghana’s debt also stood at 16.9 billion dollars, equivalent to 74.7 billion cedis, while the domestic component of the debt is at 64.2 billion cedis.

Government had indicated through its issuance calendar that it will borrow 11 billion cedis in the first quarter of 2018.

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By: Duke Mensah Opoku/citifmonline.com/Ghana

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It shows a marginal decrease from September’s figure of 138.9 billion cedis compared to November’s figure of 138.8 billion cedis

The figures, however, show that the debt stock decreased in October to 137.6 billion cedis before going up to 138.8 billion cedis in November.

The external component of Ghana’s debt stands at 16.9 billion dollars, equivalent to 74.7 billion cedis, while the domestic component of the debt is at 64.2 billion cedis.

Meanwhile, government has indicated through its issuance calendar that it will borrow 11 billion cedis in the first quarter of 2018.

Banking Sector performance

In the Banking sector, the figures show a marginal improvement in the total Non-Performing Loans (NPL) of banks from 22.9 percent in October to 22.7 percent in December.

Meanwhile, total deposits in the banking sector hit 58.3 billion cedis in November 2017 compared to 52.7 billion cedis for the same period in 2016.

In addition, total advances made by banks by December 2017, reached 37.7 billion cedis compared to 35.6 billion cedis in 2016.

In terms of annual growth, there was a decline from 18.6 percent in 2016 to 5.9 percent in December 2017.

The BoG data also shows that assets in the banking industry stand at 93.2 billion cedis, while the 2017 end-of-year cedi depreciation against the dollar was at 4.9 percent

External Earnings

Total earnings from the country’s traditional exports were at $13.7 billion at the end of December 2017.

The figure indicated a rise of $2.6 billion from what the country got for the same period in 2016.

Earnings from gold hit $5.7 billion compared to $4.9 billion the previous year. Earnings from cocoa were at $2.7 billion.

Crude Oil exports went up from $1.3 billion to $3 billion at the end of December 2017.

Meanwhile, Ghana’s total import bill as at the end of 2017 stood at $12.6 billion.

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By: Lawrence Segbefia/citibusinessnews.com/Ghana

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The money, which was released last week, will cover the first seven days for the first term of the 2016/2017 academic year.

[contextly_sidebar id=”qhWVoSfmvtBymFc31YWEdnfZB5lGGX3D”]Speaking to Citi News, the Public Relations Officer for Programme, Siba Alfa, also said efforts are being made to make another disbursement next week, to cover an additional sixteen days of the remaining hundred days’ arrears.

“Last week Thursday and Friday, we released seven days of feeding grant to the caterers. The seven days represents part of payment for the first term of 2017/2017 academic year, and we are hoping to make another payment next week Friday, which will be for 16 days, but afterward, we will request for additional funds to be able to clear all the arrears that we owe the caterers,“ he said.

Mr. Alfa explained that, in all, the programme has advanced more than 100 days of feeding grants to caterers so far in 2017, which amounts to GHc 140 million.

He said a request has been made to the Minister of Finance for funds to clear all the arrears.

Protests from caterers

In May, scores of caterers under the school feeding programme besieged the premises of the Ministry for Gender, Children and Social Protection, demanding the payment of their arrears.

Some of the caterers said they had not been paid for more than 8 months.

At the time, the National School Feeding Secretariat said it would pay the debt by the end of May.

Payment of the arrears has been seen to be filtering in to the caterers with the government recently releasing GHc 10 million to them.

The Ghana School Feeding Programme has been ongoing since 2005, under the Comprehensive African Agricultural Development Programme Pillar III, in response to the first and second Millennium Development Goals (MDGs) on eradicating extreme poverty and hunger, and achieving universal primary education.

The basic idea of the program has been to provide pupils in public basic schools with one hot nutritious meal every day.

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By: Farida Yusuf/citifmonline.com/Ghana

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Commenting on the reports on Eyewitness News, Mr. Adams said: “it is a diversion from the blackout we are suffering, it is a diversion from confusion, a diversion from a government that doesn’t know its left from right.”

“This publication is just a publication of diversion. It has no basis, it has no foundation and that is why Metro Mass itself will never come out to tell you such a thing. They know very well about the communication that has happened between them and the National Democratic Congress.”

According to the Daily Guide newspaper, the NDC reportedly owes Metro Mass Transit Limited close to GHc2 million, for renting buses during the campaign period in 2016.

A pro forma invoice issued to the NDC after it lost the 2016 elections, showed that they owed the transport company a total of GHc 1.921,896.99, and the paper said the invoice was sent to the party’s headquarters to be acted on.

Mr. Adams acknowledged the dealings with Metro Mass, but the NDC was still awaiting an invoice for about GHc 410,000 after a written request to the state transport company.

“They are yet to present us with the details of what exactly they did so we know the actual cost and then payment will be done… They are to do the necessary calculations, submit a detailed itemized bill and then we will see how much they need to be paid. We have been waiting for that to happen and once it happens, the matter will be dealt with,” he explained.

The arrangement with Metro Mass saw saw the transport company convey persons to vantage points in the various constituencies on a fare basis under a Ghana Decides project from December 1 to December 7 in 2016, according to Mr. Adams.

He maintained that “they [Metro Mass] haven’t brought us the details, they just brought a number; but we never sat and agreed on any number of buses so we need an itemized list of the moments that happened.”

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

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Addressing Parliament in his first state of the nation address, the President noted that, the sector has enormous problems that must be addressed urgently.

“We have inherited a heavily indebted energy sector with a net debt reaching $2.4bn as of December 2016. I have to point out the alarming facts that $800 million of this debt is owed to local banks which threaten their stability and that of the whole financial sector. Indeed, the huge indebtedness of the energy sector constitutes the single major hurdle to Ghanaians enjoying reliable and affordable electricity supply,” Akufo-Addo said.

In his address, he noted that the country’s power supply had improved significantly since November 2016, however the sector’s problems “are far from over.”

Akufo-Addo bemoaned the high cost of electricity in the country, which he said greatly affects businesses.

“The current state of the energy situation in our country is unsatisfactory. The problems are enormous; but we must and we will confront them,” he said.

Stating some interventions he will introduce to address the challenges, the President said he will prioritize transparency in the sector by introducing a new tariff policy to reclassify consumer categories.

“We will also reduce significantly some of the levies and taxes on the tariff. At the end of 2016, ECG had signed 43 power purchase agreements, while a further 23 were under discussion. The Government is conducting a review of all the power agreements entered into by the previous government in order to prioritize, renegotiate, defer or cancel outright if necessary in the national interest,” Akufo-Addo said.

He noted that, the government was drawing a national electricity master plan to list the Volta River Authority (VRA) and the Ghana Grid Company (GRIDCo) on the stock exchange.

‘Enforcement of procurement law’

The president said his government will insist on open and competitive bidding for power capacity procurement agreements.

“…This will not only reduce the cost of power projects and ensure value for money; but also address the problem of unplanned procurement.”

He added that, government will review the Renewable Energy Act to provide further incentives to attract the private sector to invest in the sector.

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By: Jonas Nyabor/citifmonline.com/Ghana
Follow @jnyabor

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Addressing the press today [Thursday], the Chairman of Parliament’s Finance Committee, Dr. Assibey Yeboah, speaking on behalf of the Majority, warned that if figures were not reconciled with the right data from the previous government, the country could be sanctioned by the IMF.

[contextly_sidebar id=”Coc56d37gTTPYUFbBEfrRYznrD04J7kO”]He cited an instance in 2000 when Ghana was fined $39 million by the IMF.

This press conference was in response to the Minority’s attempts to downplay claims by the Vice President, Dr. Mahamudu Bawumia, that the previous government failed to account for GHc 7 billion they spent while in office.

The Minority explained that, the fund was used for part of the contract database and outstanding commitment, and did not constitute the conventional definition of arrears.

The Minority explained that, the Ghc 7 billion that the Vice President Dr. Bawumia is talking about “is as a result of a major initiative or reform on government contracts and expenditure, which is part of the GIFMIS project that the new administration is expected to continue implementing. The framework is also covered in the new Public Financial Management (PFM) Act, under the Budget Responsibility provisions.”

Dr. Assibey Yeboah, however, surmised that the previous government may not have been forthright with the IMF.

“On the face of the reality that the arrears date back to 2014, then it will suggest that when the previous administration entered into negotiations with the IMF, full disclosure of data was not made available to the fund.”

“Again, on account that arrears for 2015 and 2016 were not fully disclosed, that raises further questions on the integrity of data that we have been churning out over the past eight years.”

Implications for 2016 deficit

Dr. Assibey Yeboah highlighted the implications for the year 2016, noting that, already deficit projected for 2016 is hovering around 8.5 to 9.5 percent of GDP, according to the Bank of Ghana and the Ministry of Finance.

“These new uncovered arrears could put the overall budget deficit at 10 to 11 percent of GDP… For an economy like ours, the current deficit numbers show that in 2016 alone, our expenditures far outweighed our revenues by as much as $4 billion.”

“There is an admission by the minority that the GHc 7 billion expenditure which had been kept out of the purview of the books of government constitutes rare expenditures that have been taken.”

IMF could clear up matter

Given the ongoing implementation of the extended credit facility, Dr. Assibey Yeboah is of the view that the IMF stands in a better position to make some of these issues clear.

“As to whether this represents a breach of the ECF programme conditionality, we will know by next week when the mission chief is expected to brief donors on his findings.”

“Under the programme, the government is not allowed to accumulate arrears. This may yet represent another serious breach of the programme and if care is not taken, punitive actions could be taken against Ghana,” he said.

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

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Citi News’ incessant reports on the situation compelled government to pay one out of three terms debt owed the various schools.

It is unknown when government will defray the total debt, and if this academic term ends without any reimbursements, it will pile up for three terms.

Food suppliers who earlier withdrew their services and demanded full reimbursement, rescinded their decision on humanitarian grounds to enable the students return to the classroom.

A frustrated Bursar of one of the affected schools on condition of anonymity told Citi News school authorities are now dealing with food suppliers without recourse to the procurement process.

He said food suppliers have taken advantage of the situation and are overpricing their goods.

He pleaded with government to permanently resolve the feeding grants problem ahead of the implementation of the free Senior High School education concept.

It will be recalled that, second cycle institutions in the three regions of the north postponed reopening after the Christmas break, due to the feeding grants problem.

The students a week later returned to school and witnessed a reduction of the quantity of food served at the dinning halls.

The non-payment of the accumulated Feeding Grants debt is affecting the academic calendar of Senior High Schools in the three regions of the north.

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By: Abdul Karim Naatogmah/citifmonline.com/Ghana

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Speaking during his vetting at Parliament House on Monday, Mr. Boakye Agyarko said: “The energy sector we find now is seriously cash-strapped to the extent that we now live in a debt merry go round.”

According to him, the energy sector even lacks the resources to ensure regular maintenance that will enhance power supply.

[contextly_sidebar id=”fkRzfrvIgvdhLgisP9CnSvO7gataJI2f”]“The problem of ‘dumsor’ has been principally one of money. If you look at the value chain for power delivery, the major power generator, VRA and the Independent Power Producers (IPP), buy their crude, they generate power, load it onto GRIDCo; GRIDCo sells it to ECG, and ECG collects the money and makes payment. ECG is not able to collect and pay GRIDCo . GRDICo therefore is not able to pay the power producers. The power producers are therefore not able to pay for crude, and that limits their ability to generate power.”

“As it stands now, roughly forty, forty five percent of installed capacity is idle. It is idle because we cannot get the gas, the LCO or the HFO to power these plants. In certain circumstances, we do not have the money to do scheduled and regular maintenance, therefore threatening the plant in terms of warranty and insurance, so the problem has largely been one of how the money has been managed in the energy sector.”

He made this comment while responding to a question posed by a Member of Parliament’s Appointment Committee on effective measures that can be taken to resolve Ghana’s energy problems.

Ghana’s power crisis, popularly referred to as ‘dumsor’, has slowed down economic growth and frustrated citizens.

Way forward

But proffering solutions to these challenges, Mr. Agyarko said the sector under his tenure will commit to improving “financial management and structuring within the energy sector.”

‘Dumsor must remain in the past’ – Nana Addo

President Nana Addo in nominating his Policy Adviser for the 2016 election campaign, Boakye-Agyarko, for the position, asked him to ensure that the power crisis, which was christened ‘dumsor’, becomes a thing of the past.

President Akufo-Addo also indicated that, the Ministry of Power and Petroleum will now fall under the Ministry of Energy, and will be headed by Mr. Agyarko, pending parliamentary approval.

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By: Marian Ansah/citifmonline.com/Ghana
Follow @EfeAnsah

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Sources in government have told Citi News that, Flynas, formerly Nas Air, a domestic and international low-cost airline based in Saudi Arabia, is owed the highest amount out of the larger sum.

[contextly_sidebar id=”50ClatWV62HBQcia7LPlq7zjUFuoH6BH”]Officials of the new government say if the debt is not cleared, this year’s pilgrimage would be hampered, because the airline, which is the country’s first and only budget airline, will not airlift pilgrims.

The airline, which has its head office located at Al Salam Centre in Riyadh, denied Ghana’s neighbour Togo a similar privilege last year, due to that country’s failure to settle its debt to them.

It is unclear how the immediate past National Democratic Congress government accrued the debt, particularly when about 452 prospective pilgrims could not make the trip, and yet their monies were not refunded to them.

For the Hajj in 2016, each pilgrim was expected to pay $3,500 or its equivalent of GHc11, 900.

During the process of airlifting pilgrims in 2016, the Pilgrims Affairs Office of Ghana apologised to unsuccessful pilgrims who were left stranded for days at the Airport and were unable to be airlifted to Saudi Arabia due to what the office described as circumstances beyond their control.

The Hajj Board had promised to refund monies to all those who could not make the trip, but that has not happened.

When contacted for clarification, the outgoing Chairman of the National Hajj Committee, Alhaji Ibrahim Abdul Rauf Tanko, did not confirm or deny the amount of debt except to say that, that his administration will give a full account to the new Hajj committee that will be taking over from them.

He however admitted that the committee has left behind some debt, but said this was not new and alarming, as far as organizing Hajj in the past is concerned.

“I think that it is proper we wait for the new government to take over so we explain and move on from there. Of course there is some debt, but when the time comes we will explain to them and they will explain to you. They know how this debt comes about; it’s not something that is alarming at all.”

It would be recalled that government last year spoke repeatedly about the fact that it had made it possible for Hajj pilgrims in the northern part of the country to fly from Tamale straight to Saudi Arabia, without going through the stress of travelling to Accra to do so.

This was after then President John Mahama inaugurated completed works on the first phase of the Tamale airport expansion and upgrade project.

The inauguration thus paved way for the first batch of pilgrims to be airlifted directly from Tamale to Medina for Hajj.
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By: Ebenezer Afanyi Dadzie/Umaru Sanda Amadu/Citifmonline.com/com/Ghana

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According to him, the situation can  be rescued by Nana Akufo-Addo’s government which will block all leakages of the country’s sources.

He made the remark after he was nominated by the President at the Flagstaff House on Tuesday.

[contextly_sidebar id=”B6hZUxzxbDDl1Bha8HWYoHeiwx4WFzla”]He was among 12 others named for ministerial nominees pending parliamentary vetting and approval.

Osafo-Maafo also expressed confidence in Akufo-Addo’s government which he said will reduce nuisance taxes introduced by previous governments.

“Today, Ghana’s per capita is thousand two hundred [or] thousand three hundred so we are a lower middle income country.  So we cannot be described as HIPC, we can be described as a country heavily in debt, but not poor and that is a big difference.”

He added that, “my first step is to look at the revenue sources and make sure that we block all the loopholes in the revenue side.

“That does not involve any expenditure. It involves looking at the system and blocking all leakages at the customs, airports, harbours, everywhere that we have revenue we must block the leakages. Some taxes are what we call nuisance taxes; you put 17.5% on financial services, how much do you realize from it? Very little, but the efforts of putting up that tax is not worth how much you get. If the tax itself will even impede development, then there is no point keeping it there. You want to free the system to develop. We don’t free systems with taxes, we don’t make money always with taxes. Sometimes you take away taxes to make more money so that people are free to operate to make profit for you to tax,” he explained.

About Osafo-Maafo

Mr. Osafo-Maafo served as the Minister of Finance, later Minister of Finance and Economic Planning, during the Kufuor Administration.

He held this position from February 2001 and January 2005. Between 2005 and 2006, he became the Minister of Education, Youth and Sports. He is credited with leading the implementation of the free basic education referred to as then as the Capitation Grant.

Mr. Osafo-Maafo is an engineer and a project analyst by training and he established his credentials as a banking and finance leader by heading and successfully restructuring two major Ghanaian banks, the Bank for Housing and Construction and the National Investment Bank between 1979 and 1992.

He has been a Consultant to the World Bank, the African Development Bank and the United Nations Development Programme. Mr. Osafo-Maafo is the past Vice-President of the Executive Committee of the West African Bankers Association, and a founding Deputy Chairman of the Ghana Stock Exchange.

He has served as Chairman and a board member on a number of corporations including Nestle Ghana Limited, National Trust Holding Company, Merchant Bank Ghana Limited, National Development Planning Commission, Divestiture Implementation Committee and Donewell Insurance.

He is a fellow of the Ghana Institution of Engineers and an Honorary Fellow of the Ghana Institute of Architects. He is also a fellow of the Ghana Institution of Engineers and an Honorary Fellow of the Ghana Institute of Architects.

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By: Godwin A. Allotey/citifmonline.com/Ghana
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