According to him, the high cost of the project is already throwing government’s budget out of gear.

“For me I’m looking at the figures…Out of GHc240 million that was going into the ABFA [Annual Budget Funding Amount] to be used for good and services, GHc211.11 million went into the free SHS…So is that which is causing some of the misalignment in the budget,” he added.

Speaking on the Citi Breakfast Show on Monday, March 26, 2018, Mr. Terkper warned that other critical sectors of the economy, such as health, risks being cash starved if allocation meant for them are diverted to finance the Free Senior High School project.

[contextly_sidebar id=”FhgPKucoNfwxb1jIQHb3RIPXTjZYTuGp”]“Free SHS helps a lot of poor people, no question about that. But what is the cost? We have taken a lot more of our oil revenue there. We said we will raise revenue for Free SHS, now we are using the traditional sources of revenue,” he stated.

He recalled that all the measures government outlined to sustain the project have not materialized.

Mr. Terkper pointed out for example that government promised to set a special fund to support the project but it yet to be done.

“We said that we would create an education fund for the Free SHS.  What is the status of that fund? We have capped statutory funds and others and we are using it”.

He warned that capping some statutory funds is already affecting other areas of the economy which also urgently need funding.

“We are seeing a misalignment of the budget. We have to start putting things together. Ministers are out there saying their allocations are not adequate. Where is the money going at a time that we are getting more oil from the TEN fields and Sankofa field?”.

Mr. Terkper observed that there must be a new approach to save the program from collapsing since government has not put in place a long term policy to sustain it.

Click below for the full interview on the Citi Breakfast Show:

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By: Lawrence Segbefia/citibusinessnews.com/Ghana

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This was revealed by a former Finance Minister Seth Terkper, who told host of Citi Breakfast Show Bernard Avle, that  the dispute between the two countries led to the high yields Ghana got on the two bonds.

” …..At the time we are relying on the work the technical team was doing to show that we were confident. To some extent that most of the investors believed and were able to do this bond, it affected the yield and the rate. Sometimes when you are talking about the rate you wish you had bonds it is a very prime example of a sector that is beyond control which could affect the yields or the price paid for them, this was a real factor”. He said.

[contextly_sidebar id=”0zdW51SPVR9IuIDtJFM98602z7p3mbJF”]The revelation follows the Special Chamber of the International Tribunal of the Law of the Sea(ITLOS)’s ruling on the case over the weekend.

Yield on 2015 & 2016 Eurobonds

Yields on Ghana’s last two bonds, the fourth and fifth Eurobonds were the highest recorded in the history of the country.

The yield on the 2015 Eurobond for example was 10.75 percent, against government’s initial target of 8.5 percent while that of 2016 was at 9.25 percent.

The World Bank’s guarantee of 400 million dollars at the time, on the 2015 bond as well as plans by government to set up an infrastructure fund to use proceeds from the country’s Eurobonds played a key role in Ghana getting 10.75 percent interest, which was to be higher.

The high yield at the time were attributed to Ghana’s economic challenges.

Reacting to concerns over the high yield of 10.75 percent in 2015 Mr Seth Terkper had said Ghana remains the only sub-Saharan African country that is able to raise a fifteen year bond at such a yield and asked critics not to compare a 10 year bond to the current 1 billion dollar 15 year Eurobond.

“They were comparing a 15 year bond to a 10 year bond that is comparing apples to oranges. I think they would have served the Ghanaian public well if they have checked. There is a sub – Saharan country that was able to raise a 15 year bond in the first place and was able to roll it at a lower yield and thirdly under the circumstances which the markets find itself now. Now we are going to use the bond to refinance 90 day bill”.

ITLOS case impact on Eurobonds

But speaking on the Citi Breakfast show the Former Finance Minister Mr Seth Terkper stated that the rates were extremely high due to the dispute between the two countries and the uncertainty at the time of the outcome of the case.

”………The fact that it was so significant that usually before we do what is called the final descriptions, where a series of questions are asked of the Minister of Finance and one of them in 2015 and 2016 in particular was whether the Minister for Finance believed or had any information that suggests that Ghana would not win the case.”

Ghana dragged Ivory Coast to ITLOS in September, 2014 after negotiations with Ivory Coast over the disputed boundary broke down.

ITLOS however on September, 23, 2017 ruled that there had not been any violation on the part of Ghana on Ivory Coast’s maritime boundary.

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By:  Vivian Kai Lokko/citibusinessnews.com/Ghana

The post ITLOS case triggered high interest on Ghana’s Eurobonds appeared first on Citi 97.3 FM - Relevant Radio. Always.

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.

[contextly_sidebar id=”X4OO2aG8ZaeEkUmvAodH9C0gEOoCUfvm”]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.”

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

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Mr. Terkper said this was achieved despite the significant challenges that confronted the economy in the form of the power crisis and the rough global economic terrain, which affected interest rate, gold and cocoa prices, which are two of Ghana’s major export commodities.

Speaking on the Citi Breakfast Show, he said his government had “managed to bring the economy to a point of stabilization and where, as we have been indicating, we have seen a clear turnaround. Growth is increasing; the Cedi has also stabilized considerably since last year. We have seen inflation begin to come down.”

Mr. Terkper also spoke highly of the outgoing government’s handling of debt, despite the country’s debt stock rising as high as GHc 112.4 billion.

The Finance Minister indicated that, the current debt to GDP ratio is about 71 percent, whiles noting that “for the first time in over 12 years, since the declaration of HIPC [Ghana assuming the status of a Highly Indebted Poor Country], we have seen the rate at which we actually accumulate debt decline.”

Investments setting the tone for economic growth

Mr. Terkper also cited investments in oil and gas, which he said will be fueling the growth of the economy.

“We have made significant investments also in oil and gas, in particular, the World Bank partial loan guarantee… Ghana will start a robust growth as a result of these investments.”

According to Mr. Terkper, these investments have seen the Floating Production Storage and Offloading (FPSO) at the Tweneboa, Enyenra, Ntomme (TEN) field start the production of crude oil along with the expected production of gas from the third FPSO at the offshore Cape Three Point Sankofa development, which is near completion.

“This, together with the growth in the services sector, is definitely going to ensure more stability for the economy,” he stated.

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

The post We’ve left stabilized economy for NPP – Terkper appeared first on Citi 97.3 FM - Relevant Radio. Always.

Seth Tekper cited major economic policy decisions including specific investments in the power sector which he said prevented the country from sliding into a recession.

In the last three years, the country has gone through serious economic challenges, which compelled government to resort to the International Monetary Fund for help.

The opposition New Patriotic Party have argued that Ghana’s economy has collapsed making it difficult for Ghanaians to survive.

[contextly_sidebar id=”nImnIqkwIM2vuFy9GfGWNdPKtx8akRDZ”]But speaking on the Citi Breakfast Show on Friday, Seth Tekper made a case for what he called the prudent management of the economy.

“Within the last eight years there were investments that we made particularly in oil and gas. For instance the Atuabo gas processing plant which we all agree came in handy, the situation with dumsor would have been worse if we didn’t have Atuabo. It would have been worse if we were flaring the jubilee gas.”

“So we took a loan, got the pipelines, put a plant and we are processing our own gas. That is the first example. Then we started the exports…based on those mechanisms the economy grew, so you can see again specific action. Then we had gold, cocoa and later crude oil prices all going down. Then we decided to stabilise the economy through some tough measures. You would agree with me that today Ghana is not in recession. Some African countries that have gone through that are in recession. We are not in recession, yes we experienced a slowdown in growth but we never went into recession,” he added.

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By: Pearl Akanya Ofori/citifmonline.com/Ghana
Follow @pearlakanya

The post We’ve stabilized economy – Terkper appeared first on Citi 97.3 FM - Relevant Radio. Always.

The party alleged that government has signed a fraudulent deal worth about $300 million for the supply of national security equipment with UK-based firm, Santa Barron.

[contextly_sidebar id=”c2SobRCLRpi7kKfV3GIzUbFhWYKR2WRi”]The NPP further said, government has already paid the UK-based firm $120 million dollars for the supply of the equipment in November without due diligence.

But according to the Finance Minister, Seth Terkper, government has also not made any payments as alleged by the NPP.

Responding to questions on the issue on the Citi Breakfast Show, Mr. Terkper was adamant that “no payment was made, let us establish that fact. Let me state for a fact that no payment was made. No advanced payment was made. I say that for a fact and I challenge anybody.”

His answers align with that of the Chairman of Interior and Defence Committee in Parliament, Fritz Baffour, who described the claims as ridiculous.

According to Mr. Baffour, his committee was not aware of such expenditure given that such a deal would have come before his committee before being initiated.

Without going into details, Mr. Terkper explained that the deal which kicks in 2017 “was medium term plan for the supply of security” that could enhance revenue from peace keeping efforts.

“Instead of buying things ad hoc, the more equipment you have, the more you earn on peacekeeping for example. So we are saying let’s aggregate, let’s buy the revenue in bulk so it can be deployed and then the peace keeping revenues and others can be accrued,” he noted.

On the Finance Ministry’s part, Mr. Terkper noted that, “the step we took was to say the Ministry of Interior must encumber its budget resources for that.”

Company has track record in Ghana

He also denied claims that the company lacked any track record with Ghana and was “established just yesterday” as purported by the NPP.

“The company is not six months old. The company was actually established in 1993 and has been doing business in Ghana over the years,” the Finance Minister said.

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

The post Alleged $300m payment to UK firm false – Seth Terkper appeared first on Citi 97.3 FM - Relevant Radio. Always.

He said government has taken the needed measures to ensure that all the Krobo communities from Bokunor to Koforidua get access to pipe-borne water.

[contextly_sidebar id=”GvMRziaXfFqvTx9gFvVgUbwSEHMlo0C3″]President Mahama said, currently work is on-going to get pipe-borne water from Bokunor to Assewa for communities around Assesewa to benefit from potable water.

He said the contract was to help correct the unfair situation created when the initial project was implemented to get portable water from Bokunor in the Manya Krobo area to Koforidua and beyond under the Koforidua water project.

President Mahama was speaking at the grand durbar to climax the celebration of this year’s annual Nmayem festival of the chiefs and people of Manya Krobo at Odumase.

He said the 26 out of the 140 Krobo communities that were left out in the rural electrification project in some parts of Upper Manya, Yilo Krobo and the middle belt are being connected to the national electricity grid.

He said soon the Krobo –Odumase town, Assesewa and Sekesua communities’ town roads would be awarded on contract for rehabilitation and this would also affect the Atua Hospital road.

Nene Sakite, the Konor of Manya Krobo, commended the Finance Minister, Mr Seth Tekper and his staff at the Ministry for their good work for the country.

He said the chiefs and people of Manya Krobo are proud of Mr Tekper who is an indigene of the Manya Krobo Traditional Area.

The Konor also used the occasion to honour Mr Joseph Tettey Angmor on his appointment as the Deputy Eastern Regional Minister and presented him with a citation.

The Konor commended the government for the various developmental projects that has been implemented in the traditional area and appealed for the rehabilitation of the Odumase Krobo town roads especially the road leading to the Atua Hospital.

Nene Sakite appealed to President Mahama, who was the guest of honour at the durbar, to personally intervene and ensure early completion of the community day Senior High School which was being constructed at Obapa.

He said the project had come to a standstill and appealed for work to continue to enable young people in the traditional area to have access to secondary school education.

Nene Sakite appealed to all parties contesting this year’s presidential and parliamentary elections to gracefully accept the results of the elections and to conduct themselves in a way to guarantee the peace of the country.

He said the Manya Krobo Traditional Council has planned to construct a new three storey buildings to house the offices of the traditional council and also to construct a new palace with a museum to preserve and protect the history of the people of Manya Krobo.

He appealed to the citizens of Manya Krobo both home and abroad to come and support the traditional council to implement the project.

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Source: GNA

The post Manya Krobo will enjoy more projects under me – Mahama appeared first on Citi 97.3 FM - Relevant Radio. Always.

The task force according to a document sighted by citifmonline.com is made up of five members.

The document titled ‘Decisions Memorandum on the Work of the Presidential Special Task Force on utilizing the US$3 billion CDB Facility’ stated that the amount would be spent on the team’s “negotiation support costs including hosting in Accra and travel to Beijing; technical advisor’s fees and contingencies.”

“The preliminary analysis of the three costs…above are budgeted at an amount of US$ 6.00 million (i.e. CDB Task Force Support Costs; Technical Fees; and contingencies). And it is estimated that the CDB Team and Advisors may well make up to a minimum of 6 to 8 separate negotiation visits to Beijing over 12 to 10 months on the assignment,” the document added.

The Decisions Memorandum however explained the Task Force’s lack of offices or attachment to any Ministry Department and Agency (MDA) “poses peculiar challenges.”

“…The more substantive needs of hosting several days of engagement with a visiting CDB negotiation team of usually 20 people more or less at a time requires more substantial logistical backup,” the document stated.

Background of CBD loan

The governing National Democratic Congress about five years ago started chasing for $3 billion loan facility from the China Development Bank to finance some government projects.

Though government finally secured the loan, the amount was slashed by half.

Renegotiation of deal

Meanwhile the newly constituted Task Force is expected to ensure that the rest of the $3 billion is released to Ghana.

NPP accuses NDC government of luring Chinese with gas

The New Patriotic Party (NPP) at a press conference on Wednesday accused the Mahama-led cabinet of approving a proposed agreement which could see Ghana offering its gas to China in a bid to lure the China Development Bank to reactivate the reaming $1.5 billion of the $3 billion to the Ghanaian government.

The opposition party claimed that the agreement has bleak implications on the future of Ghana.

The agreement if successful could see Ghana offer one of the country’s gas fields to China for a period of 19 years starting in 2018.

We’ll mortgage Ghana’s gas to China but

Though the Minister of Finance, Seth Terkper, confirmed the deal with China on the Citi Breakfast Show, he downplayed assertions that it has bleak implications for the country.

He indicated that it was “gas going to the Atuabo plant only under the GNPC. That is the only one we are talking about.”

Mr. Terkper also explained that this agreement was in line with government’s self-financing loan strategy following the negotiations with the CNB by a task force mandated to discuss the utilization of the $500 million remaining $1.5 billion of the $3 billion deal.

“The premise for the CDB facility, which is in tune with our self-financing loan strategy is that proceeds from any commercial project must be used to pay for any loans that are used to finance the project,” he said

“The payment was to be from revenue flows from crude oil which is sold on the international market at bench mark prices but crude oil prices fell and that source of financing the loan became inadequate… So we had indicated that once the processes start, there could be other source of financing repayment for the facility. That is the discussion that we are holding now, to see how we can use the proceeds from lean gas and from other gas sources to finance any infrastructure that is built and not put the load for such infrastructure on the tax payer and increase public debt,” Mr. Terkper noted.

Target for the Presidential Task Force as captured in the Decisions Memorandum:

The work of the CTF and TA will initially focus on bedding down the three RSAs for the project that were agreed upon to close the US$ 1.5 billion, and to assist the Ministry of Finance to document and negotiate the early disbursements that will free those subsidiary to implement the three projects.

The next focus of attention is the application of the remaining US$ 1.5 billion, as directed by H.E. the President.

A key consideration in the analysis for the foregoing work is whether or not the new structure of the project for which the remaining US$ 1.5 billion will be applied will fall within the parliamentary approval of 2012 or a new approval may be needed. This strategic and process analysis to be done by the NSA.

Navigating through the “establishment” (GoG Executive Machinery, Legislature, MDAs, MMDAs, Legal system, approval and authorizing agencies, etc.) can be a daunting task. Indeed, this can constitute a key impediment to rapid negotiation decision-making. The technical advisor will facilitate the CTF’s interface with the establishment to achieve speedy and timely closure to specific issues that may require their involvement in the course of the negotiations.

While the above provides a guide to the nature of the outcomes that may be bench marked for the work of the CBD Task Force, the broad targets can be narrowed down to specific negotiation issues, or be expanded to include others. A key principle underlying the approach to the work by the CTF and also covering the TA’s advisory inputs is the avoidance of the undertaking tasks or activities like feasibility studies that are best left to project contractors to conduct to show evidence of their capability.

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By: citifmonline.com/Ghana

The post CDB task force to spend $6 million in pursuing $1.5 billion gas loan appeared first on Citi 97.3 FM - Relevant Radio. Always.

The Committee noted that the government’s request became necessary due to the tight election calendar which made it difficult to come out with an Appropriation Act before the end of 2016.

This request is also in line with Article 180 of the 1992 Constitution and Section 23 of the Public Financial Management Act, 2016 (Act 921).

Among the notable expenditure budgeted for includes the compensation of employees which has been budgeted at GHc 3.8 billion.

GHc 1.8 billion will also be spent on interest payments whilst grants to other government units will cost GHc 2.3 billion.

Finance Minister, Seth Terkper noted that all the expenditure budgeted for the first quarter is for essential and statutory payments whilst all non-core expenses will be deferred to the second quarter of 2017.

Projected revenue

The Finance Ministry is projected to raise revenue amounting to GHc 8.9 billion for the first quarter of 2017, according to the Committee.

The bulk of this projection, GHc 7.2 billion, will be from taxes ranging from income and property tax to international trade taxes whilst non tax revenue is expected to be GHc 1.1 billion.

Non presentation of budget

Contrary to the expectations of many, Finance Minister, Seth Terkper, did not present the details on the floor of the House as the Bill was referred to the Finance Committee for discussion.

But a former Majority Leader in Parliament, Dr. Benjamin Kumbuor explained to Citi News, the turn of events was acceptable as the Finance Minister was just giving projections not to be accompanied by policies.

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

The post Gov’t requests GHc 10.9bn for 2017 first quater appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to statement from the Finance Ministry the bond was oversubscribed with orders exceeding 4 billion dollars but government took only 750 million dollars.

‘Ghana has priced and will issue its fifth Eurobond of US$750 million at a 9.25% yield. The bond was oversubscribed, with orders exceeding US$4 billion compared to a target issuance size of US$ 750 million. This represents an oversubscription of more than five times indicating the high appetite for Ghana’s credit’.

The Eurobond however will mature in 5 years; the shortest period in the history of Eurobond issues in Ghana and the principal will be expected to be repaid in three installments of US$250 million in September 2020, September 2021 and September 2022.

‘The bond is a back-end amortizing maturity with a weighted average tenor of 5 years’.

The bond which attracted investors from the United Kingdom, Europe, the United States, Middle East and Asia will be listed on the Irish and Ghana Stock Exchanges’.

The statement from the Finance Ministry added.

Minister of Finance Seth  Terkper, at the end of the pricing in London, today, expressed his satisfaction with the bond issue and the processes that led to its success, noting that ‘Ghana’s turnaround story had significantly improved investor confidence. This has enabled the country to borrow on more reasonable terms compared to other recent transactions, including the 2015 bond that was issued with a World Bank/IDA guarantee. The transaction is a vindication of the decision taken in August not to issue immediately.

The continuing support of investors in the Ghanaian economy is very much appreciated’.

Government has been forced to put on hold issuing of the Eurobond a number of times because of  unfavorable market conditions.

It was forced to put on hold the launch last month [August] after investors quoted interests much higher than government had expected.

Interest for the last Eurobond issued last year [October, 2015] which was backed by a World Bank guarantee of 400 million dollars was 10.75 percent, the highest attracted so far.

The high interest rates that were demanded by investors have been attributed to the country’s current economic challenges as well as high debt levels.

Proceeds from the Eurobond will be used to retire the first Eurobond which matures next year [2017].

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By:  Vivian Kai Lokko/citibusinessnews.com/Ghana

The post Ghana issues fifth Eurobond at 9.25% appeared first on Citi 97.3 FM - Relevant Radio. Always.