New Patriotic Party (NPP)\u00a0Member of Parliament for the Effia Constituency in the Western Region, Joseph Cudjoe, has backed\u00a0Dr. Mahamadu Bawumia\u2019s call for parliamentary probe into the\u00a0alleged impropriety in the management of Ghana’s $250 million Eurobond cash by government.<\/p>\n
Addressing students of the Accra Polytechnic last week, Dr. Bawumia accused government of diverting about $250 million of the total proceeds from the nation\u2019s $1 billion Eurobond it issued in 2015 to a private account at the United Bank of Africa (UBA).<\/p>\n
[contextly_sidebar id=”NNCEZ9buE3Z7RIP8jUV87TIAC0GvqpXh”]According to him, the fund was not yet operational. However the Finance Minister at a news conference on Monday to respond to Dr. Bawumia\u2019s claims, said \u201cgovernment acted within the law\u201d. \u201cThe US$250 million seed money to the Ghana Infrastructure Investment Fund (GIIF) lodged by the Board with a Commercial Bank is safe and has already started bearing interest to the idle Fund,\u201d Mr Terkper said.<\/p>\n
But Dr. Bawumia on the Citi Breakfast Show<\/strong> on Tuesday defended his claim and called for a parliamentary probe\u00a0into the transaction.<\/p>\n He also called for\u00a0the resignation<\/a><\/strong><\/span> of the Minister since he has blatantly violated the Bank of Ghana’s regulations.<\/p>\n The Effia legislator in a statement backed Dr. Bawumia\u2019s call, saying the \u201cMinister of Finance sounds so scandalous to me from Government financial management viewpoint that I think we must vigorously pursue Bawumia’s call for Parliamentary enquiry regarding this transaction.\u201d<\/p>\n The MP further asked the Minister to \u201ccome again in his defence of Dr. Bawumia’s revelation that $250 Million allocated to GIIF has been placed with UBA Bank to purchase Treasury Bills.\u201d<\/p>\n Below is the MP’s statement\u00a0<\/strong><\/p>\n Analysis\u00a0<\/strong><\/p>\n The MP in a statement made the following analysis to prove how scandalous the transaction is<\/p>\n (1) At 10.75%, the $250 Million will cost Ghana Government $26.9Million a year in interest cost payable to external lenders. In cedi terms, this interest cost is GhC102 Million.<\/p>\n (2) UBA exchanges the dollar deposit into cedis at GhC3.8 to the dollar and realises GhC950 Million and buys Gov’t T-Bills at 22% with this amount. Interest cost to Gov’t is GhC209 Million a year payable to UBA, unless of course UBA was just instructed to purchase T-Bills on behalf of GIIF in which case the interest amount becomes payable to GIIF.<\/p>\n (3) Add the interest cost in (1) above to (2) above. Then total interest cost to Gov’t is GhC301Million in a year<\/p>\n – a lot of money!<\/p>\n (4) Assuming GIIF\/Gov’t invested the dollars with UBA at even 5% per annum in dollar terms, then inflow to Gov’t\/GIIF by way of interest received is $12.5 Million. In cedis, this amounts to GhC47.5Million.<\/p>\n (5) Subtract interest received by Gov’t from interest paid if the $225Million were placed with UBA in dollars, you get over GhC253.5 Million in net interest outflow from Gov’t.<\/p>\n (6) So assuming the dollars were invested at 5% with UBA, there is a net financial loss to the state of GhC253.5 Million implied in this move by the Minister of Finance.<\/p>\n (7) The following questions arise to achieve sufficiency and completeness of the analysis;<\/p>\n (8) The questions in (7) above give different financial management implications.<\/p>\n (9) Indeed, besides the legal issues involved, this transaction by the Minister of Finance sounds so scandalous to me from Government financial management viewpoint that I think\u00a0 we must vigorously pursue Bawumia’s call for Parliamentary enquiry regarding this transaction.<\/p>\n The issues raised herein are open to further discussions to enable us reveal the hidden “corruption” and or state financial management inefficiencies and incompetence in this transaction.<\/p>\n Hon. Joseph Cudjoe<\/p>\n MP for Effia Constituency<\/p>\n \u00a0–<\/em><\/strong><\/p>\n By: Marian Ansah\/citifmonline.com\/Ghana\n
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