Business Politics

Govt Rubbishes NDC Claims On Afrexim Loan

Deputy Minister of Finance, John Ampontuah Kumah has refuted the claims made by the opposition National Democratic Congress
Ranking Member of Parliament on Finance, Cassiel Ato Forson, that the Parliament approved $750 million Afrexim loan facility and not the $713 million the Bank of Ghana (BoG) is reported to have received on behalf of the government.

Ato Forson was questioning the government to explain the alleged discrepancy in the amount the government received from the Afreximbank loan facility.

In a tweet shared on August 29, 2022, Ato Forson added that Parliament did not approve any fee amounting to the $37 million discrepancy.

“Can someone at the ministry of finance & the Bank of Ghana explain why only $713m out of the approved $750m hit GoG’s Bank account?

“Where is the remaining $37m? For the avoidance of doubt, Parliament did not approve upfront fees amounting to $37m,” parts of the tweet by Ato Forson, who is the Member of Parliament (MP) for Ajumako Enyan Essiam, read.

However, the Deputy Minister for Finance, John Kumah reacting to the claims made by the NDC MP said, the Government has received fully the total amount of USD750 million Monday 29th August 2022 from Afrexim as was approved by Parliament.

Dr. Kumah in a post on his Facebook page said the government as part of the transaction created an Escrow Account for debt service for the facility.

According to him “This arrangement is not new as the Ministry of Finance has from time to time created specialized escrow accounts for specific purposes. In this particular transaction an amount of $37.0 million from the facility has been set aside for debt service obligations”.

“All the documentation relating to this arrangement we supplied to and was approved by Parliament. Government is grateful to Afrexim and asassure all Ghanaians that the funds will be applied especially to the specific infrastructure projects approved by Parliament” Dr. Kumah explained.

The $750 million African Export-Import Bank (Afreximbank) Loan approved by Parliament last month, is part of a 1 billion dollar facility, that reached the Central Bank on Thursday, 25th August 2022.

The 750 million dollars as gathered came in three tranches of 332 million dollars, 187 million dollars, and 193 million euros.

The amount has since been transferred to the Bank of Ghana for a cedi equivalent to help shore up the central bank’s reserves.

The proceeds from the loan, according to the government will help shore up its reserves, which stood at $7.68 billion, as of June 2022, a move that could help slow down the rate of depreciation of the local currency against the dollar.

The government is also looking forward to using the money to finance some infrastructure projects after it expressed its intentions in the 2022 Budget Statement and Economic Policy of Government to raise the Ghana Cedi equivalent of $750 million under a syndicated term loan facility arrangement to support the implementation of the 2022 Budget.

The loan syndication approach was chosen following Government’s announcement that no Eurobond would be issued in 2022 under the International Capital Market Programme (ICMP) until market conditions improve.

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