Former Minister of Finance, Mr Seth Terkper has asked the current Minister Ken Ofori-Atta to disclose the full terms and conditions of the $750million Afreximbank loan, to Parliament.
He explained that the Public Finance Management Act calls for full disclosures to be made hence, the government must do so accordingly.
His comments come on the heels of a revelation that about $37 million was withheld by the Afreximbank for interest payment obligations, a move that was not part of the agreement Parliament approved.
Speaking in an interview with 3Buisness, Mr Terkper said “The Public Finance Management Act calls for a full disclosure which is derived from the Constitution, that all the terms and conditions should be disclosed.
“So if the interest is going to be paid upfront it must be disclosed. We know this issue with the Zero coupon, that is why I am drawing attention to this issue.”
Last week, a Deputy Minister of Finance John Kumah clarified the disparities in the amount of money received by the central bank under this facility.
The Bank of Ghana (BoG) received $713 million instead of the $750 million expected.
Regarding this loan agreement, Member of Parliament for Ajumako-Enyan-Esiam, Cassiel Ato Forson tweeted after 3business reported that the amount received was less than what was expected, that “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.”
But in a response, Mr Kumah said “I am surprised Hon. Ato Forson thinks liability of government under this facility only kicks in after 3-years. Let me reiterate to that it is the repayment of the principal which will be repaid after a moratorium of 3-years.
“The interest payment, however, starts 6 months after disbursement. Clause 11.1(a) of the agreement outlines as follows…. ‘the first interest period for a loan shall commence on the utilisation date of that loan and shall end on the date falling six-months after the date of this agreement.
“During the term of the NDC, escrow debt service accounts were established for many projects including; a) the CDB Facility for Ghana Gas, b) Kumasi Market Phase 1 and c), the kasoa Interchange Project.
“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 USD37 million from the facility has been set aside for debt service obligations.
“All the documentation relating to this arrangement were supplied to and was approved by Parliament,” he stated.
3news
