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Disclose to Parliament full terms of Afreximbank loan

Former Finance Minister Seth Terkper has asked current Finance Minister Ken Ofori-Atta to reveal the full terms and conditions of the $750 million Afreximbank loan to Parliament.

He explained that the Public Finance Management Act requires full disclosures, so the government must comply.

His remarks follow the disclosure that Afreximbank withheld approximately $37 million for interest payment obligations, a move that was not part of the agreement approved by Parliament.

Mr Terkper told 3Business, “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.”

“If the interest is to be paid upfront, this must be disclosed.” We are aware of the problem with the Zero coupon, which is why I am bringing it to your attention.”

Deputy Finance Minister John Kumah clarified the disparities in the amount of money received by the central bank under this facility last week.

The Bank of Ghana (BoG) received $713 million instead of the expected $750 million.

Regarding this loan agreement, Cassiel Ato Forson, Member of Parliament for Ajumako-Enyan-Esiam, tweeted after 3business reported that the amount received was less than expected, “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?”

 

Also read:   Government secures US$750 million Afreximbank loan

“Where is the remaining $37 million?” For the avoidance of doubt, Parliament did not approve $37 million in upfront fees.”

In response, Mr Kumah stated, “I am surprised Hon. Ato Forson believes government liability under this facility only kicks in after three years.” Let me reiterate that it is the principal that will be repaid after a three-year moratorium.”

“However, interest payments begin six months after disbursement.” The agreement’s clause 11.

1(a) states as follows… ‘The first interest period for a loan shall begin on the loan’s utilisation date and shall end six months after the date of this agreement.’

During the NDC’s tenure, escrow debt service accounts were established for a number of projects, including a) the CDB Facility for Ghana Gas, b) the Kumasi Market Phase 1, and c) the Kasoa Interchange Project.

“This arrangement is not new, as the Ministry of Finance has created specialized Escrow accounts for specific purposes on occasion.”

“Amounts from the facility totaling USD37 million have been set aside for debt service obligations in this transaction.”

“All documentation relating to this arrangement was provided to and approved by Parliament,” he said.

 

Source: 3news

 

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