We Couldn’t Tell The World Bank Openly How NPP Irresponsibly Misapplied $750m Eurobond

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Created on Saturday, 29 September 2012 00:00

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We Couldn’t Tell The World Bank Openly How NPP Irresponsibly Misapplied $750m Eurobond

29 September 2012

A Deputy Minister of Finance, Fifi Kwetey, has revealed that the National Democratic Congress (NDC) government was not totally upfront with World Bank in 2009 on how the then New Patriotic Party (NPP) administration utilized the $750 million Eurobond loan.

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The Deputy Finance Minister insists a document prepared and signed by the sector Minister, Dr. Kwabena Duffour and sent to the World Bank declaring that the Eurobond was well spent by the NPP government was woefully deficient in information and should be disregarded.

The erstwhile Kufuor administration has been accused of squandering $750 million it raised after it issued Ghana's first Eurobond in 2007 approved by Parliament. The money was to be used in only the energy, road and railway sectors of the country.

However, Mr. Kwetey maintains the money was never utilized for any of these sectors, proving his point with the assertion that the erstwhile NPP government cannot point to any single structure in the country as a beneficiary of the Eurobonds.

Director of Communications of the NPP, Nana Akomea, had sought to question why the NDC will paint a glowing picture to the World Bank on how proceeds from the Eurobond loan was utilized, but for the sake of political expediency, engage in a sudden about turn and lie to Ghanaians that the Kufuor administration misapplied the funds.

Slamming the deputy finance minister who he described in unsavoury words as a repository of lies, Nana Akomea, who was speaking in an interview on Okay FM’s Ade Akye Abia Morning Show cited a June 15, 2009 World Bank report covering the $300 million Economic Governance and Poverty Reduction Credit for Ghana which states inter alia, “The information provided by the Government of Ghana confirms therefore that the proceeds from the Eurobonds were used for productive investments, primarily in electricity generation and distribution…”.

According to him, the World Bank confirmed that these “two areas had been identified in the 2007 CEM as warranting additional investments to sustain economic growth.”

The NPP Director of Communications explained that the record hikes in crude oil prices of 2008, coming on top of the low water levels at the Akosombo Dam in 2007 meant that the Kufuor administration had to spend extra money in buying crude oil to feed the thermal plants for electricity generation.

Nana Akomea further explained that the June 15, 2009 World Bank document, clearly spells out the details of what the $750m was used for, adding that there is empirical evidence to show that for the first six months of 2008, over $1.2 billion was spent on importing crude oil.

“…what they show is that by the time the NDC took over in January 2009, $155 million of the Eurobond funds were still lodged at the Bank of Ghana to be spent,” he said.

“Non concessional borrowing in 2007 was mostly used to raise energy capacity and that of 2008 is being assessed. Out of the US$750 millions borrowed in 2007 in the form of Eurobonds, US$595 millions had been disbursed by January 2009…The proceeds were allocated primarily to support public investments in the energy sector according to the following distribution: US$286 million for investments by the Volta River Authority (VRA); US$134 million for investments by the Electricity Company of Ghana (ECG); US$54 million for the investment in the Bui Dam; US$ 31 million for the Government’s equity investment in the West Africa Gas Pipeline (WAGP); and US$90 million for public investments in road infrastructure….,” the World Bank report said claims Nana Akomea.

He therefore wonders why the NDC would want to lie to the Ghanaian public.

But in a swift rebuttal, the Deputy Minister claimed the NDC, not wanting to hold the whole national economy back, had to cover up the mess and irresponsibility of the Kufuor led NPP administration.

Speaking on the same platform, Fifi Kwetey told host of the programme, Kwame Nkrumah “Tikese” that the NPP cannot be trusted with the economy of Ghana considering their careless expenditures.

According to him, for a bond that Ghana had to retire in next five years and whose interest rate was a high 8.5%, the NPP cannot today point to one major infrastructure; whether “a single road, or bridge, or housing facility, or water system, or energy infrastructure, or school, or hospital that the money was used for”.

He accused the NPP of ignoring real long term infrastructure investment by rather spending these enormous resources into procuring locomotives (at the time the railway tracks were not existent), prepaid meters, and using part of the money to pay salaries among others.

"Now simple question that i asked, Nana Akomea answer the people of Ghana; 'Mention just one major road that you used the $750m eurobond, just one i would not ask for two; just one....Just mention one major infrastructure from Zabzugu-Tatale all the way to Axim to Aflao,...Just as Kwame Nkrumah can point to the Akosombo Dam, NPP mention one...you cannot do it," he posited.

Asked about the NPP's assertion that the NDC told the World Bank in 2009 that the $750m Eurobond loan was effectively utilized, Fifi Kwetey explained that there was no way the NDC could “literally tell the whole world” that an “irresponsible government” wasted $750 million.

“When you are writing certain things to the World Bank and you realize that you had a government that absolutely was a disgrace and irresponsible, you don’t want to go and literally tell the World Bank that you had a whole government who borrowed almost 750 million dollars to buy prepaid meters...to pay workers of Ghana...and buy AGC shares,” he said in a voice tinged with derision.

He pointed out that the NDC government could not be upfront on the matter in the document it sent to the World Bank for Ghana to be a laughing-stock in the eyes of the world.

“…in that document we had to talk in generality that the investment has been used for VRA but they didn’t include the details that it was used on prepaid meters and to also pay salaries of workers of Ghana which is a complete ridicule to the country…no matter how much an opponent the NPP is, the NDC government was not going to put some of the details in the document for the World Bank and the whole world to know how absolutely irresponsible the NPP government was between 2001 to 2008,” Fifi Kwetey said.

Source: Beatrice Adepa Frempong/Peacefmonline.com