Gov’t replies Minority on Eurobond issue

Mr Cassiel Ato Forson Deputy Minister of Finance (3)The Ministry of Finance has provided a detailed statement of account on the utilisation of the 2014 Eurobond proceeds of one billion dollars.

This is contained in a statement signed by a Deputy Minister of the Ministry, Casiel Ato Forson, in reaction to a statement made on the issue by the Minority Caucus in Parliament on Tuesday.


Below is the full text of the statement copied The Ghanaian Times yesterday.

  1. On 18th September, 2014, Ghana issued its third Sovereign Bond in an amount of US$1 billion at coupon rate of 8.125 percent. After discount and estimated issue expenses, a total amount of US$988,706,548.00 was credited to Government account at the Bank of Ghana on 19th September, 2014.
  2. Previously the minority alleged that the proceeds from the 2014 Eurobond issue was missing, now they acknowledge that the money is not missing but in Government account at the Bank of Ghana and has been misapplied.
  3. We wish to state that as indicated in the memo requesting Parliament’s approval to issue the Bond and also in the prospectus for the Bond issue, the proceeds from the Bond issue was to be used as follows:
  • Fund capital expenditure (Capex) projects;
  • Refinance short term expensive government domestic debt; and
  • Counterpart funding.
  1. In September, 2014 when Government account with the Bank of Ghana was credited with the proceeds from the Eurobond issue, Government deposits with the Bank of Ghana increased by the full extent of the amount that was credited to Government. As a result Government’s net position with the central bank improved and this is what reflected in the monetary survey as a reduction in the Bank of Ghana’s net claims on government at the end of September 2014, from the position as at end-August, 2014.
  2. This is the standard treatment of all Government deposits with the central bank (for example, the intake and disbursements of the 2007 and 2013 Eurobonds as well as programme loans and grants from development partners). This treatment has nothing to do with the utilisation of the Eurobond proceeds and it also does not mean that the proceeds have been misapplied. The proceeds from the Bond issue are in designated government accounts with Bank of Ghana and are still part of Government deposits at the Bank of Ghana (except for the disbursements made so far). Below are the details of how the proceeds have been utilised so far:
  3. An amount of US$200 million was planned to be used for short-term debt re-financing. Of this amount, a total disbursement of US$64,993,254.06 was transferred to pay for the maturing 3-year Government Bond totalling GH¢200 million on 15th October, 2014. Thus, leaving a balance of US$135.01 million on this item.
  4. Secondly an amount of US$250 million was planned to be used for Ghana Infrastructure Investment Fund (GIIF) Account. As at 24th October, 2014 the total amount had been transferred into the GIIF Account as a Seed Capital for the Scheme which will be commissioned in early 2015.

iii.      Thirdly, an amount of US$250 million was planned to be used to fund capital expenditure projects. As at today, a total of US$114.95 million has been used to pay for various projects, leaving a balance of US$135.05 million.

  1. Finally, an amount of US$288.71 million was planned for Counterpart Funding. Nothing has been utilised so far, under this component.
  2. Consequently, in sum, the total amount utilised so far is US$191.23 million, leaving a total un-utilised amount of US$808.77 million part of which are lodged into the various designated accounts as elaborated. The Table below sums it all.


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