NDC Approves $300m Dodgy Loan

Mark Woyongo – Defence Minister
Debate on a $300 million loan facility for purported peace-keeping missions by the Ghana Armed Forces yesterday resulted in name-callings in Parliament.

The Minority New Patriotic Party (NPP) accused the government of ignoring pertinent legal advice by the Attorney-General not to contract the loan, due to the prescribed conditions and agreements.

The NPP pointed out that it was not against the move to equip the Ghana Armed Forces in principle, but it would not support a loan that the government's own Attorney-General had advised against. Issues like high interest rate of Libor, 7% for the loan with management fee of $6 million as well as upfront payment of $5.5 million to the loan arranger and the facility agent, VTB Capital based in London, which according to the Minority, has questionable credibility, basically form the bases of the A-G's admonition.

The AG had in a letter dated April 1, 2014 and addressed to the Finance Minister, Seth Terkper, warned that the provision of the loan was a departure from the usual financing agreements where the lender monitors the activities of the borrower to ensure that the proceeds of the loan are used exclusively for the purpose for which the facility was advanced.

“The provisions of this clause raises concern, especially so where the agreement provides in Clause 3(1) and (2) that the facility is for specific purpose and for any other matters agreed between the parties,” the AG said, arguing strongly that “any other matters” in the above clause is very difficult to ascertain in the circumstances.

A member of the Finance Committee and NPP MP for New Juaben South, Dr. Mark Assibey-Yeboah, said the Minority would not be part of the loan because he saw the facility not only as another fraud to be perpetrated on the country, but also 'chop money' for some members of the government and their families.

His comments elicited thunderous boos from the Majority members who also said the Minority's position on the loan facility was anti-military.

The ranking member of the Finance Committee and NPP MP for Old Tafo, said he could not come to terms with the development concerning the $300 million loan facility, citing some 'loopholes' which led to it being stepped down during the first meeting of the second session of the House, only for it to be brought again to Parliament with the Attorney-General confirming the fears of the Minority.

“Mr. Speaker, how can the arranger, lender and facility agent be paid a whooping sum of $5.5million?” he queried, stressing that the management fee of $6 million could not be value for money, looking at the precarious financial circumstances the country finds itself.

The Ranking Member for Finance also raised questions about $20 million of the loan being allocated for the supply of fuel for the operations of the military in Ghana, while the money is meant for peace-keeping abroad.

He also noted that the allocation of $20 million for the training of the military, including feeding, medical screenings, vehicle maintenance and administration, is also too much.

The NPP MP for Akuapem North, William Ofori Boafo, said that Ghana Armed Forces are already established in countries like, Liberia, DR Congo, Lebanon and Cote d'Ivoire, and so there was no need to provide further financial support to them. He said the government should rather raise money from its resources to finance United Nations peace-keeping in South Sudan, Somalia and Mali – which are new conflict areas.

The National Democratic Congress (NDC) Member of Parliament for Awutu-Senya West, Hanna Tetteh and NDC MP for Garu, Dominic Azumah, called on their colleague NDC MPs to vote for the loan because 'it will help the Ghana Armed Forces.'

The loan was consequently approved by the Majority NDC MPs with the Minority NPP abstaining.

 By Thomas Fosu Jnr