Bawumia: Gov't blows $1bn Eurobond on BoG debt

The running mate for the New Patriotic Party in the upcoming 2016 general election is accusing government of sinking the $1 billion Eurobond it raised for capital investment into reducing debts incurred at the Bank of Ghana.

Dr Mahamudu Bawumia is challenging the government to list which investment the Eurobond has funded.

The government late last year issued bonds to raise funds for its investment project. The bond was heavily oversubscribed.

Speaking to a group of UK-based Ghanaian professionals at a breakfast meeting in London, the former deputy Governor of the Bank of Ghana said the proceeds from the bonds have been misappropriated.

"In the prospectus that sought to convince investors the minister of finance indicated that a substantial portion of the amount borrowed will be used for infrastructure development and critical projects.

"What project did the minister have in mind? The minister should list and provide a detailed plan of what projects he has in mind.

"We are reliably informed that the amount raised has been used largely to reduce the government's indebtedness at the Central bank and that the funds are not available anymore for the purposes for which it was raised.

"This is sad and raises a whole lot of credibility issues," he lamented.

Dr Bawumia said the 2015 budget failed to mention the exact investments to which the Eurobond was put to and that is a cause for worry.

Government has however denied the allegations.
Government sources cite a number of projects including the Ghana gas project, the Kpone Water Project to which the loan has been used.