Deputy Finance Minister in the erstwhile John Mahama administration, Mona Quartey says the Energy Bond floated by the government rather walked out of the market with unexpected complications against the expected turnout.
The government had opted for the single-purpose the Energy Sector Levy Act (ESLA) Bond to mobilise not more than GH¢6 billion.
Although lead managers got GH¢5.3 billion worth of bids from investors they accepted only GH¢4.7 billion. Despite the shortfall, the government has hailed the performance of the ESLA bond issuance which it said yielded almost 80% of their expectation.
Speaking on the Super Morning Show of Joy FM ahead of the presentation of the 2018 budget statement to Parliament, the former Deputy Finance Minister dismissed government's high praise of the performance of the bond.
“The bond developed K-legs because it didn’t walk elegantly,” she told host of the Show, Kojo Yankson at the forecourt of Parliament House where the programme was broadcast Wednesday, November 15.
She is also not convinced about government's approach to managing debts as well as fiscal policies, ruling out the possibility of the country attaining the targeted debt to GDP ratio of 71% by close of 2017.
“For example how can you spend almost 25% of the [Energy] bond that you issued on administrative cost…because we’ve [Ghana] never spent that kind of money in raising funds,” she argued.
The former Finance Minister is therefore “not sure Ghana will have a reduction in the debt to GDP ratio [because] it looks like it is going to go higher,” she stated projecting it “to hit 76% by the end of the year”.
Mounting a strong defence of the government’s policy, Deputy Information Minister, Kojo Oppong Nkrumah said the Akufo-Addo administration stayed within the expenditure limits despite a drop in the revenue projection.
According to him, the latest numbers indicate “clearly that revenue has underperformed [but] revenue is not a means to an end.”
“We have held expenditure in accordance with the revenue inflow,” Oppong Nkrumah expressing hope that they will not go beyond the deficit target which is currently less than 10% of GDP.
“I am confident we can come down to 6.3% because expenditure is coming down,” the Deputy Minister said.
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