By Liberty AMEWODE
Details available to the dailyEXPRESS on how government spent the seven hundred and fifty million dollars ($750m) Eurobond facility show that the Kufuor administration misapplied the funds in contravention of the spending plan originally prepared and approved by parliament. So far $746.6million out of the amount has been spent leaving a balance of $3.4million.
The expenditure details, following the dailyEXPRESS’ review showed that many of the designated sectors for the Eurobond were denied the required funds and diverted to the non-planned expenditure items.
For example, while a total of $89.4million for the railway sector which badly needed repairs and new equipment, only $13.90million was made available to the sector. The country’s rail lines continue to be shut while large volumes of bauxite and other export goods and farm produce get locked up in the hinterland because of the lack of transport.
Again, instead of the $198.6million out of the Eurobond facility earmarked for the road sector, only $92.27million was allocated.
Available information from the Ministry of Finance indicates that the oft-trumpeted oversubscribed 2007 Eurobond was used to pay for various expenditure items including a loan contracted by the government to pay the November 2007 salaries of government workers. A total of six million, eight hundred and thirty-six thousand, four hundred and thirty-eight dollars ($6.84m) was borrowed to pay salaries and had to be repaid from the sovereign bond proceeds.
Nine hundred and eighty-two million dollars ($0.98m) was also yanked off the Eurobond proceeds to pay Databank and NTHC for their transaction advisory services in respect of the sale of WESTEL, now known as Zain. Zain, then known as Celltel, acquired in 2007 and paid $120million for the 75% shares in the wholly state-owned WESTEL. It is not immediately known why the transaction advisory fees were not paid out of that amount or refunded to the Eurobond account after Zain made payment.
Another $14million was paid out as Interest on 1st Coupon to Citi Bank, $55.5million to buy 2225426 right issue shares of Anglogold, $41.78million to buy crude for the Volta River Authority and $174,033 paid as transaction fees for the Golden Jubilee Savings Bond.
According to the details, which have been confirmed by the Finance ministry, a total of $1.69million was also paid out for Ghana Telecom Bond Solicitation, $2.45million transferred to what is described as a TCMA Account and an additional $432,301 spent to establish an International Financial Services Centre.
Parliament on July 30, 2007 approved by resolution government’s request to borrow $750million from the international capital market at the prevailing interest rate and a maturity period of five to ten years to support the implementation of the medium term investment plan. The 10-year $750million bond was issued on September 27 2007 to mature on October 4, 2017.
The sovereign bond was planned to be spent as follows: Energy sector- $456.8million; Roads sector- $198.6million; Railways sector- $89.4million and Issue costs- $5.2million.
The energy sector expenditure however shot up to $508.28million (excluding $41million used in buying crude for the VRA and captured under ‘others’); only $92.27million spent on the roads sector and $13.90million on railways. $5.2million was spent on bank costs and as much as $126.95million spent on ‘others’.