4 More Season of Debts, As Akufo Addo Sets To Borrow $5 billion in 2021

The Ministry of Finance said in a statement on Tuesday that the Akufo Addo administration is planning to borrow a whopping US$ 5 billion from international capital markets in just 202.

The administration which has borrowed more than all previous administrations combined since independence, claims this borrowing will be used to pay off existing debt as well as support the budget.

According to the government, it will use various instruments including Eurobonds, diaspora Bonds, syndicated loans and bridge loans.

The government says it is in the process of mandating Bank of America, Citi Bank, Rand Merchant Bank, Standard Chartered Bank and Standard Bank as lead managers, the statement said.

“One of the key mandates for the banks is to advise the government on various alternative funding structures and options especially for the Eurobond,” the government statement said.

International newswire Reuters has reported on it as international finance organisations warn of Ghana’s insatiable appetite for debts that have sent it into “HIPC” levels with debt-to-GDP currently hovering unsustainably around 70%.

Incidentally, the international finance organisations that the Finance Ministry listed as lead brokers of these loans are the same used by the government in the past, mostly through the private investment brokerage firm of the Finance Minister, Ken Ofori-Atta.

For Mr. Ken Ofori-Atta, there is an unlimited incentive for him to drag Ghana deeper into debt because his private company earns juicy commissions from each of such deals brokered.

In just about four years of the New Patriotic Party (NPP) being in government, Ken Ofori-Atta’s Databank Financial Services’ assets have “miraculously” jumped by almost 600%.

Databank is now worth about US$1 billion (about GHC 5.2 billion) according to official data. 

Already, Databank has been the advisor for the more than US$ 5 billion Eurobond debt that the Akufo Addo administration has racked up in the past four years.

Almost every Eurobond floated by the government is routed through Databank which serves as transaction advisor for the government.

Former President John Dramani Mahama has noted that this clear conflict of interest gives the Finance Minister a personal incentive to source for more debt for Ghana because his private company benefits directly from commissions accruing from such loans.

Meanwhile, official data shows that Databank was clearly struggling financially before Mr. Ofori-Atta was appointed Finance Minister where he caused juicy financial deals of the government to be siphoned through his company. 

As of December 2016, the entire assets that Databank was managing was valued at some GHC 826 million. By the close of 2017-Just one year after coming to power, the Finance Ministers’ private company’s assets had shot up over 266% to GHC 2.2 billion. 

As of 2020, the total asset of Databank has increased by 530% to GHC 5.2 billion in three years. Indeed, the Finance Minister recently boastfully confirmed this in an interview on Peace FM.

Since 2017, the so-called financial sector clean-up has seen some 400 financial sector operators closed down by the Akufo Addo administration under the guise of a clean-up in the industry. Over 7 major indigenous banks and over 350 non-bank financial sector operators have been closed down by the Bank of Ghana (BOG) and the Securities and Exchange Commission (SEC), which is headed by Rev. Ogbarmey Tetteh, a former top executive at Databank.

Some of the collapsed brokerage firms and banks had the capacity to act as transaction advisors for those Eurobonds, experts tell Whatsup News.

“He has collapsed the businesses of all his competitors in the securities sector. The banks he has collapsed is uncountable. And he has taken over,” charged Sammy Gyamfi, the National Communications Officer of the opposition National Democratic Congress (NDC) in an interview a few months ago.