Officials of the International Monetary Fund (IMF) will tomorrow, October 26, 2017 meet Parliament’s select committee of Finance.
Topmost among the issues officials of the Bretton Wood institution will be discussing with the MPs will be government’s decision to issue GhC10m bonds to retire the energy sector debts which is threatening the survival of some local banks.
The IMF wants the facility to be captured as part of public debt. Government, however, insists it is using an independent Special Purpose Vehicle (SPV), the ESLA Plc for the sole purpose of issuing debt securities to refinance the energy sector debt.
The primary aim of the SPV is to collect and manage proceeds from the bond and the ESLA receivables; and to repay the creditors and bond holders. The IMF, however, argues the SPV will not be truly independent of the Central government and thus the debt must be captured as “Pure” public debt. The Minority has cautioned investors about the high risk level involved in subscribing to the bond.
Speaking on Morning Starr with Francis Abban, a minority spokesperson on Finance, Isaac Adongo argued if any future government decides to scrap the energy sector levy upon which the bond issuance is hinged, investors will be found wanting. “I want investors to know that this is a political risk.”
“The ESLA PLC that will be used to raise the money is questionable. The ESLA is a political decision. Investors must be made aware of the enormous risk they are taking getting these bonds. IMF is saying that the vehicle doesn’t have a balance sheet to carry its debt,” he added.
However, the chairman for the Finance Committee Dr. Mark Asibbey-Yeboah in reaction to the minority’s claims argued government has been candid with investors and will ensure their investments are protected.
“This is transparent, this is a new vehicle that is taking in the receivables and making payments so that government’s hands are not in this one. That’s all, there is nothing secretive and the fund is in full agreement. Adongo, he sits with me on the finance committee, we will meet with the IMF tomorrow, Thursday at 4pm. He can file these questions and I think in the proper forum he will get answers to his questions.”
Another issue which might come up at the meeting is the three-year Credit Facility Programme between the IMF and the Ghana government.