Former Finance Minister (FM), Hon. Seth E. Terkper has exposed the fallacy and the non-economic based argument being advanced by a certain interest group in defence of the recent fiasco of Ghana’s Bond on the market.
Readers will recall that last Tuesday 9th November, 2021 the Daily Statesman newspaper carried on its front page an article published by a London based newsletter outfit called Africa Confidential which sought to suggest that Ghana’s recent Eurobond flop could be attributed largely to the country’s strong anti-gay advocacy which is being championed by the Member of Parliament(MP) for Ningo Prampram, Hon. Sam George with massive support from some MPs on both sides and sections of the general public.
The issue of the Bond flop came up in the Q&A section during his (Terkper’s) special encounter with some business reporters on a preview of the 2022 Budget in the areas of deficit, arrears, borrowing, debt and a possible return to IMF.
Hon. Terkper elucidated the reporters by painting a vivid picture of the true state of the Ghanaian economy while relying solely on official data with other collaborative data from IMF, World Bank and internationally acclaimed rating agencies.
On the specific issue of whether or not the anti-gay conversation currently going on in the country has any bearing or effect on the flopping of the Eurobond yields as ‘Africa Confidential’ seeks to proclaim’, Hon. Terkper stated candidly that “I don’t think it (bond flop) has to do very much with the LGBTQ conversation that’s going on… I would rather say there are more fundamental challenges”.
“I don’t know the full market sentiments in relation to LGBTQ issues but obviously our books don’t look good at all and those are the real issues every investor looks out for” he said.
“Are we saying that the reporters have not been monitoring the concerns raised by the IMF, World Bank, AfDB, rating Agencies and even research investors, at least in the last two?, he asked.
He stated that the causes of Ghana’s fiscal challenges have been incremental and over the period under this NPP administration, Mr. Terkper had been constantly warning the Ministry of Finance over the treating of the banking sector bailout cost and some exceptional expenditure as footnotes in the budget which creates a deceptive picture or under-states the true deficit, arrears and the actual debt to GDP ratios of the country.
It was not until 2019, when the Article IV of the IMF kicked in, whereby as a member State, Ghana owes it a sovereign duty to open her books to other member countries before it came to light that the MoF had been adjusting figures hence the drop in investor confidence.
Hon. Terkper, who earlier decried the attempt to blame the fiscal challenges on Covid 19 emphasized that “in fact some international rating agencies had already departed from Ghana’s position on our debt to GDP and said our debt was actually 80% to GDP instead of the 76% that we were talking about at the time.
Meanwhile, the IMF had retroactively revised the 2018, 2019 deficits to about 7% and has pegged the 2020 deficit around 15%, much higher than that of the GoG.
“But I would hope that we separate the LGBTQ issues from economics so that we can discuss the performance of the falling bond and other yields dispassionately”, he opined.
