Terkper lacks fundamental understanding on Eurobond – Bawumia

Economist and Vice Presidential Candidate of the opposition New Patriotic Party (NPP),  Dr. Mahamadu Bawumia says the Minister of Finance, Seth Terkper’s 2016 budget presentation on the Eurobond loan facility exposes his lack of understanding on the subject. The Minister while presenting the budget to Parliament on Friday touched on a number of issues including health, education, public sector wage , the IMF programme, and the Eurobond.Speaking on the bond, the Minister said: “Ghana has once again issued a landmark bond [Eurobond] and has become the first sub saharan African country outside South Africa to issue a 15-year bond.” An elated Terkper further told the House “government secured its fourth Eurobond at a coupon rate of 10.75 percent with a maturity of fifteen years” adding that, the bond is “a soft amortizing bond to be repaid in three installments of US$333 million in years 2028 and 2029, and US$334 million in 2030.” Rebutting to the Minister’s presentation on the bond in a Citi News interview however, Bawumia was shocked the former was not saddened government had secured the bond at 10.75 percent. “The Eurobond issue of 10.75 percent, the billion dollars issue of 15 years. You are going to be paying 10.75 percent. When you should be crying, you are rather saying you have done very well and it shows a fundamental lack of understanding. It is a very bad deal for the country. 8 percent above US treasuries, compared to 3 .8 percent above US treasuries when we [NPP] did the 2007 budget so that area is really a sad area of mismanagement.  Then you look at the debt stock that this is accumulating.” “This debt stock will reach $99 billion by the end of this year. The interest of this debt alone is going to be 6 times Ghana’s oil revenue,” he argued. Government successfully issued its fourth Eurobond in October but it had to cut back on its initial figure to get a better rate for the bond. – See more at: http://citifmonline.com/2015/11/15/terkper-lacks-fundamental-understanding-on-eurobond-bawumia/#sthash.VYgkOkjO.dpuf