NDC Proforum USA Warns Akufo-Addo, NPP Govt To Stop To Collateralize TEN Oil's Earnings Like GETFUND

THE NATIONAL Democratic Congress (NDC) Professional Forum United States of America (USA) has issued a strong worded press statement cautioning the New Patriotic Party (NPP) government of the President Nana Addo Dankwa Akufo-Addo to, immediately stop its attempt to collateralize TEN oil's earnings like Ghana Education Trust Fund (GETFund).

The argued that the diabolical move, which lacks parliamentary approval is just one of the many chicaneries and shady deals of the incompetent government of the NPP adding that since 2017 the NPP  have continuously mortgaged our national assets and future earnings for nonsense.

Research and Policy Analysis Desk of NDC Proforum North America, Dr. Justice Salifu, the group noted that Another damming scandal on the runaway taxiing to take off is the attempt by the NPP government to collateralize earnings from TEN oil field to cash out a US$431 million loan from LITASCO. 

According to the statement which was copied to Soireenews com, this will make every Ghanaian more indebted by $14 or when converted using Bawumia’s exchange rate GH¢167.00. 

"And the government is still on heat to collateralize more assets including Agyapa.

By the government’s mindset and conduct, we have no doubt that if the Noah’s Ark was built in Ghana, it would have been collateralized for loans by Bawumia and Ofori-Attah before the flood. In that case the good people would have gotten drowned.

"No matter what explanation the government puts out in reaction to the minority in parliament, we still believe that its intentions for this move lacks economic prudence and not in the interest of our nation. It also shows that the government has slowly run out of the capacity to manage  the energy sector, which is reeling with huge debts to IPPs," the statement said.

It streesed that "Whiles the IMF is pushing for external debt restructuring through Ghana’s Creditors Committee, comprising Paris Club members and China, the low recovery of cost of energy production, coupled with mismanagement have tossed the energy sector into exposure  of risk of Dumsor’s revisit.

Certainly, the statement mentioned that the rate at which the government is sniffing and shopping around for loans, despite the current huge debt crisis, is an indication it has now contracted full blown addiction to borrowing without thought of a detox.

The statement argued that sad part of the situation is that, the more Ghana is committed to these collaterized loans arrangements, the more the capacity of future governments to borrow to invest in productive ventures as part of its economy’s resuscitation agenda diminishes. 

After running down every profitable organization bequeathed to it by the NDC’s  administration, including GNPC, NIB, ADB, BOG, and practically every sector, except the propaganda sector, the government continue to pursue the same poorly crafted policies that brought our economy to its knees. 

Strangely, the statement noted that  even with the presence of IMF in town, the “borrow and spend” madness of Ofori-Attah has persisted. 

Obviously, the statement said the government has not only run out of operational current, but ideas to restore basic economic sanity. 

It added that "Whiles the promised fiscal consolidation is poorly pursued; the tower of the land of debt sustainability is not yet in sight; and the macroeconomic stability badly needed is like candle in the wind. In the midst of all these failures, the government’s addiction to borrowing lingers."

“STOP THE ATTEMPT TO COLLATERALIZE TEN OIL’S EARNINGS LIKE GETFUND- NDC PROFORUM USA LECTURED GOVERNMENT”

Date: September 7, 2023

For Immediate Release 

Another damming scandal on the runaway taxiing to take off is the attempt by the NPP government to collateralize earnings from TEN oil field to cash out a $431 million loan from LITASCO. 

This will make every Ghanaian more indebted by $14 or when converted using Bawumia’s exchange rate GH167.00. This move, which lacks parliamentary approval is just one of the many chicaneries and shady deals of the incompetent government of the NPP. Since 2017 they have continuously mortgaged our national assets and future earnings for nonsense.

 And the government is still on heat to collateralize more assets including Agyapa. By the government’s mindset and conduct, we have no doubt that if the Noah’s Ark was built in Ghana, it would have been collateralized for loans by Bawumia and Ofori-Attah before the flood. In that case the good people would have gotten drowned.

No matter what explanation the government puts out in reaction to the minority in parliament, we still believe that its intentions for this move lacks economic prudence and not in the interest of our nation. It also shows that the government has slowly run out of the capacity to manage  the energy sector, which is reeling with huge debts to IPPs. 

Whiles the IMF is pushing for external debt restructuring through Ghana’s Creditors Committee, comprising Paris Club members and China, the low recovery of cost of energy production, coupled with mismanagement have tossed the energy sector into exposure  of risk of Dumsor’s revisit.

Certainly, the rate at which the government is sniffing and shopping around for loans, despite the current huge debt crisis, is an indication it has now contracted full blown addiction to borrowing without thought of a detox.

 The sad part of the situation is that, the more Ghana is committed to these collaterized loans arrangements, the more the capacity of future governments to borrow to invest in productive ventures as part of its economy’s resuscitation agenda diminishes. 

After running down every profitable organization bequeathed to it by the NDC’s  administration, including GNPC, NIB, ADB, BOG, and practically every sector, except the propaganda sector, the government continue to pursue the same poorly crafted policies that brought our economy to its knees. Strangely, even with the presence of IMF in town, the “borrow and spend” madness of Ofori-Attah has persisted. 

Obviously, the government has not only run out of operational current, but ideas to restore basic economic sanity. Whiles the promised fiscal consolidation is poorly pursued; the tower of the land of debt sustainability is not yet in sight; and the macroeconomic stability badly needed is like candle in the wind. In the midst of all these failures, the government’s addiction to borrowing lingers. 

So, what then  is IMF doing in Ghana? Have they come to praise our failed leaders or bury them? So, the IMF’s bosses, who are heaping praises on our failed leaders should know that until the prices of Kenkey, Acheke, and Pito is at the reach of an Average Kwame’s pocket, they will not be taken serious by Ghanaians who are hurting daily. 

The fact is that after Bawumia and Ken Ofori-Attah led us to chalk all the damming downgrades and over-crowding of the borrowing space, they failed to learn that Ghana cannot borrow its way out of the current debt quagmire. 

The simple truth, which is not difficult to tell is that, the pursuance of Direct Collateralized Future Receipts Arrangement (CFR) at the time of debt crisis is not a great idea as IMF allowed Ofori Attah to do. This is because if future earnings are below targets, the debt crisis could escalate.

 Also, depending on clauses in the agreement interest on loans may increase if it is not a fixed one. Although, it may provide some short-term benefits and relief with the inflow that will come with it, in the long-term it will increase Ghana’s debt stock, which is already cruising towards whopping GH 600 billion. 

The typical reminiscence of these collateralizations is when Kofi Donsu,a hunter takes Davi’s money to enjoy Bubura and promised to give her Akratea after hunting expedition on Friday.

 Imagine what will happen if Kofi could not produce any catch on Friday. It is also reminiscent of taking a secured credit card. Lenders love these arrangements because they are exposed to minimal risk of default. Technically, any government that finds comfort in contracting collateralized loans to service debts is perceived in the capital market to have crossed indebtedness red line.

Such arrangements are also very costly and fraught with more risks to the borrowers than to the lenders from market perspective. Moreover, it could shift the debt crisis management burden to the NDC’s government in 2025, depending on the content of the agreement. 

From the history of our economic managers, we are afraid that in the negotiations they may be hearkening on fees and commissions they will benefit from instead of the provisions that protect our national interest. 

On the other hand, Direct CFR could prove beneficial to an economy if the loans receipts are invested in productive ventures with short term economic stimulating effects. 

But it could be a smack of prudence if it is used to service debts of the energy sector as the government seeks to accomplish. So when will the government rather focus on fiscal consolidation; cutting down needless recurrent expenditures; invest in agriculture to ease galloping food inflation and grow the real incomes of citizens to stimulate economic growth; and stop the economic“bleeding” of Ghanaians? 

When previous collateralization and refinance of debts have already contributed significantly to the erosion of investor confidence, why should we condone its continuation? 

The government has also used these loan arrangements to hide national debts as in the case of Bawumia’s Bauxite Barter with Chinese. Similarly, the government wanted to use this template for Agyapa, which could not pass parliamentary scrutiny. 

Although, to some extent the Direct CFR can allow the government to re-establish creditworthiness and gain access to the capital market to resume borrowing.

 But this move could provide an indication to 

the capital market that we have exhausted our borrowing space ever. In this case it will be difficult to secure unsecured loans. 

But to whose benefit is the government attempting to borrow more, when the country is already chocking with debt to GDP ratio of 98.72%, which is worse than that of the 10 poorest countries on Earth? 

In our comparative assessment what we noticed is that Ghana is following the footsteps of Sri Lanka. Whiles Ghana’s GDP to debt ratio is 98.72%, that of Sri Lanka is 103%. Ghana is carrying huge energy sector debt as well as dwindled reserves and so was Sri Lanka.

 Sri Lanka’s crisis reached its climax with shortage of everything and escalation of  perennial strikes and Ghana is developing similar symptoms. 

At this stage of our debt crisis, we believe Ghana’s loan absorptive capacity has diminished significantly, making contracting new loans counter productive. After we exhaust assets and earnings that can be

collateralized, what next? Therefore, there is the need for effective fiscal consolidation, especially improving revenue mobilization and cutting down waste. 

 It does not sound right that  whiles the government’s reckless management has led our economy to be admitted into IMF’s “Intensive Care unit,” policies currently pursued by Bawumia and Ofori Attah are still fuzzy and getting us into deeper crisis. 

As citizens of Ghana, we are increasingly becoming frustrated with these annoying high profile collaterizations. The most annoying part is that upon all the funds we received, including loan of $600 million from IMF, our economy is in the same museum as that of Sri Lanka. 

For most part debt is not bad, but when an economy is laced with debt to GDP ratio of 98.72%; inflation at 42%; food inflation gallops at 61%; growth stunted at 1.5%; marginal foreign exchange reserves; multiple downgrades; crumbling infrastructure; and above all managed by Bawumia and Ofori-Attah, you cannot find romance with more debts.

 Under this government, debt has become our lethal injection. This is unlike  President Mahama’s government which used such loans to provide both social and economic infrastructure for current and future generations. 

Since this impending collateralization without parliamentary approval issue became known, it is hypocritical that the Energy Minister, Mathew Prempeh has the audacity to pontificate the minority on why parliamentary approval has not been sought for the transaction. 

Has he forgotten that during the NDC’s administration he with Samuel Atta Akyea and late Dr. Osei Akoto tried to use a Court injunction to disrupt a US$400 million loan agreement between GNPC and ENI for lack of parliamentary approval? So why is it now true that “What is good for the Goose is not good for the Gander, because Gander is NPP.”

The president and Energy Minister, Mathew Prempeh should know that Karma has no GPS, but knows everybody’s address. Just as they thought it was illegal during NDC’s administration to contract loans without parliamentary approval that belief and standard should still be relevant.

Whiles we call on the government to cancel the deal in the interest of our nation, we want to commend the minority in parliament for their principled stand against the move.

We also humbly call on Ghanaians to please elect JOHN MAHAMA and the NDC for the Change We Want. Let us work together to let the eight break the NPP’s government before it breaks our country and turn it into Sri Lanka.

God Bless Our Homeland Ghana.

Dr. Justice Salifu 

Signed For 

Research and Policy Analysis Desk of NDC Proforum North America