Debates of 13 Mar 2019

MR SPEAKER
PRAYERS 10 a.m.
VOTES AND PROCEEDINGS AND THE OFFICIAL REPORT 10 a.m.
Mr Speaker 10 a.m.
Hon Members, item numbered 2, correction of Votes and Proceedings of Tuesday, 12th February,
2019.
Page 1…50 --
rose
Mr Speaker 10 a.m.
Yes, Hon Member.
Dr Yeboah 10 a.m.
Mr Speaker, on page 49, item 3, we said that the amendment proposed should be a new clause and the draftsperson should relocate the subclauses. In the Order Paper, it appeared as a cluase 42 but it cannot be clause 42.
The draftsperson should relocate it appropriately. It is captured here as clause 42 but that was what was on the Order Paper which you directed that the draftsperson relocates appropriately. So we should take note of that.
Mr Haruna Iddrisu 10 a.m.
Mr Speaker, I recall Mr Second Deputy Speaker specifically asked him about those advertised on page 42, and what he stated remains as what transpired.
Thank you, Mr Speaker.
Mr Speaker 10:10 a.m.
Hon Chairman, any difficulty?
Dr Assibey-Yeboah 10:10 a.m.
Mr Speaker, the Hon Minority Leader just said that he recalls the “Hon Second Deputy Speaker…”, but it was rather the Rt Hon Speaker himself.
Mr Speaker 10:10 a.m.
Hon Member, the essence of the matter is that he agrees with you.
Thank you very much.
Mr Iddrisu 10:10 a.m.
Mr Speaker, on page 50, as you may recall, I made an amendment for us to add “regulations”, so that clause 41(1) would be captured as: “the Bank of Ghana shall for the purposes of regulation and supervision…” and there was a favourable decision to that.
Mr Speaker, the Hansard Department should withdraw my reference to the Hon Second Deputy Speaker. It was indeed the Rt Hon Speaker who presided.
Thank you, Mr Speaker.
Mr Speaker 10:10 a.m.
Thank you very much.
Hon Chairman of the Committee, I am sure that you are agreeable.
Very well, the amendment would be carried out.
Mr Speaker 10:10 a.m.
Hon Members, the Votes and Proceedings of Friday, 12th March, 2019, as corrected is hereby admitted as the true record of the proceedings.
Hon Members, we have the Official Report of --
[Pause] --
Hon Members, we would suspend Sitting till 12.00 noon. The Hon Minister
for Finance should indicate to us whether he would be available to answer Questions.
Mr Speaker 10:10 a.m.
Hon Members, order! We are on the correction of the Official Report.
Mr Speaker 10:10 a.m.
Item listed 3 -- Questions. Hon Minister for Finance, if you may
take the appropriate seat.
ORAL ANSWERS TO QUESTIONS 10:10 a.m.
MINISTRY OF FINANCE 10:10 a.m.
Minister for Finance (Mr Ken Ofori- Atta) 10:10 a.m.
Mr Speaker, regarding the amount paid on every GH¢100 transaction on Mobile Money transfer, every withdrawal charge is typically 1 per cent of the amount. Charges for sending money to a beneficiary on same network is 1 per cent and sending money to a beneficiary on another network or to a bank account is 1.5 per cent via the Mobile Money Interoperability system. In both instances, the beneficiary is charged a 1 per cent fee at the point of withdrawal. Also transactions where charges apply and exceed GH¢1,000 are capped at GH¢10.
Mr Speaker, alternatively, if cash is deposited with the Mobile Money Agent or in a bank to be transferred to a mobile money customer's wallet, no fee is charged for initiating this transaction. The beneficiary is however, charged a fee at the point of withdrawal.
Mr Speaker, for transfers from Mobile Money wallets to bank accounts and vice versa, the transaction costs of mostly 1.5 per cent of the amount transferred applies. This is also capped at GH¢10 for transactions exceeding GH¢1,000. However, bilateral arrangements between certain Telecommunications networks (Telcos) and banks have made it possible for no charges on transfers from the bank account to mobile money wallet and vice versa.
Mr Speaker, the value of mobile money transactions has grown rapidly from GH¢ 594m to GH¢2.2bn over the past five years. This is a sector that is increasingly impacting positively the lives of our citizens and Government will work to ensure that fellow Ghanaians enjoy the full benefits of this platform.
Mr Speaker 10:10 a.m.
Thank you very much, Hon Minister. We would have one supplementary question from the owner of the Question and one from each Side of the House. We all know what the time situation is now.
Hon Member, you may ask one supplementary question, if you want.
Mr Gyato 10:10 a.m.
Mr Speaker, per the Hon Minister's Answer to the Question, it looks as if beyond GH¢1,000, there is a cap where one cannot be charged extra, but the agents actually charge, regardless of the amount that one deposits or withdraws.
May I ask the Hon Minister if he could use this medium to educate the populace on their rights regarding the capping he mentioned in his Answer?
Mr Ofori-Atta 10:10 a.m.
Mr Speaker, I believe
that is an important question. As I mentioned, there has been an incredible increase in the value from GH¢594 million in 2013 to GH¢223 billion last year. The number of agents also increased from 5,900 to 184,000 and the accounts have increased from 345,000 to 13,000,000. The float has also increased from GH¢19 million to GH¢2.6 billion.
The question then really is, with this volume, should the charges be managed in a way? The issue of education is important. We need to do more to ensure this happens.
Mr Speaker, with the new payment systems coming up, it will be much easier for some amount of regulation to make sure that prudence and compliance occur. As the volumes increase, the hope is that charges would also reduce.
Mr Speaker 10:10 a.m.
Thank you very much. We would move on.
Question 493 -- Hon Member for Bolgatanga Central.
Amount Paid by GoG to GCB Bank for the Takeover of selected assets and liabilities of UT and Capital Banks.
Mr Isaac Adongo (NDC -- Bolgatanga Central) asked the Minister for Finance how much the Government of Ghana (Bank of Ghana) has paid to GCB Bank for the takeover of selected assets and liabilities of UT and Capital Banks, giving full details of terms and conditions of any instrument used for the payments.
Mr Ofori-Atta 10:10 a.m.
Mr Speaker, on the 14th August, 2017, the takeover occurred. Mr Speaker, on the amount paid to GCB on the takeover of selected assets, the Government of Ghana issued two separate bond certificates (A&B) with a face value of GH¢1,600,284,292.18 and GH¢2, 201, 280,634.00 and maturity dates of 31st December, 2017 and 31st December, 2027, respectively.
Mr Speaker, the terms and conditions of bonds A&B are as follows 10:10 a.m.
1. 57 p. m.
Mr I. Adongo 10:10 a.m.
Mr Speaker, the two figures put together give us about GH¢3.8 billion for the GCB takeover of the two banks.
Mr Speaker, in asking my supple- mentary question, I would like to go back to the 2019 Budget Statement submitted by the Hon Minister for Finance. On page 8, paragraph 30, the Hon Minister reports the entire cost of the seven banks, which includes the two banks at the GH¢9.9 billion, but the Hon Minister, in paragraph 31 reports GH¢7.6 billion as the cost of only the five banks.
Therefore, if I add the GH¢3.8 billion he has just reported for the two banks to the GH¢7.6 billion for the other two banks, I should be getting GH¢9.9 billion.
Mr Speaker, when I add GH¢3.8 billion to GH¢7.6 billion, I get GH¢11.4 billion. My question is, did he under-report the true cost of the takeover of these banks given the numbers that he is giving to me now?
Mr Ofori-Atta 10:10 a.m.
Mr Speaker, I would like to assure the Hon Member that our Party does not do such things. Mr Speaker, we did mention that Bond A had a maturity date of 31st December, 2017, that it was rolled into the Bond B, so it is not an addition. Inclusive with Bond B is that number. [Hear! Hear!]--
Mr I. Adongo 10:10 a.m.
Mr Speaker, in the Answer given by the Hon Minister, he identified Bond A and Bond B but did not say that Bond A and Bond B have a relationship and they stand separately with separate face values with separate terms and conditions, and therefore, represent a totality of the two, is that correct? And when I add them, I get GH¢3.8billion. If that is correct, then,
GH¢9.9billion is under-reported by GH¢1.5 billion.
My question is, did he capture the entire GH¢11.4 billion in his fiscals as per the Report that he presented to Parliament? It cannot be because the figures are different. -- [Interruption] -
- 10:10 a.m.
Mr Speaker 10:10 a.m.
Order! There is only one Hon Minister for Finance in the House.
Hon Minister?
Mr Ofori-Atta 10:10 a.m.
Mr Speaker, I thought I had explained fully that Bond A, in effect, was extinguished. So the issue of GH¢11billion does not come in. Bond A was fully extinguished and rolled into Bond B. So that is the number and we therefore did not under- report. -- [Hear! Hear!] --
Mr Speaker 10:10 a.m.
Question number 534, Hon Member for Bolgatanga Central?
Filling of Audited Financial Statements by GBC with BOG and
GSE as at 21/05/2018.
Q. 534. Mr Isaac Adongo (Bolgatanga Central) asked the Minister for Finance why the GCB Bank has not filed its audited financial statements with the Bank of Ghana and the Ghana Stock Exchange as at 21/05/2018.
Mr Ofori-Atta 10:10 a.m.
Mr Speaker, on the audited financial statement to the Bank of Ghana (BoG) and the Ghana Stock Exchange, GCB Bank requested an extension of the submission deadline from 31st March, 2018 to 31st April, 2018, explaining that they had challenges integrating their core banking application with that of the defunct UT and Capital banks.
Mr Speaker, the BoG however requested that GCB seek a No-Objection from the Securities and Exchange Commission (SEC) through the Ghana
Bond A
- Face value : GH¢1,600, 284,292.18
- Interest rate (%) : 18.25
- Issue date : 14/08/2017
- Maturity Date : 31/12/2017
Bond B
- Face value : GH¢2, 201,280,634.00
- Interest rate (%) : 12
- Issue date : 01/01/2018
- Maturity date : 31/12/2027
Payments of the principal and interests are done semi-annually.
Mr Speaker 10:10 a.m.
Your final supplementary question.
Mr I. Adongo 10:10 a.m.
Mr Speaker, I would like to confirm from the Hon Minister if GCB was in breach of filling its reports on two consecutive occasions; one on 31 st December, 2018, and two, on an extension to April but they still failed and filed in May. Is the Hon Minister confirming that on two consecutive occasions, GCB breached that condition?
Mr Ofori-Atta 10:10 a.m.
Mr Speaker, thank you very much. In actual fact, GCB was expected to file their returns with SEC by end of 28th February, 2018 and to the Bank of Ghana by 31st March, 2018. Then, they were given the chance to report in April and they could not make it. Therefore, they were fined.
The penalty is really not that huge, I think it is about GH¢6,000 from Bank of Ghana, and maybe, GH¢3,000 from the SEC. But the issue for the listed companies really is one of reputation, so it was not a good thing for that to happen. However, given the exercise that we were all aware of, I think there was a good reason for that.
But let me assure the Hon Member that his concerns are well taken. Actually, since August when this transaction happened, GCB's employment has increased from some 2500 to 3100; their balance sheet size has increased from GH¢9.6 billion to GH¢10.6 billion; profits increased from about GH¢330 million to GH¢440 million and the branch network has increased from 160 to 183. So I think GCB is in a stronger position than it was;
our shareholding, as you know, is about 21 per cent, with SSNIT around 29 per cent. So we are very interested in ensuring that GCB does well. I think it is a much stronger bank than it was in August of that year.
Thank you, Mr Speaker.
Mr Speaker 10:10 a.m.
Thank you, very much.
Question 535 stands in the name of the Hon Member for Adaklu.
Effects of the Introduction of Paperless Port
Q. 535. Mr Kwame G. Abgodza (NDC -- Adaklu) asked the Minister for Finance whether the introduction of the “paperless port” had increased the cost of doing business at the ports.
Mr Ken Ofori-Atta 2:07 a.m.
Mr Speaker, that was an interesting Question and even though we thought that the Ministry of Trade and Industry should deal with port facilitation issues, we took a crack at it.
Mr Speaker, the introduction of the ‘Paperless Port has not increased the cost of doing business at the ports but has rather decreased the cost drastically.
Mr Speaker, it would be recalled that Ghana started the implementation of Paperless Clearing System on September 1, 2017, to speed up the process of clearing goods at the ports from two weeks to four hours, and ensure order at the ports, while blocking loopholes in customs revenue.
The Paperless System is also to ensure that Ghana's ports compete favourably with other ports in the sub-region, help reduce cost of doing business in the private sector and generate adequate revenue to support the developmental agenda of the Government. The policy is
also aimed at improving the clearance procedures at the Ports of Ghana by eliminating delays. This is to improve port efficiency for accelerated national development.
The Ministry of Finance, in colla- boration with the Ghana Revenue Authority (GRA), the Ghana Ports and Harbours Authority and the Ghana Freight Forwarders Association, conducted comparative analysis on the cost of doing business in pre and post paperless regime at the ports. The results showed that cost components of doing business at the port have reduced from seven to three cost components, and this subsequently has reduced the total costs from GH¢ 1,280 to
GH¢320.
This means that the Paperless System reduced cost of doing business at the ports by GH¢960, representing 75 per cent. Hence, importers are now making savings of 75 per cent as a result of the implementation of the paperless System.
The following accounted for the cost of doing business at the port before the Paperless System:
1. Cost of obtaining CCVR,
2. Compliance,
3. Regulatory Agencies,
4. Shipping line demurrage,
5. GHPA rent/ Overstayed,
6. Printing of declarations,
7. Miscellaneous.
Cost after the implementation of the Paperless System
1. Cost of obtaining CCVR,
2. Regulatory Agencies.
3. Miscellaneous.
Mr Speaker, other benefits emanating from the introduction of the Paperless Port System so far are as follows;

1. reduced the release timeline for documents. The average dwell- time, that is, how long it takes for a container to be picked at the terminal after being unloaded from a vessel has also reduced to 11 days, from 16 to 22 days previously;

2. improved clearance processes as importers and agents are able to receive Customs Classification Valuation Reports (CCVR) within 24 hours compared to previous timeframe of three (3) days;

3. effective joint inspections as the number of regulatory agencies that carry out inspection at the ports have been reduced from 13 to 3.

4. submission of manifests five (5) days prior to vessel arrival instead of the previous three (3) days; this procedure allows customs enough time to undertake risk management and other internal background checks.
Mr Agbodza 2:07 a.m.
Mr Speaker, this is a public interest Question. The Hon Minister's Answer suggests that the cost of doing business at the port had rather reduced. He is aware that a special import levy was supposed to expire in 2016 but has been extended to the end of this year. This is an additional cost at the port.
You would also notice that in 2017, the African Union tax slapped another 0.3 per cent on duties. In recent times, the Hon Minister adjusted the Ghana Education Trust Fund (GETFund) and National Health Insurance Scheme (NHIS) levies to a straight tax which is basically adding five per cent, which all add up to the cost of doing business with importers.
Mr Speaker, my question is, if the Hon Minister says that the cost of doing business has actually decreased, how come on 23rd November, 2017, Joy FM reported that the Ghana Ports and Harbours Authority was asking the Ghana Revenue Authority to investigate the allegation of exorbitant fees at the port?
Secondly, on the 9th of June, 2018, Ghana News Agency (GNA) reported that a significant businessman Mr Charanjit Sethi said that 50 per cent of the cost of building materials on the market is as a result of the cost of doing business at the port.

Mr Speaker, I said that it was a public interest Question I was asking. What matters to Ghanaians is that the cost of doing business has either increased or decreased as a result of this. So all I wanted to find out on behalf of the people of this country is whether the cost of doing business has either increased or decreased as a result of this.

All I wanted to find out on behalf of the people of this country is whether the cost of doing business at the Port, between 2016 and today has either increased or decreased. I am sure the Hon Minister for Finance could give a clear answer to that.
rose
Mr Speaker 2:07 a.m.
Hon Majority Learder, do you have any -- ?
Mr Kyei-Mensah-Bonsu 2:07 a.m.
Mr Speaker, first of all, there are rules related to how Questions should be asked in this House.
Mr Kyei-Mensah-Bonsu 2:07 a.m.
My Hon Colleague got up and argued his case. Questions must comply with the following conditions, as in Standing Order
67:
“(b) a Question shall not contain any arguments, expression of opinion, inferences, imputations…”.

Mr Speaker, could you direct Hon Fifi Kwetey to listen to me. The rules are clear. We do not just get up and begin to argue our case. In any event, anybody could ask, between 1960 and 2000 -- [Interruption.] He says he did not ask about 1960. Why would they not compare 1960 figures with figures from the 2000s? This is because the conditions are completely different.

In any event, in the first paragraph of the Answer the Hon Minister gave us, clearly, he has provided the answer. This is an official publication now, which exists and he has it. Why should he ask another question? Before the Question was asked, it was like a thesis which offends our rules. The rules that I quoted exist in an official publication as Standing Order 67(1)(b) and (h).
Mr Ofori-Atta 2:17 p.m.
Mr Speaker, I was under the impression that the Hon Member wanted to know whether the paperless model is working and is helpful. It has created efficiency and reduced time and cost, and we answered that fully.
So, in using the paperless system, we are very clear about the gains that we have achieved so far, which have certainly resulted in efficiencies, cost reduction and savings in time.
Mr Speaker, we are doing some comparative analysis work on our ports across the region and also determining the cost because we have also heard the outcry about cost. That is being examined to see how we could bring appropriate resolutions to that.
Mr Speaker 2:17 p.m.
Hon Minister, has the cost of business come down?
Mr Ofori-Atta 2:17 p.m.
Mr Speaker, the cost of doing business through the paperless system has come down drastically.
Mr Speaker 2:17 p.m.
Thank you very much.
Mr Edward A. Bawa 2:17 p.m.
Mr Speaker, I can see that there have been some comparisons betweeen before paperless and after paperless, but there have been increases and extensions within the period of the import levy, some taxes for instance, has been extended.
Mr Speaker, I would want to ask the Hon Minister how he would reconcile the addition of cost with the fact that cost has been reduced at the port? [Interruption] -- You are not the Hon Minister for Finance.
Mr Kyei-Mensah-Bonsu 2:17 p.m.
Mr Speaker, respectfully, my Hon Colleague said I should not rise because I am not the Hon Minister for Finance. I am not, but I am in charge of Government Business in the Chamber. [Hear! Hear!]
.
Mr Speaker, again, the question my Hon Colleague asked infringes Standing Order 69(1). The Question is about “paperless transactions''. He should apply himself to that and not introduce any other new method. He should read Standing Order 69(1) and educate himself before he asks a question.
Mr Iddrisu 2:17 p.m.
Mr Speaker, I listened to
the Hon Minister when he responded to the Question which was asked by Hon Agbodza. The time and transaction cost for clearance of goods are a measure of ease of doing business. I would want to know from the Hon Minister the maximum time spent at the port now, for the clearing of goods.
Mr Kyei-Mensah-Bonsu 2:17 p.m.
Mr Speaker, respectfully, the question that my Hon Colleague has asked really relates to his own antecedent. This question should be properly directed to the Hon Minister for Trade and Industry and not the Hon Minister for Finance and he knows that. [Laughter.]
Mr Speaker 2:17 p.m.
Hon Minister, the money comes to you -- [Laughter] --
Whether the Hon Minister for Trade and Industry superintends, you are the keeper of the purse. Please, just tell us, irrespective of the cost, is it the same?
Mr Ofori-Atta 2:17 p.m.
Mr Speaker, I could come back to this, but I certainly know, as the Hon Minority Leader knows, that it has really come down to somewhere around four days as opposed to the extended time that we had.
Mr Speaker 2:17 p.m.
Hon Minister, thank you very much for attending to the House and answering our Questions. You are discharged.
At the Commencement of Public Business -- Presentation of Papers.
Item numbered 5 -- By the Hon Chairman of the Committee.
Mr Speaker 2:17 p.m.
Item numbered 6, Presentation and First Reading of Bills.
Mr Speaker 2:17 p.m.
Hon Majority Leader, are we proceeding?
Mr Kyei-Mensah-Bonsu 2:17 p.m.
Mr Speaker, we would go to the Order Paper Addendum, which has to do with the First Reading of the Ghana Iron and Steel Development Corporation Bill, 2019.
Mr Speaker 2:17 p.m.
Hon Member, Presenta- tion and First Reading of Bills.
Hon Minister for Lands and Natural Resources?
Mr Kyei-Mensah-Bonsu 2:17 p.m.
Mr Speaker, the Hon Minister for Lands and Natural Resources is not available, but he has sent the Hon Deputy Minister to do so on his behalf.
BILLS -- FIRST READING 2:17 p.m.
Mr Kyei-Mensah-Bonsu 2:17 p.m.
Mr Speaker, it is the Committee on Lands and Forestry. We have not changed the nomenclature yet.
Mr Speaker 2:27 p.m.
Very well. It has been referred to the Committee on Lands and Forestry.
Mr Speaker 2:27 p.m.
Presentation of Papers -- By the Hon Minister for Finance -- The Public Financial Management Regula- tions.
Mr Kyei-Mensah-Bonsu 2:27 p.m.
Mr Speaker, we can take the second Order Paper Addendum.
PAPERS 2:27 p.m.
Mr Speaker 2:27 p.m.
Any joint referrals? Referred to the Finance Committee and
Committee on Mines.
Hon Majority Leader, let us make progress. Time is of the essence.
Hon Members, item listed —
Hon Majority Leader, both Addenda have been done.
Mr Kyei-Mensah-Bonsu 2:27 p.m.
Mr Speaker, we would deal with item numbered 11 —
Mr Speaker 2:27 p.m.
Hon Members, item numbered 11— Procedural Motion. [Pause.]
Mr Kyei-Mensah-Bonsu 2:27 p.m.
Mr Speaker, I just want to be very clear on the committee you made the referral on the Order Paper Addendum 2. I think it should be the Subsidiary Legislation Committee.
Mr Speaker 2:27 p.m.
Hon Majority Leader, which committees do you want that to be referred to?
Mr Kyei-Mensah-Bonsu 2:27 p.m.
Mr Speaker, it is Regulations so it should go to the Subsidiary Legislation Committee but they may want to invite the leadership of the Finance Committee to join them.
Mr Speaker 2:27 p.m.
Hon Majority Leader, at this stage, I would simply refer it to the Subsidiary Legislation Committee. As for those other administrative matters -- please proceed accordingly and let us make progress.
Mr Kyei-Mensah-Bonsu 2:27 p.m.
Mr Speaker, we can begin with item numbered 14.
Mr Speaker 2:27 p.m.
Hon Members, item numbered 14 — Motion.
Chairman of the Committee (Dr Mark Assibey-Yeboah) 2:27 p.m.
Mr Speaker, I beg to move, that notwithstanding the provisions of Standing Order 80(1) which requires that no Motion shall be debated until at least forty-eight hours have elapsed between the date on which notice of the Motion is given and the date on which the Motion is moved, the Motion for the adoption of the Report of the Finance Committee on the Syndicated Bridge Loan Facility Agreement between the Government of the Republic of Ghana and Standard Chartered Bank, United Kingdom and the Standard Bank of South Africa Limited for an amount of seven hundred and fifty million United States dollars (US$750, 000,000) to fund or refinance various infrastructural development projects and for liability management in Ghana as approved in Ghana's 2019 Budget may be moved today.
Mr Speaker 2:27 p.m.
Any seconder?
Mr Isaac Adongo (NDC — Bolgatanga Central) 2:27 p.m.
Mr Speaker, I beg to second the Motion.
Question put and Motion agreed to.
MOTIONS 2:27 p.m.
Chairman of the Committee (Dr Mark Assibey-Yeboah) 2:27 p.m.
Mr Speaker, I beg to move, that this Honourable House adopts the Report of the Finance Committee on the Syndicated Bridge Loan Facility Agreement between the Government of the Republic of Ghana and Standard Chartered Bank, United Kingdom and the Standard Bank of South Africa Limited for an amount of seven hundred and fifty million United States dollars (US$750, 000,000) to fund or refinance various infrastructural development projects and for liability management in Ghana as approved in Ghana's 2019 Budget.
Mr Speaker, the Syndicated Bridge Loan Facility Agreement between the Government of the Republic of Ghana and Standard Chartered Bank, United Kingdom and the Standard Bank of South Africa Limited for an amount of seven hundred and fifty million United States dollars (US$750,000,000) to fund or refinance various infrastructural development projects and for liability management in Ghana as approved in Ghana's 2019 Budget was laid in the House on Friday 8th March, 2019.
Pursuant to article 103 of the 1992 Constitution and Orders 169 and 171 of the Standing Orders of the House, the Request was referred to the Committee on Finance for consideration and report.
The Committee subsequently met and discussed the Agreement with the Deputy Ministers for Finance, Hon Kwaku Kwarteng and Hon Abena Osei-Asare as well as officials from the Ministry of Finance and hereby submits this Report to the House.
The Committee is grateful to the Hon Deputy Ministers for Finance, and the officials from the Ministry of Finance for attending upon the Committee.
Reference
The Committee referred to and was guided by the following documents inter alia during its deliberations on the Agreement:
The 1992 Constitution of the Republic of Ghana;
The Standing Orders of the Parliament of Ghana;
The Public Financial Management Act of 2016 (Act 921);
The Budget Statement and Econo- mic Policy of the Government of Ghana for the 2019 Financial Year.
Parliamentary Resolution for the 2019 Sovereign Bond Issuance Programme.
Background
Hon Members of Parliament may recall that as stated in the 2019 Budget Statement and Economic Policy and as approved by Parliament on 21st December, 2018, the Ministry of Finance is to raise up to US$3.00 billion from the International Capital Markets (ICM). The Budget also indicated Government's intention to
explore the possibility and feasibility of issuing one or a combination of the following debts:
Century bond,
Green bond,
Panda bond,
Samurai bond; and
Commercial loan.
Following the parliamentary approval, the Ministry of Finance appointed transaction advisors through the quality based procurement process. It was the first time that this process of engagement had been used instead of the restrictive tendering process.
Government expects that the road show for the Eurobond would be executed by the second week of March 2019.
While the necessary processes are ongoing for the 2019 bond issuance, Government is sourcing this bridge facility as an interim measure to help keep Government's economic programme for the year on track.
Terms of the Loan
The terms of the Facility are as follows:
Bridge Facility Amount : US$750 million.
Interest Rate : 1 Month US LIBOR plus a margin of 3.50 per cent p.a.
Tenor : up to 6 months.
Arrangement Fee : 0.32 per cent p.a.
Observations
Declining Offshore Capital Inflows
The Committee was informed that over the past few weeks, there have been declining capital inflows from offshore investors as well as increased rollover risks for maturing domestic bonds. These pressures have affected Government's domestic deficit financing and refinancing of outstanding debt securities. Due to these pressures, two (2) of the selected Advisors have proposed to provide this Government with the bridge loan facility in anticipation of issuance of the Sovereign Bond in a few weeks.
Repayment
As to how Government proposed to repay this loan facility, the Committee was informed that the loan has been consciously designed as a short term facility and is to be repaid with proceeds from the 2019 Sovereign Bond programme.
Use of proceeds
Consistent with the use of proceeds of the 2019 Sovereign Bond programme as approved by Parliament, the proceeds from the bridge financing would be applied as follows:
a. Finance critical infrastructure and Government's priority pro- grammes on growth; and
b. Conduct liability management on maturing domestic bonds.
For the avoidance of doubt, it is to be noted that the bridge facility is within the US$3.00 billion Sovereign Bond issuance programme for 2019 as approved by Parliament.
Consistency with Medium-Term Debt Strategy
The Committee noted that the intention to raise up to US$3.00 billlion from “the International Capital Markets (ICM) is aimed at financing critical capital infrastructure, growth-related expendi- tures and liability management. This is consistent with the Medium-Term Debt Strategy (MTDS) of Government to adequately finance the budget at least cost and prudent level of risk.
Exchange Rate Losses
Whether or not the Government was anticipating exchange rate losses in connection with the transaction, it was explained to the Committee that there would be no exchange rate losses since the lenders of the Bridge Facility would take the money back directly from the proceeds of the Eurobond issuance.
Conclusion
The Committee, having carefully scrutinised the Agreement, respectfully recommends to the House to adopt this Report and approve by Resolution, the Syndicated Bridge Loan Facility Agreement between the Government of the Republic of Ghana and Standard Chartered Bank, United Kingdom and the Standard Bank of South Africa Limited for an amount of seven hundred and fifty million United States dollars (US$750, 000,000.00) to fund or refinance various infrastructural development projects and for liability management in Ghana as approved in Ghana's 2019 Budget in accordance with article 181 of the 1992 Constitution of the Republic of Ghana.
Respectfully submitted.
Mr Isaac Adongo (NDC — Bolgatanga Central) 2:27 p.m.
Mr Speaker, I rise to support the Motion for this House to approve an amount of US$750 million as bridge finance that would enable the Government of Ghana to finance some of its expenditures in the Budget Statement.
Mr Speaker, in doing so, I would like to express my worry at the current trend, where we now have to seek short term financing of the Budget Statement when we have already approved US$3 billion of Eurobond that must be pursued.
We expect that the Ministry should pay attention to raising that US$3 billion Bond, but to come to the House now to say that while they are looking to raise the US$3 billion, they are facing challenges —
Dr A. A. Osei 2:27 p.m.
Mr Speaker, my good Friend, Hon Isaac Adongo, rose up and said he wants to support the Motion, but before he can support it, the Motion can be seconded so that we can debate on it. So I just want to bring his attention to it.
Mr I. Adongo 2:37 p.m.
Mr Speaker, I am seconding the Motion for him to go and raise money so I do not know why he is worried —? [Laughter.]
Mr Speaker, I second the Motion and in doing so, I wish to express my worry, which is that, when the Hon Minister was in this House asking us to give him the permission to raise US$3 billion of Eurobond, we gladly did so. But we are now being told that while they wait for the solution that would cure their ailment, they want to be taking painkillers. We expect the Ministry now to be going ahead to raise that US$3 billion Eurobond.
So what they have come to tell us now is to give them the opportunity to go and borrow short term for six months and hope that within that period, they would be able to raise the US$3 billion and repay.
Mr Speaker, if they are already facing challenges, who says that the challenges will go away in six months? In six months' time if they are still struggling to raise the Eurobond, what would happen to us? So I believe that the focus should be on dealing with the reasons we are where we are today.
Mr Speaker, investors' confidence in the Ghanaian economy is becoming very abysmal. In your Committee's own Report, paragraph 5.1 explains vividly the reason why we are in the situation we find ourselves. With your permission, I would like to read. It says:
“The Committee was informed that over the past few weeks, there have been declining capital inflows from offshore investors as well as increased rollover risks for maturing domestic bonds.”
Mr Speaker, investors are taking their moneys away from Ghana; that is exactly what this quotation from the Report is saying. The Report is saying that there are “rollover risks” -- “rollover risks” simply means that as the debts are maturing, we are not getting them to rollover and they are asking for their moneys to go away. So we must make the moneys available for them to take their moneys away.
Mr Speaker 2:37 p.m.
Hon Member, your definition of inflow is becoming very intriguing --
Mr I. Adongo 2:37 p.m.
Mr Speaker, the inflows are simply when Government is borrowing domestically. There are foreign investors
rose
Mr Speaker 2:37 p.m.
Yes, Hon Chairman of the Committee?
Dr Assibey-Yeboah 2:37 p.m.
Mr Speaker, the Hon Member is misleading the House.
When the Report says there has been declining capital inflows, yes, capital is not coming in.
Mr Speaker 2:37 p.m.
Hon Member, you have interpreted and the Chairman has given his counter interpretation. You would please proceed.
Mr I. Adongo 2:37 p.m.
Mr Speaker, I was heading exactly where my Colleague, the Chairman just indicated.
Mr Speaker, we are in a country where United States of America of all nations is increasing her interest rates but we sit here and keep announcing interest rates are coming down. The end effect is that we are not attractive and if we are not attractive, money would go where rates are attractive, and when the money is going away, the fiscal side --
Mr Speaker 2:37 p.m.
We are in an economics class now.
Hon Chairman of the Committee?
Dr Assibey-Yeboah 2:37 p.m.
Mr Speaker, when we debate in the House, I believe that there are people in the gallery and there are Ghanaians listening online. A while ago, he was saying there was lack of confidence in our economy for which reason we would have to go for this borrowing but is now agreeing with me that interest rates are going down and it is because -- [Uproar.]
Mr Speaker 2:37 p.m.
Hon Members, why a shouting match?
Dr Assibey-Yeboah 2:37 p.m.
Mr Speaker, so without doubt, the fundamentals are better now and interest rates are good.
Mr Speaker, but as regards this borrowing -- the borrowing was programmed in the Budget Statment, that US$3 billion, whether we like it or not, is a deficit that we would have to finance. This House has approved that we should borrow US$3 billion. In the interim, before we go on a road show and issue the bond, there is this bridge financing. As a matter of fact, this bridge financing is even way cheaper than what the Eurobond would cost.
Mr Speaker, apart from routine politics, nobody should oppose this loan facility. Why would he oppose this facility because the interest rate is about six per cent? The best Eurobond issuance we have received is about 7.2 per cent, so there is no way this issue is going to cost us anyway.
Mr Speaker 2:37 p.m.
Hon Isaac Adongo, you have the Floor.
rose
Mr Speaker 2:37 p.m.
Yes, Hon Minority Leader?
Mr Iddrisu 2:37 p.m.
Mr Speaker, I am compelled to be on my feet. This is the second time you have accommodated the Hon Chairman of the Finance Committee to needlessly interject the flow of --
Mr Speaker 2:37 p.m.
Hon Minority Leader, I am the determiner of whether it is needless or not. I would not allow you to stand in judgement over my ruling.
Hon Adongo, you would please continue.
Mr Iddrisu 2:37 p.m.
Mr Speaker, I am still on my feet.
Mr Speaker 2:37 p.m.
Hon Member, I do not want to insist you talk -- You would withdraw the word “needlessly”.
Mr I ddrisu 2:37 p.m.
Mr Speaker, I will withdraw “needlessly” but I still want an opportunity. He cannot be doing that. You have allowed him to interject the Hon Member twice; why?
Mr Speaker 2:37 p.m.
Hon Minority Leader, points of order can go two times --
Mr Iddrisu 2:37 p.m.
Mr Speaker, the Chairman must also respect the right of the Hon Isaac Adongo to speak. Why? He is Chairman of a Committee and he rose two times to interject and you are saying we should not question it?
rose
Mr Speaker 2:37 p.m.
Hon Minority Leader, you are becoming a judge.
Mr Iddrisu 2:37 p.m.
Yes, Mr Speaker, so I have withdrawn the word “needlessly”. That is the reason I said “I am compelled” --
Mr Speaker 2:37 p.m.
Hon Minority Leader, when you are patient, you would not need to be withdrawing. So be patient.
Mr Iddrisu 2:37 p.m.
Mr Speaker, I am patient.
Mr Speaker 2:37 p.m.
Order!
Hon Majority Leader, I saw you on your feet.
Mr Iddrisu 2:47 p.m.
Mr Speaker, I believe we should allow the debate to flow. The Chairman moved a Motion which was ably seconded and it is being supported. He is rising to interject and it naturally affects the flow of how people process their thoughts; that is the objection I am raising.
Particularly to the Chairman, for the second time, we would not let this pass. This is the House of debate. Just as I cannot pass judgement on what is needless, he cannot pass judgement that his argument is superior to that of the Hon Isaac Adongo; we would not accept that too.
Mr Speaker 2:47 p.m.
Hon Member, have you finished? [Laughter.]
Hon Majority Leader?
Mr Kyei-Mensah-Bonsu 2:47 p.m.
Mr Speaker,
I would join the Hon Minority Leader in pleading that the Hon Member on his feet be allowed to make his own intervention.
Mr Speaker, the Hon Chairman presented the Report of the Committee. If a portion of the Committee's Report is misunderstood or being misrepresented, he is covered by the rules to come by a point of elucidation or order to correct what the Hon Member is trying to do. He is covered by Standing Order 86(4), and I beg to quote:
(4) “No Member shall speak more than once to any Question except --
(b) in explanation, as prescribed in paragraph (5) of this Order; or “
(c) in the case of a mover of a substantive motion …”
Then finally, Standing Order 86(5) states and I beg to quote:
“A Member who has spoken to a Question may again be heard for the purpose of explaining some material part of his speech which has been misunderstood…”
Mr Speaker, in this case, he needs evidence that the Hon Member on his feet has misunderstood the Report of the Committee. So for as many times as he tries to misrepresent what is contained in the Report, for so many times would he be permitted under our rules to intervene.
That is exactly what Mr Speaker has done by recognising him. The Rt Hon Speaker has not offended any rules. If my Hon Member continues to misrepresent what is in the Report, for so long would he continue to be interjected and corrected appropriately.
In the meantime, I plead for him to conclude and we would listen to him.
Mr Speaker 2:47 p.m.
Hon Minority Leader?
Mr Iddrisu 2:47 p.m.
Mr Speaker, this is the Report. If the Hon Chairman has any specific reference, let him state it. The Hon Member for Bolgatanga Central was expressing his view on the same Report that has been submitted. [Interruption.]
Mr Speaker, I believe that for a country to borrow US$3.9 billion, it must be of interest to us. Therefore, we should be allowed to interrogate the issues. If this House permits the Hon Minister for Finance to borrow, he would borrow. Mr Speaker, but the flow of the debate -- I still believe that our Hon Colleague and Chairman should not encourage --
Other than that, any other time he rises, we would also rise on a point of order to interject. We are very capable of doing that and I am just serving notice, that if at any time they rise -- and if we have to
correct them on their Report, we will do so. It is their Report, and they should allow him to flow since they have every opportunity to -- they should rely on the same Standing Order to come back and debate the more.
Mr Speaker 2:47 p.m.
Contributions will flow, but opportunities will surely be granted when objections are raised. This will apply to both Sides of the House. [Hear! Hear!]
Hon Member, please continue.
Mr I. Adongo 2:47 p.m.
Mr Speaker, thank you very much.
I want to make the point that there are two types of interest rates. We have the policy rate from the monetary side and the fiscal rate from the Ministry of Finance when it borrows.
While the Bank of Ghana is reducing the policy rate, the Ministry of Finance is consistently increasing the fiscal rate. That is the reason their 91-day bill --
rose
Mr Speaker 2:47 p.m.
Dr A. A. Osei?
Mr I. Adongo 2:47 p.m.
That is why their 91 day bill --
Mr Speaker 2:47 p.m.
Order! Order! [Inter- ruption.] Hon Member, let us face it. Please, I want to assert my authority on this. The Hon Member is making arguments, and that is fine. However, if another Hon Member feels it is inaccurate in terms of the economics he propagates, that Hon Member is entitled to raise a point of order and I will allow it. Let us get that straight.
Now, he is making very interesting economic arguments; do you want to tell me he should not be contradicted if another person thinks otherwise?
Dr A. A. Osei, you have --
Dr A. A. Osei 2:47 p.m.
Mr Speaker, I would want to appeal to Hon Isaac Adongo, that this is a House of records; it is important that we know what we are talking about.
The Hon Minister for Finance does not impose fiscal rates; there is nothing like that, but that is what he said. The Ministry of Finance does nothing about interest rates; it is all done by the Bank of Ghana. So his statement is misleading this House, and he should withdraw. There is nothing like a fiscal rate of interest.
Mr Speaker 2:47 p.m.
Hon Isaac Adongo, did you say that or not?
Mr I. Adongo 2:47 p.m.
Mr Speaker, thank you very much. When the Government of Ghana is borrowing, the Ministry of Finance dictates the pricing guidelines --
Mr Speaker 2:47 p.m.
Dictates?
Mr I. Adongo 2:47 p.m.
Mr Speaker, it dictates because it is the Ministry of Finance that can determine how much it can pay as interest cost, and one cannot impose that on the Ministry of Finance. [Hear! Hear!]
So when the Ministry of Finance decides that 20 per cent is higher, it will tell the market that the pricing guidelines is only 19.5 per cent. If they want to do 20 per cent, the Ministry would not borrow because it cannot pay.
Mr Speaker, that is the reason the Ministry of Finance has control over the fiscal rate. As a result of that -- [Interruption.] So would one just give the Ministry of Finance a 30 per cent rate and
Mr I. Adongo 2:47 p.m.


it would accept it? It does not happen. The Hon Minister for Finance has an appetite for a certain interest rate, and would work towards achieving that in order to be prudent. Otherwise, there is no use in sitting there.

The Ministry's aim is to protect us from excessive interest rate, and they determine what they can pay. If they cannot pay, they decline to borrow if the interest rate is outside their reach. That is the reason the 91-day Treasury Bill rate originally decreased to 13.2 per cent; today, it is 14.8 per cent. How come the monetary policy rate is still coming down when the fiscal rate is going up?

So investors are running away from Government bonds. As a matter of fact --
rose
Mr Speaker 2:47 p.m.
Hon Member, just a moment. You are now coming to a conclusion on your own premise.
Hon Dr A. A. Osei? -- [Laughter.] I understand this thing very well, and I will handle it the way I know.
Dr A. A. Osei 2:47 p.m.
Mr Speaker, I am sorry I have to be upstanding again. This is very important for this House --
Mr Speaker 2:47 p.m.
We need to get the premise right before we come to a conclusion.
Dr A. A. Osei? [Interruption.] Order!
Dr A. A. Osei 2:47 p.m.
Mr Speaker, this has nothing to do with the Hon Minister for Finance. This is basic economics --
Mr Speaker 2:47 p.m.
Hon Members, now the shouting starts.
Dr A. A. Osei 2:47 p.m.
Mr Speaker, I wish Hon Members who are new in the House are prepared to learn; that is the only way we have learnt in this House, and we are still here.
It is important for Hon Members to know, if they do not, that there is nothing like the fiscal rate of interest. Secondly, the Hon Minister for Finance never dictates --
Mr Speaker, if we go to the borrowing market.
Mr Speaker 2:47 p.m.
Dr A. A. Osei, you may sit down again. When there is peace, we shall continue. [Pause.]
Dr A. A. Osei, you may continue.
Dr A. A. Osei 2:47 p.m.
Mr Speaker, I know that a lot of my Hon Colleagues here are relatively new, and not all of them may have read economics. I am volunteering free services. [Interruption.] The Hon Minority Leader, who is my student, knows why; he is quiet, but the rest are talking. [Laughter.]
Mr Speaker, I respect my good Hon Friend, Hon Isaac Adongo; but please, for the sake of our students, there is nothing like a fiscal rate of interest. I think that he should just move on and conclude.
The Ministry of Finance cannot dictate the interest rate; it negotiates interest rates just like when one goes to the bank and is given a rate -- one negotiates. The Ministry of Finance cannot dictate; that is not how the market works.
Thank you.
Mr Speaker 2:57 p.m.
The essence of this is that you may negotiate matters of interest rate, but Hon Dr A. A. Osei tells us that the Ministry of Finance has no determination power, and that is to be taken seriouly.
Mr I. Adongo 2:57 p.m.
Mr Speaker, one of the reasons that the government may not be willing to pay a very high interest rate is the fact that it needs to accommodate the interest rate that would accrue in the Budget Statement. As we speak today, our interest rate as budgeted for 2019 in the Budget --
Mr Speaker 2:57 p.m.
Hon Adongo, we have enough of our economics, so would you now speak to the Report and then we could conclude?
Mr I. Adongo 2:57 p.m.
Mr Speaker, in speaking to the Report, I alluded to the fact that we have challenges to raise money domes- tically because, in the words of the Hon Chairman, “the interest rates are unattractive”. If we want to make interest rates attractive, we would get people to buy the bonds and we would not need bridge financing.
However, the State would need to pay for that interest rate in the Budget Statement. As we speak today, in the Budget Statement, we have budgeted GH¢19 billion for interest cost, from GH¢11 billion in 2016.
Mr Speaker, we are adding close to US$2 billion to our interest cost in just two years. Therefore, there is no fiscal space in our Budget Statement to accommodate excessive interest rates which is the fiscal side of dealing with this matter.
Mr Speaker, today, if the Hon Minister for Finance is willing to pay a higher interest rate, then I could assure you that foreign investors would bring offshore
money. They would buy our bonds, and as a result of that we would have money to finance our Budget Statement. When the Bank of Ghana cuts policy rate, it does not influence the numbers that we put in our Budget Statement. Mr Speaker, the numbers we pay in our Budget Statement is the fiscal rate. If he is not aware, he may have to find out.
Mr Speaker, the truth is that when other countries that are challenged by the current economic circumstances globally are raising interest rates in order to attract the same investments, but we are not willing to attract the same investments, then the challenge we get is that we would now go for bridge finance. Mr Speaker, as a result of this bridge finance, the aim is essentially to deal with a major shortfall in domestic mobilisation of borrowing.
Mr Speaker, just for the months of January and February, the Government set out to borrow US$7.25 billion on the domestic market; but we only got US$3.5 billion, resulting in the shortfall of 52 per cent under-subscription, which is what this is supposed to cure. Mr Speaker, just use GH¢5 as equivalent to US$1 and multiply it by 375, and you would get exactly GH¢3.75 billion which is the shortfall that we have suffered in the last two months.
So this is not about the fact that we are waiting for Eurobond, but it is about the fact that we have a crisis on our hands that we must deal with on short-term measures. Mr Speaker, that is a clear sign of an economy that is struggling to mobilise resources to fund its Budget Statement. Mr Speaker, so when he comes here and pretends that it is about Eurobond, then the facts are simply not speaking to the numbers.
The numbers show that if we do not get this money in the next two months, then our economy would come to a
Mr I. Adongo 2:57 p.m.
standstill. That is the reason we are here, and not because the Eurobond has become a problem.
Mr Speaker, on this note, I would like to advise the Hon Minister for Finance to take steps to price appropriately for Government bonds in order that we would not follow this pattern of short-term painkillers that we are taking as a country. Mr Speaker, if a person is sick, he or she must go for a solution but not to take painkillers and expect it to be resolved.
Mr Speaker, with these few words, I beg to second the Motion.

Question proposed.
Mr Speaker 2:57 p.m.
Hon Members, I would take one contribution from each Side.
Dr Anthony A. Osei (NPP -- Old Tafo) 2:57 p.m.
Mr Speaker, I rise to support the Motion and in so doing, I would say a few words.
Mr Speaker, under normal circum- stances, I would have tried to go on the path of debunking my Hon Friend, Mr Isaac Adongo, but I would not do that to him today.
Mr Speaker, let us understand clearly that this House has already approved that the Hon Minister for Finance goes out to borrow US$2 billion for infrastructure and US$1 billion for liability management. Mr Speaker, we have done it, and the question now is what the Hon Minister is doing about that?
As I speak, the Hon Deputy Minister is on a road show to take steps to make sure that we borrow the US$3 billion, but in the interim, the budget programmes and
revenues are to be used in the first and second quarters as part of the US$2 billion infrastructural expen-diture.
So if we have not received the US$2 billion, then it makes common sense to borrow short-term to make sure that we do not delay in our infrastructural development.
Dr Assibey-Yeboah 2:57 p.m.
Mr Speaker, —
Mr Speaker 2:57 p.m.
Dr A. A. Osei, I have recognised you to continue.
Dr A. A. Osei 2:57 p.m.
Mr Speaker, thank you for coming to my aid.
If we are running a budget, then we have to be smart about how cash is managed. Hon Fifi Kwetey was in the Ministry of Finance, and he would tell us that this is common sense. Mr Speaker, so we ought to commence --
Mr Speaker 2:57 p.m.
Hon Member, withdraw that and let us proceed. Withdraw “common sense” with all of its insinuations.
Dr A. A. Osei 2:57 p.m.
Mr Speaker, it was used in a positive sense.
Mr Speaker 2:57 p.m.
Do not interpret it now. Just withdraw it. I know you are capable of construction and reconstruction. [Laughter.]
Dr A. A. Osei 2:57 p.m.
Mr Speaker, I withdraw.
Mr Speaker, I substitute it with the words that Hon Fifi Kwetey would gladly endorse this move because he had done it as an Hon Deputy Minister. This is common economic management if a person works in the Ministry of Finance.
Mr Speaker, what we should be looking out for is what is on page 4 -- at what rate are we borrowing?
Mr Speaker, my Hon Friend talked about domestic interest rates. This is external borrowing and, for the avoidance of doubt, I would repeat -- one month United States London Inter-bank Offered Rate (US LIBOR) plus a margin of 3.5 per cent. Mr Speaker, if we add the LIBOR, which would be 5.99 per cent for six months, it is a good rate.
As the Hon Chairman said, as soon as we raise the bonds, there would be no exchange rate loss because the people lending to us would take the moneys in dollars.
Mr Speaker, this is a straightforward matter to ensure that the development of Ghana would not have a lacuna, and this is what any Ministry of Finance should do. We ought to commend the Ministry of Finance for making this move, so that all the projects we want in our constituencies could go on.
Mr I. Adongo 2:57 p.m.
On a point of order. Mr Speaker, my Hon Colleague is misleading the House and he is creating the impression that the US$750 million is meant to finance infrastructure.
Mr Speaker, but we have been told that one of the reasons that we are dealing with this is to roll over risk because we do not
roll over infrastructure. We roll over debt that we have to refinance. When we refinance debt, it is not available to spend on infrastructure.
Mr Speaker, I just wanted to make that correction.
Dr A. A. Osei 2:57 p.m.
Mr Speaker, if he would read paragraph 5.3 -- he is a member of the Committee, and I saw him at the meeting, so he should know what paragraph 5.3 is saying. Mr Speaker, I beg to read:
“(a) Finance critical infrastructure and Government's priority programmes on growth and
(b) Conduct liability management on maturing domestic bonds”.
Mr Speaker, paragraph 5.3 says that, and he is a member of the Committee. I am surprised that he has forgotten so quickly.
Mr Speaker 2:57 p.m.
Hon Adongo, clearly, you are wrong.
Dr A. A. Osei, you may go on.
Dr A. A. Osei 3:07 p.m.
Mr Speaker, thank you for telling him that he is clearly wrong. I know that he normally reads the Report, but I do not know what happened to him.
Mr Speaker, it is important that we approve this facility, so that we do not go and harass the Hon Minister for Finance that the projects in our communities are not done because he needs this money to continue. After he borrows this US$750 million, by that time, they would have raised the balance on the bond, and it would be a continuous process. That is why he is doing it at this time.
Dr A. A. Osei 3:07 p.m.
2407GoG/Standard Charted Bank 13 March, 2019 Loan Facility Agreement 2408 2409 GoG/Standard Charted Bank 13 March, 2019 Loan Facility Agreement 2410

Mr Speaker, I would want to urge all my Hon Colleagues to take it as the decision they took to approve the bond, except that the cost is cheaper this time. So, they are endorsing a very good move by the Ministry of Finance.

With these few words, I urge all Hon Members to support the Motion overwhelmingly.
Mr Speaker 3:07 p.m.
And for the Minority?
Mr Fifi F. F. Kwetey (NDC - Ketu South) 3:07 p.m.
Thank you very much, Mr Speaker.
I wish to associate myself with the Motion and to say that, having a syndicated bridge loan facility is really nothing strange. Ordinarily, that should not really have raised issues at all. I think the problems our Hon Friends on the other Side face have to do with their own history.
It is about the history of having some superlative understanding of how economies are managed to the extent that when they were even preparing the Budget Statement, they already had a clear idea of what the exigencies along the lines would be.
For them to enter into almost the end of the first quarter and suddenly realise that they might have some head needs along the line, relating to the Eurobond facility, and to look for a bridge financing now is what the issue has been.
Mr Speaker 3:07 p.m.
Hon Member, I do not want to start naming anyone.
Mr Kwetey 3:07 p.m.
Thank you very much, Mr Speaker.
My Hon Chairman is trying very hard to intimidate me, but I refuse to be intimidated.
Mr Speaker, the main issue has to do with the fact that we should all learn to tone down a bit, especially, on the high promises that we make. When one promises to the effect that one would actually take us into a situation where we could literally raise almost all the moneys we needed domestically because one had a certain magic wand to find all these resources, but and one now comes --
As of the close of November last year, we talked about a total loan facilities of over US$53 billion, which is almost half of the total debts of Ghana. They are now going for more and, even going for bridge loan in difficult situation, it would naturally raise issues. I think some of those issues have to be brought up with the hope that, somehow, it helps all of us going forward.
We look forward to having a conversation in the future that does not have to be reminding us about some of the things we have promised but are clearly going against.
Thank you very much, Mr Speaker.
rose
Mr Speaker 3:07 p.m.
Hon Members, I said one Hon Member on each Side should be nominated by the Leaders.
Hon Members, shall we put the Question?
Question put and Motion agreed to.
Mr Speaker 3:07 p.m.
Item listed 16 -- Hon Minister for Finance, you may move for the adoption of the Resolution.
RESOLUTIONS 3:07 p.m.
Minister for Finance (Mr Ken Ofori- Atta) 3:07 p.m.
Mr Speaker, I beg to move, that
WHEREAS by the provisions of Article 181 of the Constitution and sections 55 and 56 of the Public Financial Management Act, 2016 (Act 921), the terms and conditions of all government borrowings shall be laid before Parliament and shall not come into operation unless the terms and conditions are approved by a resolution of Parliament in accordance with article 181 of the Constitution;
PURSUANT to the provisions of the said article 181 of the Constitu tion and sections 55 and 56 of the Public Financial Management Act of 2016 (Act 921), at the request of the Government of the Republic Ghana, acting through the Minister responsible for Finance, there has been laid before Parliament a Syndicated Bridge Loan Facility Agreement between the Govern- ment of the Republic of Ghana and Standard Chartered Bank, United Kingdom and the Standard Bank of
South Africa Limited for an amount of seven hundred and fifty million United States dollars (US$750, 000,000) to fund or refinance va- rious infrastructural development projects and for liability manage- ment in Ghana as approved in Ghana's 2019 Budget.
THIS HONOURABLE HOUSE 3:07 p.m.
Chairman of the Committee (Dr Mark Assibey-Yeboah) 3:07 p.m.
Mr Speaker, I beg to second the Motion.
Question put and Motion agreed to.
Resolved accordingly.
Mr Speaker 3:07 p.m.
Hon Majority Leader, where do we go from here?
Mr Kyei-Mensah-Bonsu 3:07 p.m.
Mr Speaker, we would go to item listed as 11.
MOTIONS 3:07 p.m.
Dr Anthony A. Osei 3:07 p.m.
Mr Speaker, I beg to second the Motion.
Question put and Motion agreed to.
Resolved accordingly.
Sovereign Guarantee in Favour of Ghana Amalgamated Trust Limited to Support Indigenous Ghanaian Banks
Chairman of the Committee (Dr Mark Assibey-Yeboah) 3:07 p.m.
Mr Speaker, I beg to move, that this Honourable House adopts the Report of the Finance Committee on the Request for the Issuance of a Sovereign Guarantee of up to GH¢2.0 Billion in favour of Ghana Amalgamated Trust (GAT) Limited to support indi- genous Ghanaian Banks.
Mr Speaker, in so doing, I present the Committee's Report.
Introduction
The Request for the Issuance of a Sovereign Guarantee of up to Two Billion Ghana Cedis (GH¢2.00 Billion) in favour
of Ghana Amalgamated Trust Limited (GAT) to Support Indigenous Ghanaian Banks was presented to the House on Tuesday 5th March, 2019.
Pursuant to article 103 of the 1992 Constitution and Orders 169 and 171 of the Standing Orders of the House, the request was referred to the Committee on Finance for Consideration and Report.
The Committee subsequently met and discussed the request with a Deputy Minister for Finance, Hon Charles Adu Boahen, a Deputy Governor of the Bank of Ghana, Mrs Elsie Addo Awadzi; as well as officials from the Ministry of Finance, the Bank of Ghana and the Ghana Amalgamated Trust Limited and hereby submits this report to the House.
The Committee is grateful to the Hon Deputy Minister for Finance, the Deputy Governor of the Central Bank and the officials from the Ministry of Finance, the Bank of Ghana and the Ghana Amalgamated Trust Limited for attending upon the Committee.
References
The Committee referred to and was guided by the following documents inter alia during its deliberations on the request:
The 1992 Constitution of the Republic of Ghana;
The Standing Orders of the Parliament of Ghana;
The Public Financial Management Act, 2016 (Act 921);
The Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
Background
Following the clean-up exercise for the banking industry by the Bank of Ghana at the end of December 2018, 28 banks met the new minimum paid-up capital requirement of GH¢400.00 million; 17 of these banks met the required capital through capitalisation of income surplus, fresh capital injection or a combination of both.
The increase in the minimum capital requirement was well intentioned as it was meant to restore confidence in the banking sector, rebound growth in industry assets as banks deploy new capital towards financial intermediation and to boost lending.
The new minimum capital requirement has, however, had the adverse unintended consequence of eliminating the indi- genous banks with less capacity to raise the required capital.
To prevent the decimation of indige- nous banks, Government has intervened by sponsoring the establishment of the Ghana Amalgamated Trust Limited (GAT) as a Special Purpose Vehicle (SPV) to help raise capital to support indigenous banks that were solvent but undercapitalised. This is to safeguard strategic Ghanaian interest in the banking sector and to support the banking industry.
The identified banks for the GAT support are:
The Agricultural Development Bank (ADB), Prudential Bank,
Universal Merchant Bank (UMB), Sahel Sahara/Omni Bank (BSIC/ Omni), National Investment Bank (NIB),
Objective of the Guarantee
The Sovereign Guarantee is aimed at supporting the Ghana Amalgamated Trust (GAT) Limited to issue instruments on the domestic debt market which would target private sector institutional funds, including pension and insurance funds as well as foreign and other investors, to be used as equity investment in the selected banks. The objective is to protect strategic Ghanaian interests in banks that are solvent but undercapitalised in the banking industry.
GAT Structure
The Ghana Amalgamated Trust (GAT) Limited is an independent Special Purpose Vehicle (SPV) with the objective of raising capital for local banks to help them meet the Bank of Ghana's minimum capital requirement. GAT is not intended to be a permanent structure and has a maximum time horizon of five years to exit its holdings in the banks and to repay its investors.
The GAT structure is a private sector approach that will encourage a temporary shareholding in these banks to be divested within a period of three to five years.
Beneficiary banks of the GAT financing will be required to sign on to strict governance and operations criteria to ensure funds are protected and well deployed to yield the best returns. GAT will also support the selected banks with appropriate management to undergo business transformation programmes to improve governance, leadership capa- bilities and operations, including credit and risk management.

Observations

Selection of the Beneficiary Banks

The Committee was informed that the relevant banks were selected based on the fact that they were majority Ghanaian- owned, solvent and had no regulatory breaches with the Bank of Ghana as at 31st December, 2018. Though NIB had faced some challenges and realised financial losses in recent years, it was still included in the beneficiary banks due to Government's substantial and majority ownership stake in it.

Levels of Guarantee

The Guarantee to be provided will be at two levels as follows:

70 per cent Sovereign Guarantee to investors who invest in ADB, Prudential, UMB and BSIC/Omni Bank up to GH¢780 million at an interest rate of 21 per cent; and

100 per cent Sovereign Guarantee to investors who invest in NIB up to GH¢1.14 billion also at an interest rate of 21 per cent.

GAT Financing

GAT will issue GH¢2.00 billion tradable bonds which will be listed on the Ghana Fixed Income Market (GFIM), giving the public the opportunity to participate in the programme.

The Bonds to be issued by GAT will have the following features:

5-year term;

21 per cent annual interest rate;

Zero coupon; and

70 per cent and 100 per cent Government Guarantee.

The targeted source of financing by GAT includes pension funds, institutional investors and also some foreign investors.

Eligibility Criteria

As to how the eligible banks were selected to benefit from the GAT programme, the Committee was informed that the qualifying banks for the GAT programme were determined using sound objective criteria including the following:

i. Majority Ghanaian-owned;

ii. Solvent as determined by the Bank of Ghana;

iii. Minimum pre-investment capitali- sation of GH¢120 million, and

iv. Independent valuation by pension funds.

GAT Exit Strategy

The Committee was informed that GAT has programmed to pay back all the borrowed funds and to exit its involvement with the banks at the end of the five year period. Three options for the exit of GAT have been identified as follows:

a. The original owners of the beneficiary banks could buy back the stake taken by GAT.

b. Initial Public Offer (IPO) by

GAT.

c. Private placement by GAT.

In addition to the amount to be accrued into a sinking fund from interests and dividends, these options would be explored to raise the needed funds to repay the amounts borrowed by GAT and guaranteed by Government.

Share Purchases with Borrowed Funds

Some Hon Members of the Committee wondered why funds are being borrowed to finance investment in banks when the Bank of Ghana has in recent past had occasion to annul the purchase of shares in ADB by Belstar using borrowed funds from UniBank.

To this, the Deputy Governor of the Bank of Ghana, Mrs, Elsie Addo Awadzi, explained that the Belstar issue was distinguishable as the funds involved in that transaction had been wrongfully employed from liquidity support funds provided by the Bank of Ghana itself.

Tax Waiver

In accordance with the provisions of the Public Financial Management Act, 2016 (Act 921), unless otherwise determined by Parliament, a beneficiary of a Government Guarantee is required to pay a Guarantee Fee determined by the Minister in consultation with the director responsible for the Public Debt management Office. This fee is to cover the credit risk of Government upon the signing of the guarantee.

The Minister has, pursuant to the above-determined fee at 0.5V of the guarantee amount, thus a guarantee fee of GH¢10.00 million.

Pursuant to article 174(2) of the Constitution, the House is requested to waive the guarantee fee in order to lower the transaction cost for raising funds for the identified banks.

Inability to Reach Consensus

A minority of the Members of the Committee expressed their disagreement with Government issuing a guarantee to GAT rather than giving the guarantee to the individual banks to go and source their financing from the capital market. They further expressed displeasure about the use of debt to obtain equity in the specified banks as in their opinion, the Bank of Ghana had in recent past annulled a similar transaction despite the explanation in paragraph 6.6 supra. For these reasons, they were unable to support the approval of the request.

Conclusion

The Committee, having carefully scrutinised the Request, respectfully recommends to the House by a majority decision to adopt this Report and approve by Resolution, the Request for the Issuance of a Sovereign Guarantee of up to GH¢2.00 billion in favour of Ghana Amalgamated Trust Limited to Support Indigenous Ghanaian Banks in accordance with article 181 of the 1992 Constitution of the Republic of Ghana and section 66(1) and (4) of the Public Financial Manage- ment Act, 2016 (Act 921).

The Committee by a majority decision further recommends to the House to approve the waiver of the Guarantee Fee totalling GH¢10.00 million being 0.5 per cent of the guarantee amount as determined by the Minister for Finance in accordance with article 174(2) of the 1992 Constitution of the Republic of Ghana and section 66(5)(a) of the Public Financial Management Act, 2016 (Act 921).

Respectfully submitted.
Minister for Monitoring and Evaluation (Dr Anthony A. Osei)(MP) 3:27 a.m.
Thank you, Mr Speaker. I beg to second the Motion. I think it is important that all of us understand what it is we are doing. I think the Hon Chairman of the Committee has already indicated that before us there are two requests; one is for the issuance of a sovereign guarantee, and two, is for the waiver of fees pertaining to the guarantee.
Mr Speaker, but it is very important that we give a historical analysis of how we got here. Mr Speaker, you would recall that between 2015 and 2017, the Bank of Ghana undertook an Asset Quality Review (AQR). The first time it was done in 2015, at least, about nine banks were found wanting in most of the areas. They were given an opportunity to do the right thing up to 2016. Some of them were able to do it, but some were not.
Mr Speaker, let me give some dates so that we are clear as to what happened. In August 2017, we would recall the Bank of Ghana revoked the licences of two of the insolvent banks; UT Bank and Uni-Bank. Which were both Ghanaian-owned.
In September 2017, the Bank of Ghana introduced the new minimum capital requirement based on an analysis of the works that they had done. This new requirement was expected to be GH¢400 million.
Mr Speaker, in March 2018, the Bank of Ghana appointed KPMG as an administrator over Uni-Bank Ghana Limited. In April 2018, the Bank of Ghana appointed an advisor to Sovereign Bank Limited to advise the bank's management et cetera.
Mr Speaker, in August 2018, the Bank of Ghana granted a banking licence to the
Consolidated Bank (CB), which was set up by the Government of Ghana. CB has Royal Bank, Uni-Bank, Beige Bank, Construction Bank and Sovereign Bank.
Mr Speaker, finally, in 2019, the Bank of Ghana revoked the licences of two more banks; Heritage and Premium Banks.
Mr Speaker, the question is, at the end of all these exercises, what happened? At the end of it, this is what we ended up with; sixteen banks were left -- Access Bank, foreign; Bank of Africa, foreign; Barclays Bank, foreign; Cal Bank, Ghana; Consolidated Bank, Ghana; ECOBANK, Pan-African; Fidelity Bank, Ghana; GCB, Ghana; GT Bank; Republic Bank; Societé -Generale; Stanbic Bank, Standard Chartered Bank, UBA and Zenith Bank which are all foreign.
Mr Speaker, out of the sixteen banks that were left, only four were Ghanaian banks; 25 per cent. In addition, First National Bank was allowed to merge with GHL Bank and the Energy Bank was allowed to merge with First Atlantic, which is also foreign. The only bank allowed to merge with Bangue Saharienne Pour Investment (BSLIC) Ghana Limited -- part of it is owned by a Ghanaian.
So the Government is trying to say that it is not acceptable in Ghana to have a majority of banks being foreign-owned. I do not know anywhere in this world where we could see this phenomenon. Mr Speaker, the Government is taking steps to ensure that more of our Ghanaian- owned banks get capitalised properly, so that they could compete.
Mr Speaker, the issuance of this sovereign guarantee is to— these five entities -- Agriculture Development Bank (ADB), OmniBank Ghana Limited, Universal Merchant Bank (UMB), Prudential Bank, and National Investment
Bank (NIB). Mr Speaker, it would interest you to know the shareholdings of these banks. OmniBank Ghana Limited -- BSIC Group 56 per cent; Mr Joseph Siaw Agyapong, 43 per cent; and Ms Cynthia Agyapong, 1 per cent; clearly, everybody knows that Joseph Siaw Agyapong is Ghanaian. Mr Speaker, UMB, 95 per cent is owned by Fortiz, a Private Equity Fund. The Question is, who is behind Fortiz Private Equity Fund?
It is important that we know that -- Fortiz Private Equity Fund, according to official records, has Mrs Salomey and Mr Botchway as shareholders. I am sure my Hon Colleagues here know who they are. They know they are Ghanaians -- [Laughter].
Mr Speaker, if we look at Prudential Bank and we go down the list, all the names are Ghanaians; starting from Frank Owusu, J. S. Addo, Kwesi Atuah, M. K. Omaboe, et al. They are all Ghanaians.
The other two -- ADB, as a strategic bank, majority is owned by the Government -- it is about 93 per cent owned by the Bank of Ghana and the Government of Ghana. NIB is about 95 per cent owned by Bank of Ghana and the Government of Ghana.

Mr Speaker, if we allow these two strategic banks to fail, it is not in our interest. Let me repeat, all these are Ghanaian and Government-owned strategic banks. The issue was raised that how come Government did not issue the guarantee to the banks. If they had been managed well, they would have raised the capitalisation and we would not be where we are. It does not make sense to then go and give the guarantees to these banks

for that purpose. That is why the Government is going through a private firm and Special Purpose Vehicle.

I heard one of my Hon good Friends on the other Side say that GAT is not known by Parliament. I want to remind my people that the last two Government guarantees that I remember went to the Investment Group of Eurojets the Egyptian group and some private person for STX. All those guarantees were issued by persons in the previous Government.

Mr Speaker, as I speak, I am aware that the one for STX is still floating somewhere — [Laughter] —— and the guarantee has not been arrested yet, so we should be waiting for it. All those people are private individuals, not the banks. Investment Group Investo Capital is a private Egyptian person and the STX sponsor was a private Ghanaian individual. So, when we say that we do not know GAT that it is a private person --

Our Hon Colleagues wanted to know when GAT was registered. I have in my hand and can tender it in, a certificate of incorporation of GAT, and their regulations, also duly legally registered as a Special Purpose Vehicle in Ghana. Government has made an arrangement to have NTHC as the nominal shareholders to back the sponsors.

Mr Speaker, the Hon Chairman of the committee told us that this is a strategic investment that in five years, they would exit. The hope is that the Special Purpose Vehicle, GAT, which is managed by very credible persons, one of them a good friend of mine, Albert Essien, who used to head EcoBank but is now retired -- He has been called back to do his national service to help. We ought to be careful when we start speaking against these matters, as to the object of what is being done.
Minister for Monitoring and Evaluation (Dr Anthony A. Osei)(MP) 3:37 p.m.
To repeat, after we started with 20 to
25 banks, we ended up with 16 and the majority are foreign. One cannot go to Nigeria as a Ghanaian bank and be incorporated there. I lived in the United States of America for a long time and do not know of -- I think there is one Ghanaian bank owned by Dr Nduom which was recently incorporated, but majority are American.
Mr Speaker, we should go to the United Kingdom (UK) and find out how many foreign banks are there. It is not done anywhere. As Ghanaians, we must begin to take charge of our destiny. This is a very worthwhile objective. I have not spoken about the potential job losses if we allow these companies to go kaput.
So I urge my Hon Colleagues on the other Side to take it as a national patriotic exercise. Whether in Government or out, this is Ghanaian and we need to support Ghana. We never know, maybe, somebody on the other Side might become the Chairman of the Board of one of these companies.
Mr Speaker, on a lighter note, the Chairman of the Committee is a member of the Board of ADB. [Laughter.] I would not say it is a conflict of interest but the Hon Chairman is a member of the Board. We have competent people sitting on the Board to make sure that the work is done. He is not part of GAT. ADB must negotiate with GAT very well. I can assure you that if the interest rate that they were giving them was not as high as 21 per cent, they would not get investors.
The investors want to be assured that Government, the sponsor, is fully behind them and Government must do that. Let us not run away from the fact that we want Ghanaians to be in charge and Government needs ADB and NIB as strategic banks.
Mr Speaker, I could go on and on but I think that I have made my point to my Hon Colleagues. This is a national patriotic exercise. I want to urge all of them to put aside politics and let us do what is proper. With those few words, I thank you.
Question proposed. Mr Isaac Adongo (NDC -- Bolgatanga
Central): Mr Speaker, I rise to urge this Hon House to reject the request for the issuance of a sovereign guarantee of up to GH¢2 billion in favour of GAT to support indigenous Ghanaian banks.
I say this with a very heavy heart because the banks involved are Ghanaian, therefore, one would have ordinarily supported any effort aimed at supporting them. Unfortunately, we are unable to support this because we do not believe in this Special Vehicle. We do not believe that the solution to the problem that we are encountering lies in this Special Purpose Vehicle.
Mr Speaker, we do not believe in the legal arrangement for carrying out this Special Vehicle and do not believe that the people of Ghana would get value for money for the banks, especially those that are Ghanaian and Government-owned banks.
We struggle to understand why we would own our banks, NIB and ADB. Everybody has been called upon to capitalise their banks, and we have refused to capitalise ours. Yet, we have gone around to say that another entity should come and ride on our backs for a guarantee from us to come and dilute our interests in our own banks.
Mr Speaker, this is a very pathetic story. If we give the guarantee to GAT and GAT goes ahead to take a stake in NIB, what it simply means is that the people of Ghana are now sharing the ownership of that bank with this private entity, GAT.
We have indicated that one of the exit options for GAT is that it can actually call a private individual and give its interests to them. When that private person takes up those shares, we would have lost the bank to a private individual and that would have been a backdoor approach to selling our bank to a third party. We, the people of Ghana, would have connived with our own guarantee and pension funds to deny our bank and leave it in the hands of a private individual by the end of the process.
Mr Speaker, as Ghanaian as I am, I feel that it is important that our bank remains in our own hands. We have no problem if any private bank, whether OmniBank, Sahel Sahara Bank or UMB Bank, decides to engage in any arrangement whatsoever. That is their cup of tea, but we are worried that our ADB and NIB, at the end of this exercise, might not be owned by us. That is the point from which we object this transaction.
When the Committee met, we made very definitive requests for certain documentation that would have assisted us to make a decision. One of those documents was to satisfy ourselves, that the Board of Directors of NIB and ADB, had passed a resolution at the Board level, recommending to our shareholders, the people of Ghana, to engage in this transaction with GAT.
Also, there was a shareholders agreement, even if it is preliminary, that satisfies us that the terms and conditions in those preliminary agreements with NIB and ADB would make sure that at the end of the day, we would get our banks back.
Mr Speaker, we were not provided with any of these two documents. So as we speak, we on the Minority Side are in the
dark as to the decision that the Government of Ghana took on the Board of ADB and our shareholders, to deal with
GAT.

We cannot proceed on the basis of darkness. We need to read those terms and conditions in the Agreement to be sure that our interest as Ghanaians is safeguarded. We were not provided --

Mr Speaker, the second thing we did was that we requested to have input on the financials of ADB and NIB. There is a lot of stories about NIB and we thought that by getting their financials, we would be able to come to the same conclusion that they need this support.

Mr Speaker, we are aware that analysts have indicated that NIB on its own balance sheet could recapitalise, become very solvent and would be one of the most liquid banks in this country without one penny from GAT.

Mr Speaker, why would we want to enforce an albatross on a neck of a bank that does not need that money? The Shareholders Agreement would have satisfied us that, indeed, they are willing to surrender this bank. Unfortunately, we were not provided with this.

Mr Speaker, we are aware that the section 9(d) of the Banks and Special Deposit Act, (Act 930), makes it clear that the paid up capital of a bank must not include borrowed funds. It also make it very clear in the definition of terms under Section 156 that any vehicle that is seen as a financial holding company must comply with Section 9(d).

Mr Speaker, this entity would borrow money and use the borrowed money to breach Section 9(d) in order to finance a
Mr Speaker 3:37 p.m.
Hon Members, order!
Hon Majority Leader, any indication?
Mr Kyei-Mensah-Bonsu 3:37 p.m.
Mr Speaker,
I thought we would deal with, at least,
one more Hon Member from either Sides before the Leaders have our turn.
Mr Daniel O. Aboagye (NPP) 3:37 p.m.
Mr Speaker, I thank you for the opportunity to support the Motion on the Floor of the House.
Mr Speaker, it is all right to have differences in strategies and for that reason if our Hon Friends on the other Side say that they do not believe in the strategy, it is all right. But that does not mean that the strategy that is being taken to fix or support these banks would not work. After all, what we do know is that the strategy that we have embarked upon since we took over so far has been working, especially, with respect to our micro economic indicators. The fundamentals are working right.
Mr Speaker, that argument is simple and unfortunately, our Hon Friends from the other Side are making it too difficult. What did Ghanaians say when the BoG started talking about increase in the required capital? We heard so many things -- most Ghanaians cried for the lives of our local banks and the Government has listened. Today, we are talking about local banks that would be supported to be able to meet the minimum required capital to operate as banks.
Mr Speaker, it is all right for the Minority to say that they do not support the idea because, probably, they do not see where we are going with this.
I would want to give an example on what happened last week. Hon Members from the Malawi Parliament visited Ghana's Parliament and visited the Finance Committee. They talked about the situation where they would like to go through Parliament in Malawi to see if they could intervene by way of controlling the interest rate because it was too high.
Mr Daniel O. Aboagye (NPP) 3:47 p.m.


When we engaged them further, we realised that, most banks in Malawi are all foreign-owned. They were basically enjoying monopoly, so to speak. There was no government bank in Malawi that could provide competition to lower interest rates. And so if we do not support local banks, ultimately, the foreign banks would end up owning majority of our banks, and for that matter, if we do not take care, we would experience the problems that our friends in Malawi are going through.

This is just last week. And for that reason, I believe what the Government is doing is an attempt to support the cry of our people about what is going to happen to our local banks. We need them to be there. Their jobs are at stake, and we cannot see to the collapse of these banks because they are not meeting the requirements.

Per page 4 of the Report, specifically, paragraph 6.4, the criteria for selecting these banks are quite sound. These are banks that are owned by a majority of Ghanaians — of majority shareholders of these banks are Ghanaians. They are banks that are solvent. They are good banks. These are banks that were already meeting the old GH¢120 million capital requirements. These are banks that have gone through independent evaluation.

As at the end of December 2018, these banks had no breaches with the Bank of Ghana in terms of compliance. So I believe that the step that is being taken is a good one. Let us get the Ghana Amalgamated Trust (GAT) Limited to come into, raise the needed funds. What the Government of Ghana can do is to provide us some assurance that in case something happens, they would be there to back us up.

Limited because it would be able to infuse debt, something the private sector does so well. That is efficiency. That is what we are talking about. So I believe that they may not believe in the strategy or they may not support what is happening, but they should not forget that posterity is going to question all of us if we do not save these banks because of just the increase in the minimum capital requirement.

Mr Speaker, I believe what is happening here today is quite important and I would encourage my friends on the other Side to change their minds. We do not want the financial sector in Ghana to be fully controlled by foreign banks. We want our Ghanaian banks to participate in what happens with our development.

Mr Speaker, we may do politics, but I believe this is a call to our friends on the other Side, that if they believe in Ghana, then they should support the local banks. If they sincerely believe in the fact that we have people who have jobs with these banks, then they should please support what is happening.

At the end of the day, given the competence we have displayed in managing the economic affairs of this country, this is going to go well. The results of what we are doing are going to prove to them that Ghana is working.

Mr Speaker, I believe that the strategy we have adopted should be supported by our friends on the other Side. They should change their minds and support us.

In all, they should not forget that this is more about Ghana than it is for the National Democratic Congressa (NDC) or the New Patriotic Party (NPP). I believe our friends on the other Side and those of

us on this Side would be called to question in future if we do not support this noble cause.
Mr Richard Acheampong (NDC — Bia East) 3:47 p.m.
Mr Speaker, thank you very much for the opportunity. This is one of the critical moments that we find ourselves in this House. The Committee Report is calling on us to support the guarantee that Government is trying to give to the five banks through GAT Limited.
It is not an issue of us not trying to support Government to achieve this purpose but we are speaking against this report for simple reasons; at the Committee level, we requested to know the Agreement signed between GAT Limited and those banks. These are five banks that the Report talks about.
Mr Speaker, we were only given three of the agreements. One is in respect of Prudential Bank; the other is the Universal Merchant Bank (UMB) and then the Omni Bank. If we check the Agreement signed between GAT Limited and that of Omni Bank, GAT Limited is providing GH¢120 million as a share, and Omni Bank is providing GH¢280 million to make up the GH¢400 million.
But let us look at the undertakings that GAT Limited is signing with Omni Bank. I am referring to page 3 of the document, item 7 — Undertakings by the Company — and I beg to quote:
“As long as the investor holds any investment securities, the company agrees to the following:
(a) The investor shall require that the company engages a banking consultant who shall be re- commended by the investor to review the company's operations and propose changes to Go- vernance personnel, operations, dividends strategies, credit policy review and business strategy and any other re- commendation that may be considered necessary.”
Mr Speaker, you as the minority shareholder investing only GH¢120 million in the Bank and with the Omni Bank providing GH¢280 million, do you want to have control over the Bank? What kind of Agreement is this? Minority share- holder having control?
This is a typical function of owners of the bank but they are taking control over the bank for investing 30 per cent of their capital in the bank, and it runs through all the Agreements signed between the five banks. We requested to know the Agreement signed between GAT Limited and the National Investment Bank (NIB), but as I stand, we do not have the Agreement. How do they expect us to support this arrangement?
What is in there that they do not want this House to see that so they do not want to give us the Agreement for us to be in a better position to also support what Government wants to do?
So if they are hiding something from us, then there is no basis calling on us to support this Agreement.
Mr Speaker, if Government is providing Sovereign Guarantee for GAT Limited, why is Government not providing Sovereign Guarantee for the five banks? This is because Government owes
Mr Richard Acheampong (NDC — Bia East) 3:47 p.m.


contractors who have facilities with NIB of over GH¢750 million. They should pay the contractors so that they would service their debts.

Their auditors have classified those as bad debts, and they have made 100 per cent provisions against those debts. So if they pay them and they pay the banks, they would do reclassification of the facility and 00 per cent charge, GH¢769 million, against their profits would be ploughed back as reserve and they do not need GH¢2 billion for recapitalisation.

They should pay the contractors so that the banks would have their moneys. Why do we need another bureaucracy? We are creating unnecessary bureaucracy because they owe contractors who also owe the banks. They should pay the contractors and NIB would get the money and do the recapitalisation because they would plough back reserves to get the GH¢400 million. What is the big deal about this? And they are bringing another investor to take absolute control over the bank.

We cannot support this because at the end of the day, people would use the backdoor to own the bank so we would not even get the national sense that they are talking about.

Mr Speaker, I beg to refer the House to the Banks and Specialised Deposit- Taking Institutions Act of 2016, (Act 930), and I beg to read section 9(d) together with section 44(d).
Mr Speaker, section 9 says and I beg to read 3:57 p.m.
“The Bank of Ghana shall not issue a license to an applicant unless the Bank of Ghana is satisfied that
(d) the paid-up capital of the applicant is adequate and the original sources of capital are acceptable and do not include borrowed funds;”
Mr Speaker, I beg to quote section 44 (4d)
“(4) The Bank of Ghana shall not register an applicant as a financial holding company unless the Bank of Ghana is satisfied that
(d) the capital of the applicant is adequate and the original sources of capital are not tainted and do not include borrowed funds;”

What are we doing here, Mr Speaker?

Mr Speaker, we sat here and passed this law; we denied our families and siblings of our holidays, hopping from hotel to hotel in order to pass a law that can stand the test of time but we have gathered here to repeal the very law that we passed. We are using GAT limited as a Special Purpose Vehicle to borrow money for recapitalisation. We would want to breach this law that we passed -- We will not accept this.

Mr Speaker, posterity will come and ask questions such as, who presided over that very Sitting? Who were the Members of the House? The Official Report will capture same -- [Laughter.] We cannot be part of this. We cannot breach our own law with impunity because we passed this law. We cannot use borrowed money to recapitalise a bank; the law is clear.

So I would plead with our Hon Colleagues on the other Side to have a second look at this and reconsider their position. If we would want to recapitalise the Bank, let us say so. We do not need to create another bureaucracy. Let us support the banks, so that they can also provide loan facilities and other support for the economy to grow. The 21 per cent GAT limited charge would not save anybody in this country.

Mr Speaker, with these few words, I am calling to our Colleagues on the other Side to let us reject this agreement as it is going to create unnecessary tension in this system for all of us. We cannot sit here and breach the very law that we all passed in this House.
Mr Speaker 3:57 p.m.
Leaders, the last Hon Member who spoke was referring to the present situation being one of the critical moments we sometimes have in this Honourable House. Any indication as to the way forward, Hon Majority Leader?
Mr Kyei-Mensah-Bonsu 3:57 p.m.
Mr Speaker, the Hon Minority Leader would be winding up for the Minority.
Mr Speaker 3:57 p.m.
Yes; but thereafter?
Mr Kyei-Mensah-Bonsu 3:57 p.m.
Mr Speaker, thereafter -- when we get to the bridge, we shall cross it.
Mr Speaker 3:57 p.m.
Hon Majority Leader, let us know our way forward, so that we would all advise ourselves accordingly.
Mr Kyei-Mensah-Bonsu 3:57 p.m.
Mr Speaker, we are debating a Motion. We have the
numbers to engage in the debate. I know Hon Members are pouring in and that is the reason I said when we get to the bridge we shall cross it.
Mr Speaker 3:57 p.m.
Hon Majority Leader, what did you say?
Mr Kyei-Mensah-Bonsu 3:57 p.m.
Mr Speaker, we would conclude the debate. When we conclude the debate and you have to put the Question, you would do so.
So let the Hon Minority Leader have his turn.
Mr Speaker 3:57 p.m.
Hon Minority Leader?
Minority Leader (Mr Haruna Iddrisu) 3:57 p.m.
Mr Speaker, let me thank you for the opportunity to contribute to the Motion that this Honourable House adopts the Report of the Finance Committee on the request for the issuance of a Sovereign Guarantee of up to GH¢2.0 billion in favour of the Ghana Amalgamated Trust (GAT) Limited to support indigenous Ghanaian Banks.
Mr Speaker, in doing so, I will raise three fundamental issues. Firstly, supervision and regulation by the Bank of Ghana. We should note that several months ago, the Bank of Ghana had cause to raise the minimum capital requirement for banks --
That is the policy that we should be questioning as a Parliament, whether it was necessary as a country for us to raise the minimum capital requirement of banks.
Mr Speaker, I have listened to the Hon Minister for Monitoring and Evaluation and one of our Colleagues. The Dagombas say that when you see a pregnant goat in the market, there must be a pregnant problem at home. Indigenous banks? Today, we are being told that the NPP
Minority Leader (Mr Haruna Iddrisu) 3:57 p.m.


Administration led by Nana Addo- Dankwa Akufo-Addo is committed to safeguarding indigenous banks.

Mr Speaker, let me speak without fear of contradiction that the bankers of this country and their leadership met the President of this Republic to ask for time, so that they could raise the minimum capital requirement of GH¢400 million but they were denied that opportunity. They met him and asked for time -- [Interruption.] The Hon Member should contradict me; this is a House of records.
Dr A. A. Osei 3:57 p.m.
Mr Speaker, I hate to debunk what my good Friend is saying.
Mr Speaker, I was at the meeting with the bankers and His Excellency, Nana Addo Dankwa Akufo-Addo; they did not ask him for time because it is not his prerogative. The prerogative is for the Bank of Ghana and not the President. So, they could not have been asking the President to do that. I was present at that meeting -- that issue never came up.
Mr Speaker 3:57 p.m.
Hon Minority Leader, you may want to just withdraw from that pathway because this is a person who was present and he said that was not the thing. You and I were not there. [Laughter.] The man who was there says that did not happen.
Mr Iddrisu 3:57 p.m.
Mr Speaker, it is a matter of public record that --
Mr Speaker 3:57 p.m.
Hon Member, by our rules, you may want to substantiate that, if you can now, or -- ?
Mr Iddrisu 3:57 p.m.
Mr Speaker, when they were speaking, you did not ask anybody to substantiate what he brought now. [Uproar.]
Mr Speaker 3:57 p.m.
Hon Member, with all respect to you, you are now attributing something to the President of the Republic. In fact, you are saying that today, a request is being made to save some banks. You were saying that when that opportunity arose, he declined to save others who requested. We all know the implications thereof. An Hon Member who was present at that meeting says that did not take place. This goes to even our own rules -- motive of someone and so on and so forth.
Mr Iddrisu 3:57 p.m.
Mr Speaker, may I request the Hon Minister to provide the evidence that he was in the meeting with the President? If he provides his evidence that he was in a meeting with the President, I will go with him.
Mr Speaker 3:57 p.m.
Hon Member, he who alleges must prove -- Hon Lawyer.
Mr Iddrisu 3:57 p.m.
Mr Speaker, I am not alleging; I am reporting a fact.
Mr Speaker 3:57 p.m.
Hon Member, you would not continue until you substantiate it. You know that is the rule. [Uproar.]
Mr Speaker 3:57 p.m.
Hon Member, it would not go into the record that what you are saying is correct. For that matter, it would not be allowed. You know that in this House, if you make an allegation and you cannot substantiate it, you withdraw. And I would insist upon that.
Mr Iddrisu 4:07 p.m.
Mr Speaker, that I withdraw the words, “and he declined”; “the banks asked for time”; is that satisfactory? [Interruption.]
In fact, I will provide the evidence that it was reported on the front page of the Daily Graphic so I am just going to bring it from the Library. This is a matter of public record but if you take objection to any aspect, I will hold it.
Mr Speaker 4:07 p.m.
Hon Minority Leader, I will give you up to tomorrow to provide your evidence.
Mr Iddrisu 4:07 p.m.
Mr Speaker, yes, thank you. I will submit it.
Mr Speaker 4:07 p.m.
Then you will leave your argument now.
Mr Iddrisu 4:07 p.m.
Mr Speaker, maybe, I should choose my words well.
Mr Speaker 4:07 p.m.
You may want to withdraw that and substantiate it tomorrow. [Interruption.]
Mr Iddrisu 4:07 p.m.
Mr Speaker, I withdraw, but as you have said, tomorrow, I will lay it at the table.
Mr Speaker 4:07 p.m.
Hon Minority Leader, you will abandon that pathway by withdrawing. I said that tomorrow, I will give you an opportunity to continue. For the time being, you withdraw.
Mr Iddrisu 4:07 p.m.
Mr Speaker, I will tender this -- Business News of Wednesday, 4th April, 2018 - -Yes, I will add the report of the Daily Graphic tomorrow.
Mr Speaker 4:07 p.m.
Hon Minority Leader, where are you reading from? [Laughter.]
Mr Iddrisu 4:07 p.m.
Mr Speaker, I will withdraw those words but provide that the local banks seek the President's intervention
in minimum capital demand. This is what I am reporting.
Mr Speaker 4:07 p.m.
Hon Minority Leader, if you want to withdraw --
Mr Iddrisu 4:07 p.m.
Mr Speaker, I will withdraw the words; “and the President declined” but the local banks --
Mr Speaker 4:07 p.m.
Not “and the President declined” only. Please, Hon Members, in fact, I am not amused by this approach because I have consistently ruled in this same way on both Sides. If you cannot substantiate, you withdraw; and if you want to come back later, you may ask for permission and do so. I will not turn away from that. If it ever happens, you withdraw and continue. I will not change my stance on this; that is the rule of the House and no shouting will make the law change.
Mr Iddrisu 4:07 p.m.
Mr Speaker, I withdraw. -- [Interruption.]
Mr Speaker, local banks seek the President's intervention in minimal --
Mr Speaker 4:07 p.m.
Hon Minority Leader, do you want to read from somewhere? If you want to read something from somewhere, you seek my permission. [Interruption.]
Do you not know that? [Laughter.] Hon Members of this House, do you not know that? [Laughter.] For goodness sake --
Hon Members, no ignorance must be revealed in this manner, please.
Mr Iddrisu 4:17 p.m.
Mr Speaker, the banking sector is one of the most competitive sectors of the economy which grew from

GH¢82 billion by the end of the year 2016 to GH¢93 billion in the year 2017.

Mr Speaker, the matter in question that I am referring to is that the Bank of Ghana, which is the regulator, requested banks to recapitalise from GH¢120 million to GH¢400 million.

It is also a fact that a special letter was signed by the Managing directors and chief executives of indigenous banks to the President of the Republic, requesting for time to meet the requirements of the Bank of Ghana by the banks -- probably, that is what I am reporting -- was not satisfied. That not being satisfied meant that a number of banks, including those that we are seeking to recapitalise through GAT Limited, are in this situation because of our inability to help them.

Mr Speaker, I have been asked to produce evidence. The Hon Minister's memorandum to Parliament is accompanied by a letter signed by the Secretary to the President of the Republic approving of a GAT Limited by an Executive approval.

I am saying that a request was made to the same President and with this, he has recommended to Parliament that we do GAT. What is GAT? A private limited liability company? Why can the Go- vernment not just walk and say that it wants to help NIB from its eminent financial crises as a Government, therefore, I am guaranteeing GH¢200million for them?

Mr Speaker, the next question is, why can the Government of Ghana not just say to NIB that it is its majority shareholder, therefore, it would want to save them in order to save jobs? As a Government, this is what it would want to do with them. Our difficulty is creating a

private vehicle of GAT Limited to recapitalise and finance those indigenous banks; that is the wrong we are laying bare. We do not think that is a way to deal with it.

For instance, the NIB has shares in Nestle Ghana Limited which is of value. They should give us evidence of shareholder agreement, meeting of shareholders and the Board, that what they seek to do as a Government in the name of GAT Limited has the approval of shareholders and the board of directors. They cannot just be purporting to be acting on behalf of NIB or the Agriculture Development Board (ADB).

Mr Speaker, as a Government, when you respect corporate governance principles and their rules -- Where is your respect for rule of law and the fundamentals of the law? They should give us the shareholder agreement and a meeting of the board of directors where they have approved that they should be saved through GAT Limited.

So today, we are saying that, yes, Government must save jobs. It is our country and the Bank of Ghana is not above the President of the Republic. If he wants to save any bank, he has our mandate to do that, which is right than to come to Parliament as he has done.

Mr Speaker, we are not saying that we should not save banks; we need to save the banks, the jobs. In any case, the Hon Minister for Finance, only today in an Answer to a Question posed by the Hon Member for Bolgatanga Central, indicated to us the colossal sum of money that he has spent in dealing with this banking crises.

So we should juxtapose it mathe- matically that we have spent over GH¢12

billion, as indicated in the State of the Nation Address, to fix this banking situation. How much did we need to save those banks and could they not have used the GH¢12 billion in a manner which was more economically prudent?

Mr Speaker, we are not saying that Government should not save jobs; they should follow due process of shareholder agreements. Mr Speaker, as the Hon Minister for Monitoring and Evaluation said,we are holding here the governance structure of the issuer and the issuer comprises Albert Eshun, Eric Otoo and Sampson Akligor as he mentioned.

It is the Bank of Ghana that raised the minimum capital requirement and do not forget that I was a member of the IMF negotiating team in Washington when many of these issues came up. So raising it from GH¢120 million to GH¢400 million -- and the banks pleaded for time. Did we grant them the time? Mr Speaker, I would leave that answer to any of us and posterity on whether the banks ask for extension of time at the end of 2018 when they could not meet the minimum requirement per the letter addressed to the President.
Mr Speaker, if you look at this letter, it reads 4:17 p.m.
“Office of the President, Secretary to the President.”
Mr Speaker, it should read “Office of the President” because he is conveying to us the decisions of the President.
Mr Speaker, paragraph one reads 4:17 p.m.
“Executive Approval -- The President has granted Executive approval for the issuance of Sovereign Guaranty of up to GH¢2 billion in favour of Ghana Amal- gamated Trust (GAT) Limited to enable GAT to urgently raise the needed funds to support the capitalisation of the identified indigenous banks.”
Mr Speaker, why now? Why could we not recapitalise them before the end of December 2018 but allowed for the financial crisis with its monumental consequence on employment and investor confidence in our country? Already, we are in a country where the culture of savings is low. We have not done well for the banking sector.
Mr Speaker, the second paragraph reads 4:17 p.m.
“The President has also granted Executive approval to request a Parliamentary waiver for GAT.”

Mr Speaker, I would want to know from the Secretary to the President what the waiver is for. He must write to us with certainty for us to know the waiver that we should grant. Mr Speaker, his letter just reads that the President has also granted Executive approval to request a Parliamentary waiver for GAT limited. Mr Speaker, I know that under article 274 of the 1992 Constitution, we have the power to grant exemptions, and if that is what he wants, then he should say so, that it is a waiver of tax exemptions.

Mr Speaker, I have seen correspon- dence from the office of the latter on this same matter so he should reference it. Mr Speaker, I would come to Public Financial Management Act where, if a loan is being guaranteed, fees must be paid. Why does the Hon Minister for Finance want to breach section 5 (a) of the Public Financial Management Act (Act 921)?
Mr Speaker, section 5(1)(a) reads 4:27 p.m.
“Pursuant to section 4, the Minister may
(a) request a report or any other information from any covered entity or any other person receiving grants, advances, loans, guarantees or indemnities from the Government”.

Mr Speaker, is he asking that Parliament should suspend this law? For what purpose? Is it because he wants GAT limited to save a bank? Mr Speaker, our difficulty has nothing to do with government if it has good intentions to save the banks. But our difficulty is the Special Purpose Vehicle of a GAT Limited. Was due diligence conducted? Were the banks consulted? Who determined the beneficiary banks and how much each of them would get?

Mr Speaker, I would go into the numbers. For instance, we have the Agriculture Development Bank, the Prudential Bank and the Universal Merchant Bank and numbers have been attached. Mr Speaker, I would want to know what due diligence informed these numbers? They should share with us. Mr Speaker, for instance, under ADB there is GH¢127 million; under Prudential bank, it is GH¢251 million and under Universal Merchant Bank (UMB), there is GH¢247 million; Omni Bank is GH¢130 million and NIB is GH¢1.140 million.

Mr Speaker, they should share with us the due diligence and consultations that were conducted to determine these numbers and how they are to benefit?

It is the same Bank of Ghana that increased the minimum capital require- ment. Mr Speaker, Hon Members on this Side, having listened to Hon Adongo, Hon Acheampong and our Hon Colleagues on the other Side --

Mr Speaker, for emphasis let me refer to your Committee's Report. When the Hon Chairman was submitting the Report, he reported that they could not build a consensus on this matter. Mr Speaker, for the Government of Ghana wanting to borrow over US$3 billion -- In any case the NPP Government now knows that loans and borrowing could be helpful. [Laughter].

Mr Speaker, a few years ago, they said that they knew where the country's money was and that they would know what to do, but they are now holding a calabash and they want us to praise them that they are borrowing.

Mr Speaker, they are borrowing because they anticipate a US$3 billion that is coming.

Mr Speaker, let me emphasise strongly that we would support the President and the Government to save banks but he must always do so in a timely manner. When the banks came, cried and wrote a letter they should have responded favourably as they are doing now but not later. Mr Speaker, Hon Members on this Side -- [Interruption] -- That is why there was a change of government. Mr Speaker, Ghanaianse entrusted the mandate to them that they would do things differently but they are borrowing. [,Laughter.]

Mr Speaker, the same borrowing that they said was unacceptable has become acceptable. Mr Speaker, Bloomberg is reporting that the depreciation of the Ghana cedi is among one of the fastest in the world today. The fastest depreciating currency in the world today is the Ghanaian cedi.

Mr Speaker, we on this Side — I have often said that there are matters that I do not want to be judged this evening or tomorrow morning. We want to be judged with time. We will not partake in this decision on this Ghana Amalgamated Trust Limited (GAT). As captured in the Committee's Report, it is a majority decision because we could not build consensus, because they asked for shareholder agreement, Board meetings — In respect of NIB, we would ask questions of why come the Board Chairman even had to resign in the process of this consultations.

We will raise those questions. The Board Chairman resigned; what informed the resignation of Togbe Afede at NIB?

Mr Speaker, finally, even as we are taking this amount, we are being told 21 per cent — For some, they say 70 per cent

and for others they say 100 per cent. They should go into the amount and give us the arithmetic. How much of it is 70 per cent guaranteed, and how much of it is 100 per cent guaranteed? Because that is what is provided for in this Committee's Report.

Mr Speaker, we will support jobs — 21 per cent annual interest rate. I am reading paragraph 6.3 — GAT financing; 70 and 100 per cent Government guarantee.

The Hon Minister for Monitoring and Evaluation made his references to other guarantees whether those are the same in form, nature and character. He is the economist but we would recognise Ghana Amalgamated Trust Limited (GAT).

We would recognise that Special Purspose Vehicle.

If they would want to help banks, they should help them, but for Government to just get three private people, we might even ask them to lift the veil because we only know of the directors. We would raise the issue of ownership.

Mr Speaker, on an important matter like this, we are saying that, for GH¢ 3.9 billion to be borrowed, it is good to build consensus. Let us get the leadership and ownership of the banks to consult further, to get their buy-in.

Mr Speaker, so finally, we would want to register that on this day, we on this Side did not support the GAT and the GH¢2.00 billion in favour of GAT Limited to support indigenous banks. We support recapitalisation; we support improvement in governance of those financial institutions, but we would want deeper and better consultations.
Mr Speaker 4:27 p.m.
Hon Majority Leader? [Uproar.]
Please, let us have the same quietness.
Mr Osei Kyei-Mensah-Bonsu 4:27 p.m.
Mr Speaker, I am just noting that some people are in a very confused state because the statement from the Hon Minority Leader was that they were not going to participate in the decision-making. If they are not participating in the decision, they are not here. But if they decide to call for a headcount, they are part of the decision. So they should not confuse the two. That is why I am saying some people are in a confused state.
Mr Speaker 4:27 p.m.
Hon Members, do not compel me to mention names; it would go into the Hansard, and it is not good.
Mr Anthony Effah (NPP -- Asikuma/ Odoben/Brakwa) 4:27 p.m.
Thank you, Mr Speaker.
Mr Speaker 4:27 p.m.
Hon Member, I do not know what you are doing.
Hon Majority Leader, you were on the Floor.
Mr Kyei-Mensah-Bonsu 4:27 p.m.
Mr Speaker, I said I was yielding my place to the Hon Anthony Effah to conclude the debate.
Mr Speaker 4:27 p.m.
Then, Hon Member, you may go on.
Mr Effah 4:27 p.m.
I thank you, Mr Speaker, and also the Hon Majority Leader for yielding to me.
Mr Speaker 4:27 p.m.
Hon Majority Leader, at this juncture, unless you are provi- dentially hindered, you must remain in the House. [Laughter.]
Mr Kyei-Mensah-Bonsu 4:27 p.m.
Mr Speaker, I have to respond to a very serious request. [Laughter.]
Mr Speaker 4:27 p.m.
I have already given you the answer.
Yes, Hon Member?
Mr Effah 4:27 p.m.
Thank you, Mr Speaker, for this opportunity. I rise to support the Motion on the Floor of the House. However, before making my submission, I would like to draw the attention of the House on a misrepresentation of the law as presented by Hon Member who spoke earlier.
They made reference to section 9(d) of the Banking and Special Deposit-Taking Institution Act of 2016 (Act 930). With your indulgence, I would read the same section that was read to us and to interpret it properly to the House's understanding.
rose
Mr Speaker 4:27 p.m.
Hon Members, you are standing. No Hon Member is allowed to be standing. Hon Members, stand for a purpose.
Mr Effah 4:27 p.m.
Mr Speaker, the argument that was raised that banks are not allowed to borrow money to capitalise is erroneous. I would like to read the relevant clauses. Section 9(d) which was referenced reads with your kind per- mission:
“9. The Bank of Ghana shall not issue a licence to an applicant unless the Bank of Ghana is satisfied that
(d) the paid-up capital of the applicant is adequate and the original sources of capital are acceptable and do not include borrowed funds;
Mr Speaker, the emphasis here is a pre- requisite for licensing. None of the banks we have here is applying for a new licence. That is what I would like everybody to note. It is a pre-requisite for licensing a new bank that calls for banks to find money other than borrowed funds.
Mr Speaker, the same law gives room for existing banks to borrow in order to expand. Otherwise, no corporation in the world would ever expand and recruit. So that is erroneous and I would like to correct that argument.
Mr Speaker, there was also an argument by Hon Isaac Adongo when he made reference to preference shares. He unfortunately, left out the bigger element: ordinary shares. He argued that when preference shares are issued, the owners may recall their funds and leave the banks without capital.
Mr Speaker, while that is true, there is a provision in the GAT Limited arrangement for people to buy shares. What is even important again is that, the Ghana Fixed Income Market allows individuals to participate in the shareholding of the whole scheme.
What this means is that after GAT Limited has raised the bonds and capitalised these banks, the individual bonds or securities would be traded on the Ghana Fixed Incomes Market which allows you and I to own shares or be part of the banks.
So the assumption that these banks, especially NIB and ADB are going to leave Ghanaians for other ownership is not entirely correctly. You and I could still maintain our ownership in the banks as long as we make use of the Ghana Fixed Income Market. These are all arrangements under the scheme that we are considering for the sovereign bond.
Mr Speaker, the challenge of these banks were known way back in 2015. The asset quality review reports were clear and available with the central bank. What action was taken? No action was taken even though all these difficulties had been highlighted. In 2016, there was another review of the conditions of these banks. Everything went to the Governor's office, and there was no action.
Mr Speaker, the question I have to ask my dear Hon colleagues is, should this Government also stay aloof without acting? No. The managers of the economy have a social contract with Ghanaians to ensure that the economy runs effectively. So, some action has to be taken, the reason we have taken several actions. What the Governor has done is not only to raise a sovereign guarantee for GAT Limited for these banks.
Mr Effah 4:37 a.m.


In the first instance, we had a purchase assumption agreement. This option has been exploited.

I was happy when the Hon Minister said that the assets and profitability of GCB Bank that took over these banks is growing and branch network is growing. GCB Bank is now a bigger bank. So that was one option that was available.

Mr Speaker, the Hon Minister also injected money into the Consolidated Bank of Ghana. The Consolidated Bank of Ghana received cash injection. So there was also a second option that the Government utilised. This third approach is to encourage GAT to raise money for some five banks which are enumerated here.

Mr Speaker, so this argument about not supporting the issuance of sovereign guarantee for GAT to raise money gives the impression that that is the only method that is available to the Government. But as I have said, two other methods have been used and we have already had information that the purchase and assumption by GCB Bank by the two earlier banks is working. This morning, we heard the Hon Minister answer Questions on that.

Mr Speaker, the evidence would be in published accounts of all these banks in March. Hopefully, from the 15th to the end of March, we would see all the banks publishing their accounts. This is a requirement and I would encourage Hon Members to satisfy themselves that the banks are doing better now after the reforms in the banks.

Mr Speaker, the request for a sovereign guarantee by GAT is essentially to issue instruments in the domestic market. Let

Mr Speaker, when we have domestic participation in the issuance of bonds, it helps grow our domestic—
rose
Mr Speaker 4:37 a.m.
Hon Member, do you stand on a point of order?
Mr R. Acheampong 4:37 a.m.
Very well, Mr Speaker. I thank you for the opportunity.
My Hon Friend is misleading the House. He made a statement that very soon, NIB would publish its financial statement. Mr Speaker, Standing Order 95 frowns on this; he is anticipating. Meanwhile, we requested for the docu- ment, we did not get it and he is here anticipating that in a few months. Is he a worker of NIB? [Uproar] --
Mr Speaker 4:37 a.m.
Hon Member, you may continue.
Mr Effah 4:37 a.m.
Mr Speaker -- [Interruption]
-- 4:37 a.m.
Mr Speaker 4:37 a.m.
Order! The Hon Anthony Effah has the Floor.
Mr Effah 4:37 a.m.
Mr Speaker, it is common knowledge that banks have been -- [Interruption] --
Mr Speaker 4:37 a.m.
Hon Member, you are being drummed off by the background noise.
Mr Effah 4:37 a.m.
Mr Speaker, it is common knowledge—
Mr Speaker 4:37 a.m.
Hon Effah, I want silence, so wait. When Hon Members give you silence, you may continue.
Mr Kyei-Mensah-Bonsu 4:37 a.m.
Mr Speaker, my Hon Colleague who came in to interject when the Hon Effah was making his own submission came under Standing Order 95. Mr Speaker, I believe when Hon Members want to come on a point of order, they should be seized with the facts as provided by our rules.
Mr Speaker, let him read Standing Order 95. He just gets up and then quotes something. Standing Order 95 provides:
“It shall be out of order to anticipate a Bill by discussion of a motion dealing with the subject matter of the Bill on a day prior to that appointed time for the conside- ration of that Bill.”

Mr Speaker, I am on my feet. Does he understand the rules of this House? If he does, he must do the proper thing.
Mr Speaker 4:37 a.m.
Hon Deputy Minority Whip, if you want to say something, you would have to at least wait for him to come off his feet. [Interruption.]
Mr Kyei-Mensah-Bonsu 4:37 a.m.
Standing Order 95 (2) provides:
“It shall be out of order to anticipate a Bill or a motion by discussion of an amendment to it”.
Mr Speaker, again, it does not apply. Mr Speaker, Standing Order 95(3) provides 4:37 a.m.
“In determining whether a discussion is out of order on the ground of anticipation, regard shall be had by the Mr Speaker to the probability of the matter in anticipation being brought before the House within a reasonable time.
Mr Speaker, all these do not apply. So I would appeal to my Hon Colleague. He may have a point to intervene. I just read Standing Order 95(3). The combined effect of the Orders (1), (2) and (3) provides him no space to intervene.
Mr Speaker, I believe the Hon Member laughing knows that what he has done is totally out of place. Mr Speaker, just forgive him of his trespasses, but he should not come again by this route.
Mr Speaker, I thank you.
Mr Speaker 4:37 a.m.
Hon Deputy Minority Whip?
Mr Ahmed Ibrahim 4:37 a.m.
Thank you very much, Mr Speaker. Ordinarily, I would not do that but the Hon Majority Leader had advised or appealed to most of us in this House not to raise a point of order against a point of order.
Mr Speaker, we all know, and I took it from him that when a point of order has been raised, it is up to Mr Speaker to rule. Mr Speaker, you could have ruled Hon Richard Acheampong either out of order
An Hon Member 4:37 a.m.
Did Mr Speaker seek your assistance?
Mr Speaker 4:37 a.m.
Hon Member, we went beyond the mere raising of a point of order. I ruled him out and asked the Hon Member to continue. The Hon Majority Leader has it well within his powers, and in fact, duties to assist this House to go by its rules and act in accordance with established practice and that is exactly what he did. And please, that is the privilege of Hon Leaders, I must point out to you, which I give to both Sides.
Yes, Hon Member, you may please conclude.
Mr Effah 4:37 a.m.
Mr Speaker, I thought I had a lot to say but -- [Interruption] --
Mr Speaker 4:37 a.m.
Order!
Mr Effah 4:37 a.m.
Mr Speaker, but in conclusion, I would like to —
Mr Speaker 4:37 a.m.
Hon Member, I said you may continue. [Laughter.] I know how you were— Order!
Mr Effah 4:47 p.m.
Mr Speaker, this arrange- ment that the Government has put in place is to salvage banks that are ordinarily doing well but unable to meet the minimum capitalisation. I think it has been said over and over.
Mr Speaker, the importance of Government encouraging GAT to raise the funds is that, if the various individual banks were to go solo, we would get several sets of documentation to regulate the whole arrangement.
However, by getting one institution that is properly licensed to work, this arrangement is good for us when it comes to supervision, monitoring, documenta- tion and even monitoring of payments. This is because there would be an escrow account that would receive all payments for retiring of the debt.
Mr Speaker, there are very clear exit strategies that have been included in the documentation to this House, and among these would be the buyback of shares by the original owners. This has been put in the agreement. So if after a while, the shareholders would like to get back their assets, they have the first right of refusal to say that they no longer need those shares. There is a provision for shareholders to buy back their shares, even after they have been temporarily assigned to GAT.
There could be private placements, and I have also explained that because of the fixed income market, we could participate in it as this is a simpler way for GAT to offload the shares that it holds, so that it could get cash-in to pay under the guarantee.
Five years is quite a long time for the Government to stand in readiness for any liability that might arise, by virtue of the liability we are taking today. So let us not

assume that from day one, the Government has an obligation to pay GH¢2 billion back. The Government has between three and five years to step in, when necessary, and I believe that five years is enough time for this Government to manage this process.

Mr Speaker, all that I would like to add is that as long as the bonds are tradeable, we do not have fears to hold on to the bills that we purchased. It would be necessary, for example, that when we have purchased a bond for five years, we trade it in the short term and have some liquidity.

I would like to urge this House to agree with the Hon Minister and, especially, the Government to provide the sovereign guarantee that is required, so that the required funding is raised and we do not have any more banks going down the drain. I would like to encourage the House to interpret the laws and educate the public properly so as not to misrepresent information that is already in the law to Ghanaians.

Thank you very much, Mr Speaker, for the opportunity.
Mr Kyei-Mensah-Bonsu 4:47 p.m.
Mr Speaker, the Hon Minister for Finance would want to respond to a few issues before we come to the conclusion.
Mr Ofori-Atta 4:47 p.m.
Thank you very much, Mr Speaker.
I would like to thank my Hon Colleagues on the other Side of the aisle for a very spirited debate.
Mr Speaker, we have gone through a banking restructuring these past 26 odd months that we have been here. Due to the way in which the banks were managed
or unmanaged, we have had to spend over GH¢9 billion in this period, which is somewhere around three per cent of our gross domestic product (GDP), to support and save the banking infrastructure.
Since then, we have a lot more stability and credit to the private sector which has increased from some GH¢34 billion to GH¢37 billion and change. The issue of GAT and using the Special Purpose Vehicle is really a strategy to ensure that we have the type of governance that is needed. These banks were not insolvent; however, they could not manage to raise the needed capital.
We worked with the banks, knowing the stages that they were in, and the Central Bank gave them 18 months to be able to do that. It was clear during that period that they were not going to be able to do that within a time that was reasonable, and an action had to be taken.
Mr Speaker, it is true that the indigenous banks came together to ask the President for time, among other things. A special committee among them was formed, and they came up with the type of structure that we have come up with. They agreed to it because they felt it was the best way to go forward.
The GAT structure would enable us to have, as you have seen, people like Mr Otoo and Mr Essien, who run EcoBank International, as the managers of that entity. This then would provide the type of private equity oversight that is required to ensure that the banks do not fail, and that they grow to become the type of banks that we have experienced coming in from Nigeria.
The issue of encouraging the pension funds to participate in this is because we have also seen this before. At the time of the meltdown in the United States of
Mr Ofori-Atta 4:57 p.m.


America to the banking structure, similar Special Purpose Vehicles were formed in which the type of Armageddon that has been expressed by our Hon Brothers across was also expected.

In the end, these banks, like JP Morgan and Company, have become much stronger and the Government of the United States of America actually walked away with incredible amounts of profit because they provided both capital and technical support at the right time.

Mr Speaker, that is what we want to do with our banking institutions. As the Hon Majority Leader said, we cannot stay in this country for all our banks to be owned by foreigners. That is a compromise that we cannot adhere to. We are confident that with the strategy we have taken, appropriate and strong management would be given to these institutions, and the banks would turn around for pension funds to make back their moneys and some. We have also given the possibility of participating in the equity pick up.

With regard to ADB and NIB, as you know, the Government, the Central Bank and the Ministry of Finance, among others, remain the majority shareholders. Therefore we are committed to saving them before anything occurs.

Mr Speaker, ADB, as we have stated, wants to be capitalised to become a strong agricultural bank, and NIB also wants to become a strong industrial bank. With the issue of shareholding, such as Nestle Company Limited, we do not intend to sell shares of that nature because they are important rubrics for the industrialisation that we envision.

NIB has had many challenges and we all know that. There is a lot of clean-up that has to be done. We are not certain

that NIB, on its own, would ever be able to raise the capital of GH¢1.2 billion in change that we request. Through GAT, we would be able to give them the capital and appropriate technology, leadership and governance, and ensure that they become the ADB and NIB of old that we have always looked out for.

Mr Speaker, I would like to conclude to tell my Hon Colleagues on the other Side that, yes, we want a strong banking framework for the country, strong indigenous banks, and we want to protect the banks. There are various ways in which these could be done, and this is a tested way that we are sure would get us the type of results that we all aspire for the country.
Mr Kyei-Mensah-Bonsu 4:57 p.m.
Mr Speaker, we have finished with the debate, and what is left with now is for the Question to be put. However, I noticed that we may not have the numbers -- Standing Order 109(1) provides that, and with your permission, I beg to quote:
“No Question for decision in the House shall be proposed for determination unless there are present in the House not less than one-half of all the Members of the House, and, except otherwise provided in the Constitution, the Question proposed shall be determined by the majority of the votes of the Members present and voting''.
Mr Speaker, this provision is grounded in article 104(1) of the Constitution. This is also to abort what some conspirators
are planning to do -- [Laughter] -- but we would take the wind out of their sails.
Mr Speaker, article 104(1) of the Constitution provides, and with your permission, I beg to quote:
‘'Except as otherwise provided in this Constitution, matters in Parliament shall be determined by the votes of the majority of members present and voting, with at least half of all the members of Parliament present''.
Mr Speaker 4:57 p.m.
Hon Members, order!
Mr Iddrisu 4:57 p.m.
Mr Speaker, a while ago, this Parliament, as constituted now and present, took a decision on a US$750 million bond. At that time, this Standing Order that the Hon Majority Leader has referred to was not part of our Standing Orders, but it is now part. How interesting.
Mr Speaker, we are in your hands.
Mr Speaker 4:57 p.m.
Hon Minority Leader, I do not know what you are talking about. [Laughter.]
Mr Iddrisu 4:57 p.m.
Mr Speaker, you may probably want to suspend Sitting so that we would retire to a Committee on the Whole. Whether guard today or guard tomorrow, we are not guards.
Mr Kyei-Mensah-Bonsu 4:57 p.m.
Mr Speaker, for the records, the Constitution provides
that, at least, half of Hon Members should be present to take part in the voting.
When the Minority signalled that they did not want to be part of it -- that is why I said that they were in a state of confusion. If they decide to walk out, we would not have the numbers to vote -- and I anticipated their move. I was reading every move. [Laughter.] They would fall on their own knives.
Mr Speaker 4:57 p.m.
The decision would be to adjourn indefinitely.
Hon Majority Leader, I believe we have a Committee on the Whole.
Mr Kyei-Mensah-Bonsu 4:57 p.m.
That is so, Mr Speaker.
Mr Speaker 4:57 p.m.
The Hon Second Deputy Speaker, would take the Chair and continue with the Business.
Mr Second Deputy Speaker 4:57 p.m.
Hon Members, let us have some order.
Hon Majority Chief Whip, is there any indication?
Mr Kwasi Ameyaw-Cheremeh 4:57 p.m.
Mr Speaker, time is far spent, and we have done a lot for the day. It's being past 2.00 p.m. long ago, you may adjourn the House.
Alhaji Mohammed-Mubarak Muntaka 4:57 p.m.
Mr Speaker, I thought my Hon Colleague, the Hon Majority Chief Whip, would have taken the opportunity to thank Hon Members for the endurance, having extended the House without giving us food.
Mr Second Deputy Speaker 4:57 p.m.
Well, it is the duty of both Hon Leaders to do what you have just done. You have done the proper thing, but you should have just
added to what he said and not tried to blame him. We are under all of you.
Hon Members, I would then proceed to adjourn the House.
ADJOURNMENT 4:57 p.m.
  • The House was adjourned at 6.20 p.m. till Thursday, 14th March, 2019, at 10.00 a.m.