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Ken Thompson: Transfer of $250m to UBA makes no sense

The Chief Executive Officer of Dalex Finance, Ken Thompson, has described government’s decision to invest $250 million of the $ 1 billion Eurobond with the United Bank of Africa (UBA) as unreasonable.

This arrangement was revealed by the New Patriotic Party’s presidential running mate, Dr. Mahamudu Bawumia, who accused government of diverting $250 million of the total proceeds from the nation’s $ 1 billion Eurobond it issued in 2015 to a private account at UBA.

According to Dr. Bawumia, the Finance Ministry’s confirmation that it transferred $250 million of the proceeds from the $1 billion Euroband was an admission of weakness and incompetence.

He maintained that Seth Terkper’s justification of the transaction confirmed that those in charge of Ghana’s finances did not know what they are doing, and asked the Minister of Finance, Seth Terkper, to resign from his position for breaching regulations of the Bank of Ghana.

But Seth Tekper, rejected Dr. Bawumia’s claim in a statement saying the $250 million was safe and had already started bearing interest.

This course of action taken by the Finance Ministry has however remained baffling to Mr. Thompson who said they have essentially given UBA money to lend it back to them at a higher rate.

Speaking on Eyewitness News, Mr. Thompson said, “Why would the government of Ghana, give money to a private institution, earn the 10 percent on it and then the private institution turns back and lends it back to government? As an accountant, it does not make sense to me.”

BoG should be able to invest $250 million themselves

He also described as an indictment the fact the money was idling in the Bank of Ghana’s coffers which prompted government to transfer the money to UBA to invest for them.

The Dalex CEO saw no reason why the Bank of Ghana could not invest the money themselves.

“And we have a Bank of Ghana team that has been investing billions of this country’s money that has suddenly been found incapable or unable to invest 250 million dollars – no, it doesn’t make sense,” he noted.

He further explained that this move would have only made sense if, “the Bank of Ghana didn’t have the capacity to invest that money, if this was a decision taken by the Ghana investment and thirdly, if the money was going to be used for something productive.”

Govt didn’t err in $250m transfer to UBA – BoG Governor

Meanhiwle the new Governor of the Bank of Ghana, Dr. Abdul Nashir Issahaku, has dismissed allegations that the Ministry of Finance contravened section (53) of the BoG Act 612 when it transferred 250 million dollars of the 1 billion dollar Eurobond proceeds to a private account.

According to the Governor, government took the cedi equivalent of the amount hence, cannot be in contravention of the BoG law.

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