Ghana’s Finance Minister Seth Terkper has challenged NPP’s vice presidential candidate, Dr. Mahamudu Bawumia to read wide and stop resorting to propaganda to confuse the public.
Mr Terpker was responding to Dr. Bawumia’s assertion that government had directed about $250 million of total proceeds from the $1 billion Eurobond it issued in 2015 to a private bank and had turned around to borrow from that account at high interest rate at the expense of the tax payer.
Dr. Bawumia told a gathering of students at the Accra Polytechnic last Thursday that the diversion of the amount was for political gains.
Terkper said: “Why is he advocating that we should continue keeping the money in the Central Bank for it to continue earning zero interest? Is that prudent?”
Terkper quoted Section 21 of the Financial Administration Act to back his argument. He noted that Dr. Bawumia was either exhibiting sheer ignorance or deliberately misleading students of the Accra Polytechnic whom he addressed.
“What we are doing is by law and under the Ghana Infrastructure Investment Fund, something that the board of the GIIF has been empowered to do in addition to the powers of the Minister to invest public funds. In any event, the GIIF is a fund created and the Financial Administration Act makes a clear distinction between those funds and the core Central Bank money,” Terkper told Accra-based Citi FM.
According to Terkper, Dr. Bawumia as a Central Banker must know better and not limit himself to only the Banking Act in drawing his conclusions. He asked him to go back and look at what Mr. Terkper termed, “the full range of the law because the management of the economy is a complex one.”
In response to claims that government borrowed money from the Commercial Bank where the $250m was deposited at a higher interest rate amounting to financial loss, Mr Terkper asked: “…Under previous regimes, such monies were not invested and government earned zero. Is that financial loss?”
He challenged Dr. Bawumia to compare that policy to the current situation where those funds have been moved in line with the existing law for the funds to earn interest, which has so far yielded 23 million Ghana Cedis and concluded by asking which policy was more prudent.
“Does Dr. Bawumia want me to continue to keep the tax payers money in commercial banks for them to be using and earning interest or can I also invest part of that money and earn some interest because I am secluded from investing in the Treasury Bill which is what we want Parliament to reconsider. I can invest in other instruments as the law requires…And so if I invest and I earn 10 percent or even 12%, are we not better off from zero? Why is he advocating we keep the money at the Central Bank to keep earning zero? Is that a prudent way of managing the economy?” Terkper queried.
He condemned Dr. Bawumia for peddling a “technically deficient” statement about proceeds from Ghana’s $1 billion Eurobond and challenged him to review his notes to come to terms with facts he had failed to research.