Finance Minister Pulling John Mahama Down

The US$3 Billion CDB Loan Inside Story

Details emerging from the Finance Ministry, reveal that the minister, Seth Emmanuel Terkper, failed to put in place the right place the appropriate management structures to enable the country fully benefit from the 3 billion United States Dollars from the China Development Bank (CDB) loan meant for massive infrastructural development.

Insiders at the Ministry, disclosed to The Herald that the failure of Mr. Terkper to put in place the required structures, left the country securing only US$1 billion of the US$3 billion, because the time for putting in place the structures to access and manage such a huge concessionary facility, had sadly elapsed.

What is intriguing is that currently, the Finance Ministry, led by the egoistic Mr. Terkper, is running around looking for other funds at higher cost to fund the very same projects that could never be started with the US$3 billion.

“Indeed, in the manner of unwarranted bureaucracy and pen-pushing, the Ministry of Finance, has managed to superintend the non-start-up of all the other projects earmarked for CDB financing, except perhaps the Huawei E-Governance project”, insiders have revealed about Mr. Terkper’s administration and economic management style.

Additionally, The Herald learnt that the US$1 billion, which was accessed through the instrumentality of Dr. Kwabena Duffour, was what materialized into Ghana Gas project, and the Chinese are said to be happy about the gas project.

At Ghana Gas, officials have also said that, “it is laughable that any person of right mind would even suggest that Ghana Gas has been the spearhead of delays in securing the CDB facility of US$3 billion. For the record, it is only the Ghana Gas project that was engineered and fully prepared, and to date, is the one project that utilized its allocation of US$1 billion to implement the project”.

Ghana Gas threw a challenge to “any person to call CDB and find out their impression of Ghana Gas and how they have expedited the gas project”, and questioned, “What alternate funds have Mr. Terkper sourced for Ghana Gas? Ghana Gas is awaiting such funds to be so allocated, if they actually exist”.

It rebuffed claims that “Laid back attitude of Ghana Gas Board, led to Ghana’s failure to secure the US$3 billion CDB loan where a chunk was earmarked for the Atuabo gas plant”.

It also denied that “Sinopec experienced several difficulties working with officials of Ghana Gas leading to them downing their tools on several occasions. The Chinese Government is said to have not been enthused by the working culture of the Ghanaian authorities leading to its feet (sic) that altogether stalled the US$3b CDB loan negotiations it took the direct intervention of Terkper to source alternative sources of funds to eventually complete the gas project after the CDB loan negotiations collapsed”.

It said that on November 19, 2014, Ghana Gas heard on radio and television that it was to be made a subsidiary of Ghana National Petroleum Company (GNPC). This was during the reading of the 2015 Budget Statement in Parliament by Seth Terkper.

Ghana Gas, (including the Deputy Chief of Staff who is on the Board), had no notice of this, no discussions about this, no input into this.

Indeed, all drafts of the budget seen by Dr. Valarie Sawyerr, right up to the last evening before the budget reading had no mention of the takeover. It was, therefore, clear on November 19 that it had been ‘smuggled’ into the budget. Obviously, care had been taken to ensure that the Ghana Gas Board, had no notice of it. On December 3, 2014, Ghana Gas, sent a Petition to the President to reconsider the decision.

On December 4, 2014, a statement was released by Seth Terkper, indicating that a transaction advisor Price Waterhouse Coopers Ghana Ltd. had been appointed to ‘assist with the transfer of GoG’s interest in GNGC to GNPC and also to assist GNPC with the successful and effective integration of GNGC.

Again, Ghana Gas, got to know about this through the media on that day. The statement on the appointment of the Transaction Advisor was released on December 4, 2014, and published in the newspapers on December 5, 2014, and not Dec 12 as the Republic claims.

On December 10, 2014, there were articles on and other online sites, indicating that the takeover was complete and that Ghana Gas shares, had been transferred to GNPC.

Again, Ghana Gas, had no prior knowledge of this. It was after this publication on Dec 10, 2014, that the Board of Ghana Gas released a statement signed by the Chairman and dated December 11, 2014.

The Chairman’s statement, was not released after the publication that a Transaction Advisor had been appointed (as published by the Republic).

It was released a week after. On December 8, the chairman of GhanaGas, was informed by the Minister of Energy (and a letter received on the evening of December 8 from the Ministry) that he wanted Ghana Gas Board to meet with him at his ministry the next day December 9 to apologise to them for the way things had been done.

He said, he told the Minister for Finance that he would not continue with the process, unless Ghana Gas had been properly informed and apologised to. The CEO was in Western Region and requested that the meeting be postponed to the next day so he could participate, but the Minister declined.

Eric Yankah, was in the United States of America (USA), Dr. Sawyerr, had a scheduled appointment she could not cancel. Thomas Manu (GNPC’s rep on the Board of Ghana Gas), has not been to a Ghana Gas meeting since January 29, 2014. The Chairman, therefore, attended the meeting with the Board Secretary. It turned out to be an ‘ambush’.

They got to the Ministry to find the following in attendance – Seth Terkper, Alex Mould, Ato Ahwoi, Kyeretwie Opoku, a representative from PWC and a female Board Member of GNPC.

The Minister said that the meeting was to inform Ghana Gas that government had decided to make it a subsidiary of GNPC, and that Ghana Gas shares, had already be transferred to GNPC.

He then introduced the representative from PWC who said a few words. The of Ghana Gas Chairman, thanked the Minister, asked him to reduce what he had said into writing so the Board could act thereon and excused himself.

The meeting lasted for less than 10 minutes. The next morning media reports indicated that Government’s shares in Ghana Gas had been transferred to GNPC, and the takeover complete.

Note that as indicated by the Minister of Energy in that meeting, the shares had already been transferred and the so-called takeover was complete.

Apart from the letter of December 8, and received in the evening of December 8, no other letters were received by Ghana Gas and no invitations for meetings on takeover were ever delivered to Ghana Gas.

Note that after the release of Ghana Gas’s statement on December 11, 2014, the Minister for Energy, showed letters to Joy Fm and Citi Fm (Dec 11 & 12), claiming they had informed Ghana Gas about the takeover. These were all lies.

On Friday December 12, 2014, at 5.53pm, an emissary from Ministry of Energy (called Elorm) was caught trying to leave three letters dated Dec 3, 9 & 10 at the front desk of Ghana Gas with no worker of Ghana Gas present at the desk, since it was after office hours. She was seen by someone who escorted her to the office of the CEO, where a
picture was taken of her and the letters she had sneakily tried to leave at the desk.

Mr. Terkper’s claim that the consolidation of GNPC and Ghana Gas, will make it possible to enhance a more integrated management and continue financing of projects in the oil and gas enclave immediately, was also rubbished.

“This is not only a lie, but an outright attempt to deceive the good people of Ghana as the Ministry and its cohorts at Ministry of Energy & Petroleum and GNPC try so embarrassingly to hide the true purpose of this intended decision, which of course Ghana Gas is ever ready to expose”.

Officials of Ghana Gas, explained that “the true facts of the matter are that GNPC has tied up its cashflows in the Jubilee Field for the next five years because of the 700 million Euros loan it has gone to contract. TEN and Sankofa fields are not yet on stream”.

It went on, “What assets are they going to use to raise funds for this financing of projects that is being referred to? Ghana Gas has completed its tie in and gas is flowing. Indeed, Ghana Gas is currently well-positioned to raise funds for its projects”.

“If the Ministry needs to assist GNPC raise money, it should do so legitimately not under the untruthful subterfuge of creating better structures”.

In any case, why should Ghana backstop the investor, eni, with this level of securitization when the GNPC and the State only needs to ensure that they create the enabling environment for the company to make the investments and then obtain its securitization through the commercial sales of the products over the lifetime of the investment. We
wonder if any one took pains to read the eni agreement to assess the value of the agreement to the nation.

Point 7
The gas infrastructure was originally set up to be under GNPC, but Prof Mills buckled under suggestions from Dr. Botchwey’s taskforce that Ghana Gas should be autonomous from GNPC. Ghana Gas was supposed to have been set up as a public company through a requisite parliamentary endorsement, however Dr. Botchway opted for it to be set up as private company with the Energy Ministry as shareholder.

Only people who did not know Prof. Mills well would allude to him buckling under pressure from a taskforce. The original task force report recommended a GNPC subsidiary so that GNPC could help with the funding in setting up Ghana Gas. But this was rejected by President Mills.

Indeed, Prof. Mills forcefully championed the move to establish Ghana Gas as an independent Limited Liability Company as is the best practice for effectively harnessing and optimizing the gas resources. This was because, by decision, all Gas from the Jubilee Fields and other future associated gas fields would belong to the State. When GNPC and the Ministry of Energy were dragging their feet, he went into one of his rare fits of rage and
ordered the immediate incorporation of Ghana Gas within forty-eight hours.

This was quickly done and the board nominated and sworn in by the Minister for Energy, before
members even had a chance to absorb what was happening.

Point 8
Beneath the veneer of officialdom were much serious personal grudges that led to Dr. Botchway’s bitterness against key officials involved in the turn of events at Ghana Gas. When Dr. Botchway was finance minister in JJ’s regime, he had a brush with Ato Ahwoi and Terkper when the two overwhelmed him decades ago during heated arguments
whether the IRS should be made autonomous from the Finance Ministry. The superior argument presented by Ato and his assistant Terkper overwhelmed Dr. Botchway’s counter argument leading to the eventful divorce of the IRA from the MoF. Dr. Botchwey has since been embittered by that important encounter and has acquired a mutual avoidance of one another. The direct intervention of Terkper and the Energy Minister to source alternative measures to get the gas running inspite of the Ghana Gas board’s ineffectiveness has further bruised Dr. Botchwey’s ego hence his recent outbursts in the media about the takeover move.

Such infantile thinking should be dumped into the trashcan. Anybody who has a good sense of judgment and governance would appreciate that decision-making on a collegial basis creates decision ownership and eventual acceptance as the requisite debates and thought processes are applied to create the needed lasting effect. Attempts to rationalize a bad decision by trying to assert that the resistance to the bad decision emanates from some unrelated fable, from an imaginary situation in the past, can only point to a desperate attempt not only to be stupid but be wrangled and covered with a web of fabricated childish excuses. How stupid could the writer have been!! Ghana Gas wonders if this is truly the excuses given by those named in the story. They need to be pardoned for their crass unworthiness to contribute to the debate.

As for the suggestion that Dr. Botchwey’s reaction to the abrupt and rushed decision of the takeover of Ghana Gas by the almighty and ‘efficient’ GNPC, was borne out of some bitterness over an alleged power struggle two decades ago, it is laughable indeed! It is well known that Mr. Ato Ahwoi’s assistant, Mr. Terkper, remained a close associate of both Dr. Botchway and H.E. Amissah Arthur (then Deputy Finance Minister) in the first phase of the VAT implementation, as Mr. Terkper has been heard to acknowledge publicly in recent times and even went on to give standing lectures for Dr. Botchwey when he taught a course at the Kennedy School of Harvard.

If there is any bitterness in these times of opportunism, it more likely resides in the bosoms of those who feel wounded and upstaged by H.E.’s decision to appoint Dr. Botchwey to lead the IMF negotiations.

Point 9
Recently, Dr. Botchwey was alleged to have mounted an elaborate scheme to the Terkper to lose favour with President Mahama. Part of a grand scheme by certain powerful individuals within government to sneak in former Finance Minister Dr. Botchwey through the backdoor into the finance ministry. The schemers managed to lobby to get Dr.

Botchway into the good books of the President leading to him being successfully nominated by the President to head the NDPC after the demise of PV Obeng. President Mahama also entrusted him to lead the bailout discussions with the IMF that started in September 16th this year.

The lobbyist for Dr. Botchwey who is know for his inherent Presidential ambition capitalized on the spotlight being enjoyed by Dr. Botchwey and has allegedly sponsored media reports that subtly touted him as the antidote to the current economic challenges the country is facing.

His critics argued that he was not exactly the touted panacea for Ghana’s current economic challenges especially given his much-condemned decade old decision to ‘abandon ship’ and tender a shocking resignation as the then Finance Minister when the economy took a critical nose-dive during the later part of JJ’s administration.

Dr. Botchwey did not lobby the President to be made lead IMF negotiator. The truth is that by May 2014, when the National Forum convened in Senchi, the economy was facing severe challenges, with a widening budget, current account deficit and a Cedi in free fall, and economic policy and management was marked by waning policy credibility, there were widespread calls from the public, from development partners, from the IMF and the World Bank and from the international markets for a change in direction.

It is these circumstances that led to the loss of confidence in Terkper and not the scheming of phantom Botchwey lobbyists. It was in these circumstances that the President decided on a Fund Program and chose a team lad by Dr. Botchwey to lead it.

Informed sources at the seat of power confirm that it was not a case of Dr. Botchwey and his lobbyists pressuring the President, but a case of Dr. Botchway being prevailed upon to help. As for the talk of faceless and unnamed lobbyists seeking to smuggle a tireless Kwesi Botchwey back to the Ministry of Finance, it is even more ludicrous.

It is well known that Dr. Botchwey has no such interest and even as leader of the IMF negotiating team, has
remained remarkably quiet and unobtrusive, preferring to let Terkper do the talking to the Public and to Cabinet on the negotiations.

Dr. Botchwey made it clear months ago that he did not want to be Minister of Finance since he thought a younger person should be considered for the position if a reshuffle of the position was being considered. It cannot therefore be true that he is lobbying for this position.

After Mr. P.V. Obeng’s death, Dr. Botchwey was offered the position that P.V. had occupied, i.e., chairperson of NDPC as well as Senior Presidential Advisor. He accepted to chair the NDPC but said he did not need to be appointed to the presidency as Senior Presidential Advisor. He however offered his services freely anytime the presidency
needed to call on him for advice. This is not the attitude of someone clamouring for power!

On the matter of Dr. Botchwey abandoning ship when the economy took a nose-dive, it is the case once again of the accusers bending the facts to suit their purposes.

The economy was not in a nose-dive when, in 1995, Dr. Botchwey resigned. It had, indeed, recovered from election related expenditures that reversed a modest surplus in the run-up to the 1992 election to a deficit. He resigned on grounds of principle. And in any case, what has that got to do with a rushed takeover of one state-owned enterprise by another with money borrowed from a bank?

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