An ace Ghanaian broadcaster, has expressed his surprise and anger at the government, for constantly employing the services of a company co-founded by the Finance Minister, Ken Ofori-Atta; Data Bank Financial Services as advisors for some of Ghana’s international loan transactions.
Kwasi Kyei Darkwah (KKD) suggested that, it may be the reason the country keeps borrowing for the Finance Minister, who is a cousin of President Nana Akufo-Addo, to make money and get rich at the expense of the state and everyone.
This, he insisted, is a habit which cannot be allowed to continue, adding this is heartbreaking.
Speaking on GTV’s Breakfast Show on Wednesday, August 17, he lashed out at Parliament for keeping quiet about such an issue, insisting the legislators have failed the country and its citizens.
The Herald had in June, reported how the Finance Minister, appeared incentivized by what his private company, Databank, is making from the back of the state to be in the financial market, by raising money through bonds both locally and internationally.
The Herald, has obtained figures, showing that Ken Ofori-Atta’s Databank, has made a total of GH¢ 159.3 million, from the state by virtue of being a book-runner on government’s bonds in a clear case of conflict of interest situation.
According to the breakdown, Databank since 2017, when Mr Ofori-Atta, was made Finance Minister, has been making money, playing the role of a transaction advisor anytime the government runs to the financial market in search of cash through bonds, including Eurobonds.
KKD charged “I read a report yesterday that broke my heart. I saw how much Ghana owes, but I also found that apparently, the minister of finance’s company or former company, is the transaction advisor to the monies we borrow.”
“So, as Ghana gets poorer, the minister of finance’s company or former company gets richer.”
“Is this what we want to continue in this country? Do we want to elect people into office, give them their pay and perks and then allow them and their friends and their companies or their former companies to be the very beneficiaries of the woes of our country?” he said.
“But this is not only about the Minister of Finance. It is about Parliament. Parliament, you must be ashamed of yourselves. You have failed the people of Ghana. Because I don’t think from the time of Nkrumah to date, whoever is the Minister of Finance, should benefit every time our country goes to borrow money. Is that what happens to everybody in this country? What precedent are we setting?
Upon reading about this and as a result of disbelief, he “called four different people, some in civil society, some in government and some in the former government, but they said this is general knowledge. It is general knowledge and Parliament thinks, is it okay? So whoever wins the next election, will also set up their own companies and be the transaction advisors when we go and take a loan? What is wrong with us as a people?
“So the person’s motive for going for a loan, for me now, is not clear, because every time we take a loan, their companies make money. Does it make sense to us as a people?
“We have leaders of industry, some who have been deprived of their finances and in the meantime, the people who are sitting power are stealing us blind and all people can tell me but this is general knowledge. What sort of stupidity and buffoonery is going on in this country? What a shame? What a damn shame?
“When they are out of power, will they want whoever comes to power to repeat what they are doing? This is not NDC, NPP. Parliamentarians, you’re supposed to help us protect the public purse. You can’t just go and sit there and vote I am NPP, I am NDC. Vote your conscience, vote your constituents’’.
Asked what he was expecting from the MPs, KKD responded that he expected them to say that no one can take loans, when one is the transactional advisor and Minister of Finance, adding “how is that possible. They are the legislators, if they won’t speak about it for the whole country, ….but for me taking time to read this much, over the weekend and yesterday, I wouldn’t know the details of this. So now go and bring all the loans we have taken, show us all the transaction advisors and see whether they have links to the presidency or the people who are the ministers or people who are in the legislature. Why are we doing this to ourselves?
So those of you in government, you’re the only ones who want to be rich? Everyone else must suffer so that you can be rich. What kind of nonsense is that?
He admitted in the affirmative when asked if he was talking about conflict of interest and questioned the whereabouts of Commission On Human Rights and Administrative Justice (CHRAJ), adding “right now in Ghana, each for himself, God for us all”.
KKD, recalled speaking recently to one of his staff who lamented about the cost of LPG for saying a 14 kilogram cylinder was going for the GHc152 from a salary of GHc1, 400.
Now water is going up, electricity is also going up and people who have been put in positions of authority are raping the country why, why? How much money do you need? You’re leaving it for your children. Your children know you’re doing this, and your children will go and tell other people’s children that their father didn’t live an industrious life because you were stealing from the people. So those people whose parents didn’t steal from the people will be suffering and your foolish children will come and tell those whose fathers did not steal that they have not lived well. No, their fathers did not steal money”.
And people don’t want to talk about it because they will impoverish you. Hey if no one kills you, you will die your own natural death.
KKD, who also spoke about Ghost name, said much as they are bad, they are not worse than the conflict of interest, adding “there are things that are bad but these things are being committed by the people that we have elevated into positions of authority to be our guardians, servants and through they serving us, we elevated them even higher but are they serving us or themselves, their friends and the children. What foolishness is this?
Referring to actor Oscar Provencal, who was his co-panelist on GTV’s Breakfast Show on Wednesday, KKD said he thought what was happening was only known to a few but was surprised that Mr. Provencal revealed he was aware about it.
KKD lamented about the failure of the Ghanaian media to make this an agenda for discussion although it was crucial and must be discussed.
Why, so you serve at the presidency and you give yourself a contract? You give your work that everybody doesn’t have and expertise anymore because once you serve with the presidency all of sudden you know everything and everybody else in Ghana, is utraquapidarian
Meanwhile, Databank has had cause to, over the past years distance itself from accusations of conflict of interest in government transactions.
In June 2021, the company reiterated that Ken Ofori-Atta, resigned as Executive Chair of the bank in August 2012, and “resigned from all the Databank Boards in February 2014.”
The country’s current total debt stock hit GH¢391.9 billion as of March 2022, per data from the Bank of Ghana.
Fitch Solutions has said that Ghana’s public debt will continue to rise to cover large deficits in the coming quarters.
It also forecasted total public debt to rise from 79.0percent of Gross Domestic Product in 2021 to 83.0percent in 2022.
Subsequently, the debt-to-GDP ratio will hit 84.5percent in 2023.
“As Ghana has effectively been cut off from international capital markets, the country will have to rely on domestic debt issuance over the short term”, it said in its monthly report.
It added that Ghana’s domestic debt market is relatively shallow and banks are already highly exposed to government debt.
“As such, a rise in domestic debt issuance over the coming quarters could crowd out the private sector, weighing on growth”, it pointed out.
It, however, concluded that Ghana’s public expenditure will fall to 23.8percent of GDP, from 25.2percent in 2022, in line with the government’s medium-term fiscal consolidation objectives.
The GH¢ 159.3 million, is not part of the money the Databank made on the Agyapa Royalties transaction among other similar deals.
It also doesn’t capture transactions his Enterprise Insurance company has gotten through insurance cover provided for certain state deals in arrangements, which had seen other insurance companies, including state-owned SIC, been knocked off the radar. It also doesn’t capture monies made from the state by his funeral home Transitions, including the handling of people who died from the COVID-19 virus.
The sister companies of Databank, which have profited from state deals, have since relocated to a 10-storey building erected into the skies of the city christened “Advantage Place”. It is located at 23rd Mayor Road, Ridge West, Accra near the Greater Accra Regional Hospital, also known as the Ridge Hospital.
While in 2017, when the state raised GHC18.30 billion, Databank made GHC30 million, in 2018, when the state raised GHC24.37 billion, Databank made GHC12.30 million.
In 2019, when the state raised GHC25.48 billion, Databank made GHC11.83 million and in 2020, when the state raised GHC35 billion, Databank again made GHC20.40 million.
In 2021, when the state raised GHC103.62 billion, Databank made GHC 85.37 million.
All the figures put together, showed that a total of GHc 159.3 million, has been made by Databank alone.
The numbers were obtained from Ken Ofori Atta’s answers to a question by Theresa Lardi Awuni, the National Democratic Congress (NDC) Member of Parliament (MP) for the Okaikwei North Constituency in the Greater Accra Region, about how much government bonds have been issued since 2017 and how much transaction advisors earned as fees.
The Finance Minister told Parliament that “in 2017, total amount of the GHc17.3 billion in 3, 5,7,10 and 15-year local currency government bonds and US$221.4 million in domestic USD-denominated government bonds was raised from the domestic market with the assistance of the Joint Book Runners (JBRs) The cedi equivalent of US$221.4 million converted at the exchange rate of GHC4.5 to US$1.00 amount to GHC1 billion brings the total amount raised in 2017 to GHC18.3 billion from the issuance of government bonds.
“An amount of GHC30.41 million was paid to each JBR totaling GHc91.24 million in 2017 which is 0.5 percent of the total amount raised.
According to Mr Ofori-Atta, “in 2018, government, after the first mandate of the JBRS had expired, selected five firms namely; Barclays Bank Ghana, Databank, Fidelity Bank, IC Securities and Stanbic Bank Ghana as the new JBRs through an evaluation process. The decision to increase the JBRs to 5 was in response to the deepening of the market and the need to increase the marketing and the selling of the GoG bonds across a wider investor base.
“Government raised a total amount of GHC10.57 billion in 2,3,5,7 and 10-year local currency bonds through a combination of new issuances and bond re-opening/Tap-ins. Amount of GHC52.85 million was paid as fees to the JBRs, where each received GHc10.57 million in 2018. This was approximately 0.5 percent of the amount raised.
“Mr. Speaker, in 2019 a total amount of GHC9.88 billion in the medium to longer dated bonds was raised. A fee of GHC9.88 million was paid each JBR totaling GHC49.42 million for the JBRs engaged in 2018. This makes 0.5 percent of the amount raised.
“In 2020, the 5 BJRs executed 20 new transactions across the 2-year to 7-year tenors and re-opened the 20-year bond. These transactions cumulatively raised about GHC16.6 billion in local currency government bonds, and US$388.9 million in domestic USD-denominated treasury bonds. A total amount of GHC18.83 million totaling GHc94.14 million, which constitutes 0.56 percent of the total amount raised.
“The performance of the JBRs was against the backdrop of a seriously challenged macro-fiscal environment and tighter financing condition induced by the COVID-19 pandemic which muted offshore demand for local currency issuances leaving local investors to take up a large proportion of the year’s Treasury’s financing operations.
“In May 2021, based on the new Primary Dealers (PDs) and Bond Market Specialists (BMS) Guidelines, government selected new PDs out of which, nine (9) institutions were given the mandate as BMS to be in-charge of the book-building process.
“The nine institutions were Stanbic Bank, Ecobank , ABSA Bank, GCB Bank, Cal Bank, Fidelity Bank, IC Securities, Databank, and Blackstar brokerage. From May 2021 to December 2021, they raised a total amount of US$13,818.73 billion in 2-year to 7-year bonds, 10-year bond and tap-in of a 6-year bond. They undertook a 5-year US Dollar Bond of US168.98 million.
“Mr. Speaker, on the external front, government in 2017 did not embark on any Eurobond transaction. However, government in 2018 procured the services of the under listed transaction advisors to raise an amount of US$2.0 billion in a 10-year and 30-year Eurobonds; four (4) International Lead Managers (JP Morgan, Bank of America, Citi Bank and Standard Chartered Bank), three (3) local transaction advisor (Fidelity bank, Databank and IC securities).
“Mr Speaker, the four (4) International transaction advisors procured were each paid US$2,030,513 whiles each of the three (3) local legal advisors each paid US$90,000.00. The International Legal advisor was paid US$379,159.24. The total amount paid to the transaction advisors (foreign and local) was US$9.98million, which is 0.49 percent of the amount raised.
In 2019 and 2020, Government raised a total of US$3.0billion in each year. From 2019, Government took a proactive stance to build the capacity of domestic financial institutions with exposure and skill for future active roles in Eurobond transactions. In view of this, Government for the 2019 and 2020 transactions procured the services of three (3) local co-managers (Fidelity, Databank, and IC Securities) and two sub co-managers (GCB and SAS Investment). For the issuance, they worked alongside the five international lead managers, White & Case as the international legal advisor, JLD $MB and CQ Legal as the local advisors.
“Mr Speaker, the five () International transaction advisors procured were each paid US$1,555,000 whiles each of the three () local transaction advisors were paid US$375,000. Each sub co-manager was paid US$50,000. The International Legal advisor was paid US$399,661.94 and the two local legal advisors, each paid US75, 000.00. in all, a total of US$9.55 Million and US$9.7million was paid International transaction advisors, sub co-managers and the local legal advisors in 2019 and 2020 respectively, which is 0.3 percent of the total amount raised in 2019 and 2020.
“Mr Speaker, Government once again for 2021, took a proactive stance to procure all the necessary transaction advisors (International Joint Lead Managers (JLMs), Local & Legal Advisors) required for the Eurobond programme.
The five (5) International Joint Lead Managers procured were Standard Chartered Bank, RMD Bank, Standard Bank, Bank of America and CITI Bank. The five (5) local transaction advisors procured were, Fidelity Bank, Databank, IC Securities, Temple Investment and Cal Bank. White & Case was procured as the International Legal advisor whiles CQ Legal and K&K Legal were procured as the two (2) local advisors. The five (5) International Joint Lead Managers were each paid US$1,497,375.00, the five (5) local transaction advisors procured were each paid US$166,375.00, the International legal advisor was paid US$375,000.00 whiles the tow 2) local legal advisors were each paid US$75,000.00 to raise the total amount of US$3,025,000.00. In total, the International and local transaction advisors were paid US$8,843,750.00, which is 0.29 percent of the amount raised.
