Govt yet to retrieve Ghc17.1bn from SOEs, private companies

A report of the Finance committee in Parliament has disclosed that the government is yet recover an amount of GH¢17.1 billion which it on-lent to state owned enterprises and private companies.

The amount also consisted of Export Guarantee Department facilities.

Out of this amount, GH¢2.98 billion were arrears mainly from on-lent loans provided to SOEs.

The committee in its report on the annual public debt management report for 2019 noted that during the year under review, a total recovery of GH¢7.6 billion was made from two private companies, namely Ghana Rubber Estates Limited and Accra City Hotels.

The committee was assured that the Ministry of Finance was putting in place tighter measures to help ensure that the state recovered all the loans.

Public private partnership

The committee was informed that the government was working to pass a law to regulate public private partnerships in the country.

It noted that even though PPAs had proved to be very useful, they had become a source of fiscal risk because of the contingent liabilities arising from the issuance of government guarantees in support of the PPP projects.

Currently, a number of contracting authorities, including MDAs, are in the process of developing various PPP projects, most of which are at the pre-investment stage awaiting commercial closure.

The committee was of the belief that the passage of the law would therefore help streamline these agreements and reduce the associated fiscal risks.

Liability management operations

The committee was also informed that for 2019, government put in place a number of broad range of non-distressed, market-sovereign debt transactions to secure funding, reduce the debt portfolio profile and address the debt portfolio risks.

One of such measures was the government replacing high interest-bearing paper in the portfolio with less expensive paper.

In furtherance of this, an amount of US$1.12 billion of the Eurobond proceeds was used for liability management operations.

Out of this amount, a buyback of US$283 million of the 2023 Eurobond was carried out and this has reduced the outstanding stock of the 2023 Eurobond from US$1 billion to US$717 million.

On the domestic front, US$843.9 million used for further liability management operations in domestic debt market. The remaining amount was lodged in the sinking fund.

In 2019, a total amount of US$3 billion was raised in three tranches of 7-year, 12-year, and 31-year Eurobonds of US$750 million, US$1.25 billion, and US$ 1 billion, at a coupon rate of 7.88 per cent, 8.13 per cent, and 8.95 per cent, respectively.