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Parliament approves $750m loan agreement

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Parliament has approved a $750 million loan agreement to finance capital and growth-related expenditures in the 2022 budget.

The facility forms part of the government’s international capital market programme (ICMP) aimed at raising funds to finance critical infrastructure projects in sectors such as roads, energy, railways and health, as captured in the 2022 budget.

Proceeds from the facility will also enable the government to meet its revenue projections in the budget and support government’s liability management.

The agreement, which is between the government of Ghana and the African ExportImport Bank (AFREXIMBANK), is also expected to provide the needed foreign exchange to shore up the reserves of the Bank of Ghana (BoG), which have declined from $9 billion to $3 billion.

Per a report submitted by the Chairman of the Finance Committee, Kwaku Kwarteng, who moved the motion for the House to approve the loan yesterday, proceeds from the loan would be applied to finance the Ofankor-Nsawam road ($200 million), the Ejisu-Konongo road ($75million) and the completion of the NsawamApedwa road project ($10 million).

The others are the Suame Interchange and local roads projects ($47 million), the completion of Flower Pot Interchange, LegonAccra ($35 million), completion of the Sofo Line Interchange ($35 million), the construction of the Kwabenya-Peduase road ($10 million) and the completion of the Eastern Corridor Lots 5 and 6 ($70 million).

The rest are the Enkyikrom-Adawso road project ($98 million), purchase of rolling stock and spare parts ($30 million) and the construction of stadia infrastructure for the African Games ($140 million).

Justification for loan Per the report, the credit facility had become necessary because of the decision by the government not to use the capital market to raise financing until market conditions improved.

Additionally, it said the increasing withdrawal of non-resident investors in Ghana’s domestic bond market, with its implications for the level of reserves of the BoG and foreign exchange management, generally required the injection of additional foreign currency to shore up the country’s reserves to enable it to meet its obligations when they fell due.

“The withdrawal of non-resident investors in the domestic bond market means that the government will need to adopt other innovative means to mobilise fi nancial resources to support the implementation of the 2022 budget and finance liability management operations,” it said.

The report noted that the government’s total foreign financing requirement for 2022 was estimated at $1.45 billion (equivalent of GHÐ9.09 billion), comprising exceptional financing of $700 million from the $1 billion International Monetary Fund’s (IMF’s) special drawing rights (SDR) allocation — which has been secured — and foreign financing of $750 million to be raised through the ICMP, with an option to raise a further $750 million for budget support and liability management.

The financing requirements were provided for in the 2022 Budget Statement and Economic Policy of the government. This means that the approved budget authorised the government to raise foreign financing of up to $1.5 billion to support the implementation of the 2022 budget.

Importance of facility

Per the report, the Minister of Finance explained to the committee that the approval of the facility was urgently needed to avoid the country going bankrupt.

“The minister indicated that the government had, over the past recent years, accessed financing from the international capital market and the domestic bond market to support the implementation of its budget.

“However, the international capital market is not available to Ghana this year as a result of the downgrade of the country’s credit rating by international rating agencies,” it quoted the Finance Minister as saying.

The report further explained that the government’s intention to raise funds from the domestic bond markets did not also yield the desired result.

“Consequently, the economy is presently challenged with rising inflation, rising interest rates, exchange rate depreciation and increasing energy cost.

“These challenges are further exacerbated by the rapidly dwindling reserves of the BoG, which have declined from $9 billion to about $3 billion,” it said.

“With a monthly demand of over $600 million, the reserves of the central bank may be exhausted in a few months if urgent steps are not taken to shore up the country’s reserves,” the report said.

Maturity of debts

Per the report, the committee noted that a significant proportion of Ghana’s debt would fall due in the early part of 2025 and 2026.

According to the 2021 debt management report issued by the Ministry of Finance, about $3 billion would fall due in the first quarter of 2025 and 2026.

“However, the MoF has not put in place any measure to make available resources to retire the maturing debt, thereby setting the country on the path of default in the next two years,” it said.

Debt sustainability

Although he supported the motion, the Ranking Member of the Finance Committee, Dr Cassiel Ato Forson, raised concern over Ghana’s debt sustainability.

He said per data made available by the Ministry of Finance, the country recorded total tax revenue of GHÐ12.9 billion in the first quarter of this year.

Of that amount, Dr Forson said, debt service obligations alone, made up of interest payments and amortisation, amounted toGHÐ13.9 billion.

“Mr Speaker, this simply means that total tax revenue is not enough to service Ghana’sdebt, and this calls on all of us to come together and work in a way to ensure that our country turns back to debt sustainability levels,” he said.

Kubidyza is a Global Celebrity Blogger, Music Promoter and a Social Media Influencer | Most Influential Blogger In Ghana For Bookings: Kubinho80@gmail.com

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Elon Musk accuses Twitter of fraud in countersuit

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Elon Musk has accused the social media platform, Twitter, of fraudulently holding back information about the company as part of a countersuit.

The countersuit by the billionaire and Tesla CEO alleges that Twitter committed fraud, breach of contract, and violation of a securities law in Texas, where Musk lives.

Musk’s counterclaims were filed confidentially last week and unsealed in a filing late Thursday at the Delaware Chancery Court.

Musk offered to buy Twitter earlier this year, then tried to back out of the deal by claiming the social platform was infested with a larger number of “spam bots” and fake accounts than Twitter had disclosed.

Twitter sued to force him to complete the acquisition. Musk responded by filing his countersuit.

Musk’s attorneys argue in the countersuit that Twitter “misrepresentations or omissions” distorted the company’s value and caused Musk to agree in April to buy it at an inflated price. They said Twitter’s own disclosures revealed that it has 65 million fewer “monetizable daily active users,” who can be shown digital ads, than the 238 million that Twitter claims.

The filing also said most of Twitter’s ads are shown only to a sliver of the company’s user base.

Musk’s team also accused Twitter of making too many major changes in recent months without consulting Musk, including personnel decisions and allegedly disobeying social media restrictions imposed by the government of India, which is Twitter’s third largest market. Musk had pledged to make Twitter a haven for free speech but has also said it must comply with the local laws where it operates.

In an unexpected twist, Twitter filed its response denying Musk’s accusations before Musk’s own counterclaims surfaced.

Twitter called Musk’s reasoning “a story, imagined in an effort to escape a merger agreement that Musk no longer found attractive.” The company, in particular, took issue with Musk’s estimate of fake accounts, saying the analysis relied on a “generic web tool” that designated Musk’s own Twitter account as a likely bot.

“The result is a distortion that Musk is hoping will nonetheless make waves,” Twitter’s response said.

The case is scheduled to go to trial on October 17. The Delaware court handles many high-profile disputes between businesses, such as Twitter, that are incorporated there.

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Adinkra Pie CEO and Anita Sefa Boakye expecting their first child

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A few weeks after their rumored divorce, the CEO of Adinkra Pie, Barima Osei Mensah, and his wife, Anita Sefa Mensah, were spotted out in public.

The couple shamed their detractors and haters as they subtly revealed to the public that they are expecting their first child as a married couple in a new heartfelt video that has surfaced on the internet.

Anita Sefa Boakye’s baby bump is clearly visible in the video, and a background voice can be heard hyping the couple and hinting that something significant is on the way.

The hype man also instructed Anita Sefa and her husband to embrace in order to humiliate their adversaries who support the dissolution of their union.

Barima Osei Mensha and Anita Sefa Boakye were branded a ”celebrity couple” after they shot into the limelight due to their glamorous wedding in 2021.

The couple has since had media lenses and public eyes on their marriage, and recent hearsays had it that their young marriage had hit the rocks which were later found out to be fake news.

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Legon: Residents of Mensah Sarbah clash with Commonwealth hall residents

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After residents of two halls got into a fight and some property was damaged, the University of Ghana was once again in the news.

The cause of the fight is currently unknown, but according to an unconfirmed report, a resident of Mensah Sarbah Hall visited the commonwealth hall, also known as the Vandals hall, and was attacked there by some vandals.

He hurried back to his hall while fuming and called for reinforcements, who joined him in storming the Vandals’ hall.

This sparked a significant altercation between the two halls, which resulted in the destruction of some campus properties.

A car on campus which was parked in front of Mensah Sarbah hall was also burnt by the angry students.

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