Prof. John Gatsi, Economics Lecturer, University of Cape Coast
About five months ago, Ghanaians were not comfortable with the manner in which the $2.25B bond was issued as it was not issued in conformity with the guidelines for public borrowing and Article 181 of the 1992 Constitution.
A citizen, in his private capacity, reported the matter to CHRAJ for investigation regarding conflict of interest and related matters.
The general finding by CHRAJ is that the respondent (the Minister of Finance) is cleared of conflict of interest allegation. However, CHRAJ has made a great revelation on potential conflict of interest (refer to the observation subtitle in the report). It is stated by the commission that the Minister of Finance is a former director,shareholder and beneficial owner of several companies in the securities market and his interest to see them grow has the potential to conflict with the interest of the state.
This is a serious observation that should attract the interest of government and parliament as potential risk alerted by a constitutional body like CHRAJ is great enough to affect the securities sector.
Another revelation by the commission is on breaches and violations of the Public Financial Management Act. It has been established by CHRAJ that the issuance of the bond breached the rules and that the Minister did not comply with the processes in the issuance bonds.
A case of unfair advantage was also levelled against the banks that doubled as primary dealers and joint book runners. These unfair advantages were taken by primary dealers defeating transparency requirements.
As revealed, the Minister did not comply with section 56(1) of the Public Financial Management Act, 2016 (Act 921) “the terms and conditions of all government borrowings shall be laid before Parliament and shall not come into operation unless the terms and conditions are approved by a resolution of Parliament in accordance with article 181 of the Constitution.
IMPLICATIONS
CHRAJ has raised very sensitive and serious issues that demand immediate attention by Parliament, Securities and Exchange Commission and the Government of Ghana. There is the need to immediately deal with the potential risk exposure of the state because of the potential conflict of interest of the standing of the current finance Minister.
CONCLUSION
Conflict of interest cleared but potential conflict of interest remains. Conflict of interest cleared but breaches and violations of Public Financial Management Act and Article 181 of the 1992 Constitution remain. Conflict of interest cleared but weightier matters have emerged.