After five postponements since it was first introduced to Parliament on May 4, 2010, the controversial $1.5 billion loan agreement was finally debated in Parliament on Wednesday, July 14.
The Minority punched a lot of holes in the agreement which showed that Government and STX had been most incompetent in presenting the deal for approval.
The major question yesterday, first asked by Dr Anthony Akoto Osei, the former Minister of Finance & Economic Planning, was this: Who is the lender? Or, who is the source of funding?
The Deputy Minister of Finance & Economic Planning, Seth Terpker answered by looking at the agreement before the House that the lender is STX Engineering & Construction Ghana Ltd.
This got Joe Ghartey on his feet who stated that by the laws of Ghana, STX is not registered as lender and would therefore be illegal for Parliament to approve a loan with a company that was, in the words of Mr Albert Kan Dapaah, not licensed by the Bank of Ghana as a lender.
"As we sit here, we don't know the source of the money. STX is not a licensed lender. Is the money coming from a barbershop or a khebab seller?" Mr Ghartey, the former Attorney-General posed the question.
The Government of Ghana entered into a joint agreement with STX for the construction of 200,000 houses at a total cost of $10 billion. Government of Ghana has committed to an off-take agreement for 90,000 units at an estimated total cost of $4.5 billion. The suppleir's credit facility is for 30,000 units, out of the 90,000 to be constructed at a cost of $1.525, 443,468 (including an insurance premium).
The debate became farcical when the Minority showed that the agreement was, at best, not ready for approval. "All information must be given to the House," Dr Akoto, who set the debate off, stated.
Dr Akoto expressed surprise that although this was the single largest loan ever contracted by Government, the $1.5 billion is only a part of an off-take agreement for a larger sum and number. The Minority therefore requested for both the joint agreement and off-take agreement to be made available to the House before they could continue to debate the matter.
He asked the Finance Minister, who was present in the House, to explain why Government has agreed to pay an insurance premium of $250 million on the loan when the lender is also requesting a sovereign guarantee.
"This is historical. It has never happened that you give insurance and sovereign guarantee," Dr Akoto, who spent eight years at the Finance Ministry with specific duties on loans.
The House was adjourned for Government to provide the parent agreements requested.