E-levy Used As Collateral For $1billion Syndicated Loan?

Credible sources have hinted  that a US$2Billion syndicated loan facility secured by the Government of Ghana from an international consortium of 8 banks was underwritten by Ghana with the electronic transactions levy (E-levy) as collateral according to mynewsgh.com

The details of the loan which is yet to be laid before Parliament will see the government US$1Billion of the syndicated loan upon the necessary parliamentary approval while the remainder Billion comes later in the year after Standard Bank Group Ltd., Standard Chartered Plc and Rand Merchant Bank Ltd. Of South Africa led the arrangements, according to credible reports.

Deputy Finance Minister, John Ampotuah Kumah earlier said the E-Levy will not be used as collateral for the government’s debt or to secure loans even after the Minister of Roads and Highways, Kwesi Amoako-Atta mistakenly disclosed that the main aim of the e-levy is to get bonds and loans for the country. It appears the latter’s declaration could be the facts.

According to Bloomberg, Ghana raised $750 million through syndicated loans with the participation of about eight African and European banks and $250 million from multilateral lenders with a second tranche expected later in the year after the mid-year review of the budget and taking into account the impact of the electronic transactions levy, oil and food prices, as well as geopolitics.

The government hopes to use this loan to stabilize its finances and financial markets after Ghana lost access to Eurobond markets this year due to higher debt and budget deficit levels, caused by the impact of the coronavirus pandemic and mounting debts which has made Ghana unattractive to investors.

Ghanaians have been expressing alarm over the rising debt of the country with the opposition accusing the government of massaging data on the economy. Ghana’s current debt to GDP ratio is over 80% according to documents shared by the finance minister with Parliament in March this year.