A witness in the trial of Dr Cassiel Ato Forson, the Member of Parliament for Ajumako-Enyan-Esiam, has indicated that Parliament approved the financing of agreement between Ghana and Stanbic Bank for the purchase of the 200 ambulances.
Emmanuel Edumadze Mensah, the witness, who works as Principal Budget Analyst in charge of exemptions at the Ministry of Finance (MoF), said this in his witness statement filed at the Accra High court.
He said that Parliament approved the purchase of the ambulance on October 31, 2012, and informed the Ministry of Finance in a letter dated November 1, 2012.
The ambulances were to be purchased from a company called Big Sea.
Dr Forson, Mr Sylvester Anemana, a former Chief Director of the MoF, and Richard Jakpa, a local agent, are standing trial for causing €2.37 million financial loss to the state.
They all pleaded not guilty to the charge.
In the witness statement, adopted by the court, Mr Mensah said he had worked with Debt Management Division of the then Ministry of Finance and Economic Planning (MoFEP) between 2004-2015 where he handled issues, including the purchase of the 200 ambulances by the Ministry of Health (MOH).
He said in 2010, the Ministry of Health in a letter signed by Mr Anemana, sought the advice of MoFEP on the acceptability of a financial proposal, contained in an indicative term sheet together with a draft contract from Stanbic Bank, which MoH wished to use in financing the procurement of 200 ambulances.
After consideration of the term sheet, Mr Mensah said that the ministry entered into negotiations with Stanbic Bank as a result of which the ministry made modifications to some of the fees proposed.
On January 24, 2011, the witness said MoFEP indicated its acceptance of the terms of the facility agreement with Stanbic Bank and requested a draft loan agreement to be submitted for approval.
After agreeing on the terms of the credit facility with Stanbic Bank, MoFEP submitted a copy of the agreement to the Attorney-General for advice.
Upon receipt of the advice of the Attorney-General, the witness said the contract was finalised and prepared for submission to Cabinet for approval.
Mr Mensah said later in 2011, MOFEP and MOH submitted a joint memorandum to Cabinet for the approval of a medium-term loan facility of €15,800,000 to seek approval for the loan to be sourced from Stanbic Bank to finance the purchase of the 200 ambulances.
On December 22, 2011, Cabinet endorsed the executive approval of the Stanbic facility and informed MOFEP by a letter dated 20th January 2012.
The witness said the letter also recommended to Parliament to approve the Stanbic facility.
“After receipt of this letter, the Minister for MoFEP then, Dr Kwabena Duffuor, wrote to Parliament requesting Parliamentary approval for the credit agreement between the Republic of Ghana and Stanbic Bank for the financing of the purchase of 200 ambulances.”
The contract provided for the establishment of Letters of Credit (LC) to finance the purchase of the ambulances with the funds from Stanbic Bank.”
In order for LCs to be established, there should be PA approval for the contract, a properly executed contract, and an invoice for the goods to be recipient account.
According to the witness, there should be a designated account from which payment has to be effected.
He said in 2014, when the credit agreement had not been executed, MoFEP received a letter in which Big Sea served notice to institute legal action against the Government for failure to perform the contract.