According to the centre, the country will require investment in excess of $2.5billion [more than the barter deal] to be able to refine five million tonnes of bauxite.
The African Centre for Energy Policy (ACEP) has predicted that Ghana will not be able to repay its $2 billion barter agreement with China if it relies solely on revenue from the proposed Integrated Aluminum Industry.
Finance Minister, Ken Ofori-Atta
ACEP captured this in a statement it published that analyses the plan as put out by the government.
Background
Parliament in July 2017 approved the agreement between Ghana and Sinohydro Corporation Limited for the construction of priority infrastructure projects.
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Ghana will be required to pay for the infrastructure with refined bauxite.
What ACEP said
But ACEP in its analysis says this is not possible.
Its analysis looks at two instances, one relates whether the bauxite mining company is the same that will refine the bauxite into alumina and the other deals with allowing other investors to take part in mining and refining.
The statement noted that for the first scenario of the bond, only 18% of the amount of $263 million that government is required to pay annually over a 12-year period, can be paid.
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Senario one
Pulse Ghana
“This will mean that the payment of $4.5 billion (2 billion facilities plus interest) cannot be paid with this scheme,” the statement said.
For the second scenario of inviting other investors, despite requiring the same amount of investment ($2.5 billion), ACEP’s analysis says only 5% of the annual commitment will be met, meaning the facility cannot be repaid.
Senation two
Pulse Ghana
ACE, therefore, recommends that “government carries out a cost-benefit analysis and do further public engagements in the matter.”
