The Minority in Parliament has called on the government to stop confusing the public and accept that the $2 billion bauxite deal is a loan and not a barter deal.
In a statement issued by the NDC Member of Parliament (MP) for the Ajumako/ Enyan/ Essiam Constituency in the Central region Casiel Ato Forson explained that the arrangement being used by the current government is similar to the $3 billion petroleum-based China Development Bank (CDB) loan agreement the country went for when it wanted to build its gas infrastructure.
“Sinohydro is borrowing from International Commercial Bank of China (ICBC) to fund the infrastructure projects for GoG [Government of Ghana], adding that “Sinohydro, therefore requested for a Letter of Support from the Government of Ghana as a Sovereign Guarantee.”
“With the letter of support, Sinohydro then assigns all its rights and obligations under the arrangement to ICBC. Is Ghana so unattractive in the capital market as to fall on a Chinese company to front for us in borrowing from the International Commercial Bank of China (ICBC) which we have done business with in the past?”
“Mr. Vice President, you and I know that in conventional practice, a Letter of Support as a Sovereign Guarantee is only required in loan transactions and not in barter arrangement.”
The statement added that “the attempt to confuse the issues is understandable since the NPP vociferously rejected this structure while in opposition.”
The USD2billion worth of infrastructure would be in exchange for alumina processed from Bauxite deposits in the country as announced by Finance Minister, Ken Ofori Atta in the mid-year Budget Review.
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The Deputy Information Minister Kojo Oppong Nkrumah and the Deputy Roads and Highways Minister Anthony Karbo argued that the deal is a bold decision by the Akufo-Addo administration to tackle the country’s infrastructural deficit.
Meanwhile, the Minority wrote to the IMF last month asking for its opinion on whether the agreement between the government and Sinohydro Corporation could be classified as government debt under Extended Credit Facility programme, and if it could also contribute to the debt stock.
IMF’s Ghana Representative Natalia Koliandina acknowledged the receipt of the letter and said that even though the definition of government debt in the Technical Memorandum of Understandings has not changed, since the inception of the program, the IMF needs time to properly comment on the Minority’s request.