IMANI Africa has waded into the controversial $2 billion bauxite exploration agreement between Ghana and Sinohydro Group Limited of China.
According to the policy think tank, the agreement cannot be described as a loan in its current shape as the Minority in Parliament has sort to describe it.
In the view of IMANI, “The appeal to the IMF by the Minority in Parliament, whilst understandable given the importance for clarity, may well turn out to justify our position. Unless, as we explain, that given the complexity of the deal, the government may have unknown to the country actually entered a loan agreement to actualise the deal. That would be shocking.
“What is also true from an assessment of the ‘term sheet’ is that the Government of Ghana and Sinohydro do intend to enter into a loan agreement. To the extent that Sinohydro hasn’t yet committed to the actual financing in the MPSA, the agreement before parliament cannot be construed as a loan agreement. However, Ghana must enter a loan agreement to keep this deal alive”.
IMANI further pointed out: “Without rigorous attention to every detail, Ghanaian leaders risk bungling these projects (as happened in the past and is happening in other African countries) and Ghanaian citizens would be left carrying the can.
“We may wake up at some point to discover that unless we are willing to tolerate partially abandoned projects or judgment debts, we must activate the advanced payment clause in the master project support agreement (MPSA) for “early work” and, thus, commit to pay substantial sums to properly prosecute any part of our responsibilities under the foregoing agreement.”
Meanwhile, the Minority has maintained the government is being deceptive with its refusal to describe the arrangement as a loan.
“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?” the Minority former deputy Finance minister Casiel Ato Forson argues.
Source: Ghana/Starrfmonline.com/103.5FM
