VP Bawumia Clears the Air On Controversial $15bn Sino Cash

All about the Chinese-Ghana deal…

Dr. Mahamadu Bawumia has cleared the air on speculations suggesting that government has borrowed a $15 billion loan facility from the Chinese government. The Vice President who negotiated the deal has used an analogy to make the point that the money is not a loan but a joint venture.

Before the end of June 2017, Ghana signed a $10 billion memorandum of understanding (MOU) with China to develop its bauxite industry. The money was to contribute towards building 1,400 km of a planned 4,000 railway network, which would connect bauxite mines and production sites, as well as establish a rail link into neighbouring Burkina faso.

Shortly after his arrival from a working visit to China, Vice President Dr Bawumia revealed that the Chinese government had committed a sum of US$15billion to help developmental projects in Ghana.

Addressing the media at the Kotoka International Airport, he indicated that, an additional US$4billion was expected in July aside from the $2billion in support of government’s One-District-One-Factory project.

According to the Economic Adviser to the Vice President, Dr Gideon Boako, the government through the agreement will construct the bauxite refineries which will generate enough income to settle the loan.

However, eyebrows have been raised by stakeholders regarding the possible underlying motive behind the deal. More so, many have come up with the notion that the government has borrowed a $15 billion loan facility from the Chinese government.

Speculations were rife that the loan facility thrown to the Akufo-Addo led government by China is just a bait given government’s fight illegal mining popularly known as Galamsey. Furthermore, critics have said that the government has been caught over-borrowing and is adding to the national debt against its campaign rhetoric.

The New Patriotic Party (NPP) government has been the centre of attraction for critics with regards to Ghana’s economy. The word ‘borrowing’ gained much prominence in the country, following the NPP’s intense castigation of the Mahama-led NDC government for the said act. There has been intense attention on how the NPP government will raise money to fulfil its campaign promises, especially after taxpayer funding was ruled out as terribly inadequate.

But VP Dr. Bawumia has attempted to clear the air.

According to the Vice President, the Chinese-Ghana deal was a consensual agreement between both countries to invest 5% of the country’s refined bauxite reserves in order to unlock the 15 billion dollar amount. The VP has indicated that it was a step in the right direction since it would help support Ghana’s railway construction projects among other things.

Dr Bawumia was speaking at a forum organised by the Institute for Democratic Governance (IDEG) on China-Africa relations. According to him, it was a new financing model being adopted by the government as a substitute to the former where monies had to be borrowed to fund projects.

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