Ghana’s Finance Minister has explained that unrealistic demands by the China Development Bank forced it to abandon $1.5 billion dollars of the $3 billion loan facility.
In an exclusive interview with Joy News, Seth Terkper said the Chinese are unwilling to re-negotiate the terms of the loan. He said they are insisting on using $85 dollars per barrel as the price to pay back the loan although oil price has gone beyond $100.
This means Ghana will be losing $25 on each of the 750 million barrels to be used to repay the loan.
Government is relying on the facility for several infrastructural projects. Seth Terkper yesterday told Parliament as part of the mid-year budget review that the government will only pursue half of the initial loan amount.
According to government officials’ projections of oil prices, Ghana will end up paying 6.4 billion USD to China for the 3 billion USD loan, or will give away 750 million barrels of the nation’s crude oil to a Chinese company for more than 15 years. The loan agreement stipulates that 60% of all contracts under the loan go to Chinese companies.
The Minority in Parliament has been urging government to as a matter of urgency, re-negotiate the $3 billion Chinese loan.
Dr. Anthony Osei Akoto told Joy News, Ghana has had to cough up $54 million in commitment fees after receiving about $600 million dollars so far.
They had opposed government’s decision to go in for the loan, calling it a “bad agreementfrom day one.”
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