$1.5bn CBN loan: Controversial commitment fee successfully re-negotiated

After opposition outcry against the payment of a commitment fee on a loan that has not been fully disbursed, government says this clause in the controversial $3 billion Chinese loan has now been expunged.

Deputy Finance minister Ato Forson revealed, government has been able to re-negotiate the terms, announcing “something good has come out of that”

The China Development Bank (CDB) in 2009, agreed to provide Ghana with a loan of 3 billion USD for a package of projects, the majority of which are related to infrastructural development.  As a trade loan, government pays back with 13,000 barrels of oil everyday for the next 15 years.

There is an upfront fee of 0.25% of the loan and a commitment fee of 1% per year on the undrawn and un-cancelled balance of the loan.

This clause, according to minority spokesperson on finance Dr. Akoto Osei implies Ghana has had to cough up $54 million in commitment fees after receiving about $600 million dollars so far.

The opposition have condemned the loan saying it was a “bad agreement from day one”.

They have urged President Mahama to fly to China as a matter of urgency to renegotiate the terms.

But government has finally announced that the loan has been slashed to $1.5 billion because the Chinese are asking for too much.

Providing further input, Ato Forson revealed on Joy FM’s Newsfile Saturday, government is no longer required to pay for a loan it has not fully received.

Government was to pay $12.5 million commitment fee under the former terms but only paid $2.5m under the new changes.

“So there has been some changes”, which Parliament will soon ratify, he said.

Editor-In-Chief of the New Crusading Guide newspaper, Kweku Baako said government was prompted about the ‘inimical’ terms of the loan and should have listened to “alternative views however critical”.

He found it unfortunate that government was “still rationalizing” its actions when “clearly something was not done properly”. Story by Ghana|Myjoyonline.com|Edwin Appiah|[email protected]

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