Can Mahama Untie The $3 billion Knot?

Critics of the government have expressed doubts about the receipt of the full compact of the CDB loan.

They argue that because the conditions attached to the loan are too biting for Ghana to bear, the facility would remain an illusion.

The Minority in Parliament asked the government to abandon the pursuit of the loan or better still, seek re-negotiation of terms which would favour the nation.

China and Africa

China has committed significant financial support to Africa over the last decade. No wonder that country has made a strong economic penetration into Africa, overshadowing traditional powers, including the USA.

Apart from grants, China offers various forms of loans to African countries. Between 2009 and 2012, China provided US$ 10 billion in the form of concessional loans to Africa.

During his visit to Africa earlier this year, Chinese Premier Li Keqiang said Beijing would expand an existing credit line to many African states by $10 billion, to a total of $30 billion.

Loan badly needed

That the government and indeed the entire nation badly need the CDB loan now is an understatement.

The country is going through a critical period of its development, with the economy confronted with some nagging challenges.

The government has not been able to undertake some critical development projects, which were promised during the 2012 election campaign due to lack of funds.

Politics today has become very interesting. People are wide awake, looking at how leaders and political parties fulfill promises they make.

Politicians are aware that on the judgement day ( Election Day), they will be made to account for their stewardship and they could be punished through the ballot box if they fail to meet the aspirations of the people.

Aware of this, and above all, against the background of his determination to get the best for his nation and people, the President is exploring every avenue to galvanise the needed resources to push his development agenda for the nation.

And, without doubt, one of the issues that has attracted attention is the CDB loan.

The facility, targeted at infrastructure projects, has been held back due to a complexity of reasons.

The history of the loan dates back to December 8, 2009, when the bank agreed to provide Ghana with a loan of $3 billion for a package of projects.

In September 2010, Ghana and the CDB signed the framework agreement for the $3 billion loan facility when then President John Evans Atta Mills visited China.

This was followed by a visit in early 2012 by Mr Mahama, the then Vice-President to China during which two subsidiary agreements were signed between Ghana and the CDB for the release of $1 billion of the loan.

Having signed the agreements, the way was cleared for the disbursement of $800 million for the gas infrastructure development project in the Western Region and $150 million for the development of an ICT platform for surveillance of the oil and gas field.

Since then all efforts to get the Chinese to release the remainder of the facility have not been successful.

Consequently, the remaining eligible projects under the loan have been left on paper.

The eligible projects to be founded by the loan include the Western Corridor Infrastructure Renewal Project, which covers the Takoradi-Kumasi, and the Dunkwa-Awaso Railway Line; Sekondi Free Zone Project; Accra Plains Irrigation Project; Coastal Fishing Harbours and Landing Sites Re-development Project at Axim, Dixcove, Elmina, Winneba, Mumford, Senya-Bereku, Jamestown, Teshie, Tema, Ada and Keta.

Others are the Eastern Corridor Multi-modal transportation project, which covers the upgrade of the Volta Lake Ferries, and procurement of pontoons and provision of Landing Sites at Kpandu-Amankwakrom, Kete Krachi-Kwadwokrom, Yeji-Makongo, Tapa Aboatoase, Dzemini, and the upgrade of the Akosombo and Buipe Ports.

These are major projects that have the capacity to turn the lives of the people around when completed. Unfortunately, things have not moved as expected.

New angle

A new angle to the loan as announced by the Finance Minister recently makes the whole arrangement somehow complicated.

Delivering the mid-year review of the 2014 budget to Parliament, Mr Seth Tekper disclosed that he would soon present a request to Parliament to cut the $3 billion loan to half.

And with the President personally going to ‘chase’ the facility in China, before Mr Tekper’s presentation of the request to Parliament, the question will arise as to which of the figures the President will be working with in China.

This notwithstanding, all attention will be on China as the President moves to uproot the issues that have held back the facility.
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