Business News of Friday, 28 September 2018
The Minister for Monitoring and Evaluation, Dr. Anthony Akoto Osei, has stated that government will speed up negotiations on the two billion dollar SinoHydro bauxite deal, following the International Monetary Fund’s (IMF) rejection of the Minority’s request to classify the deal as a loan.
Speaking to Citi News, Dr. Akoto Osei maintained that the clarification entrenches government’s position that the deal is a good one.
“We met with the missions with the IMF and from what the leader told us, as far as they are concerned, the agreement they have seen does not constitute a loan because government is not guaranteeing it. She was very emphatic. That is how the whole thing was structured.”
“The important thing is where the bauxite plant can be put in place to be able to process it so that at the time of payment, we will be able to pay. I cannot speak for the NDC, but government is going to go ahead to process the other papers on the deal.”
The Minority, through its leader, Haruna Iddrisu, wrote to the IMF seeking clarity on whether the 2 billion deal amounts to a loan, or was a barter arrangement.
NPP Member of Parliament for Bantama Constituency, Daniel Okyem Aboagye, in an interview with Citi News said the IMF’s legal department in Washington DC after carefully studying the petition rejected the Minority’s request to stop the Akufo-Addo government from going into the agreement.
“At the end of the day, we are all vindicated. Our friends in the NDC thought it was an easy thing to say it is a loan …They took it [agreement] to [IMF’s legal department in Washington DC] and after a month they brought it back. Bottom line is that it is not a loan.”
Details of petition
The Minority, in the letter, written to the IMF dated August 10, 2018, asked the international body to stop the Akufo-Addo government from securing the facility which is aimed at helping the government undertake a robust infrastructural development in the country.
The opposition NDC said under the current agreement with the IMF, and the fact that an agreement with such a quantum of money could adversely affect the country’s debt stock, the IMF should as a matter of urgency, stop the Akufo-Addo government from going into the agreement with the Chinese entity.
Haruna Iddrisu addressed the letter to Natalia Koloadina, resident representative of IMF for Ghana.
‘NDC’s petition is in bad faith’
However, a Deputy Information Minister, Pius Hadzide in an interview with Citi News said the move was in bad faith.
According to Hadzide, the Minority MPs could have used other available avenues to have their issues addressed instead of writing to the IMF.
“There are opportunities and avenues that are available if there are any clarity that anybody or institution may want to seek. These matters were properly brought before the Parliament of Ghana and got approval and so for you to go behind the Parliament of Ghana and write to the IMF in an attempt to have them pull the brakes on the $2billion agreement describing it as misguided and illegal, for us in government the action is in bad faith and it is very disappointing that we would want to do this to ourselves.”
The Deputy Information Minister said the Akufo-Addo government has a number of plans for the $2 billion facility with regards to infrastructure, and thus accused the Minority of trying to sabotage government with its letter to the IMF.
“This deal is going to be dedicated to several infrastructural projects including the Tamale interchange. We are going to build an ultra-modern national psychiatric hospital, the railway lines are going to be affected, industrial parks, housing for the security services, social housing, district hospitals and a host of other projects. From what we see, it looks like a clear and deliberate attempt by the Minority to want to pull the brakes on that and make government work in that regard difficult,” Hadzide added.
About the $2 billion bauxite deal
Parliament in July 2018 approved a Master Project Support Agreement facility for the construction of priority projects in Ghana by Chinese firm, SynoHydro Corporation.
The passed agreement means Ghana will leverage its bauxite reserve for the amount from China.
$460 billion bauxite reserve
Ghana’s bauxite reserve is estimated at $460 billion.
Finance Minister, Ken Ofori-Atta, while presenting the mid-year budget review in Parliament in July 2018, complained that, currently, Ghana has an infrastructure deficit of about $30 billion blaming it on “inadequate financial resources.”
“The way the Chinese structure their things, it is always in their own interest and they never look at the interest of the other country. It’s the duty of government [of Ghana] to use all its expertise to try to get the best deal for Ghana. And I’m sure if a good negotiation is done, the Chinese are not unreasonable, they will agree to it. But what we have agreed to now is not in the best interest of the country,” he added.