Business News of Thursday, 15 August 2019
The EXIM Bank of India has with the support of the Government of India offered two concessional Lines of Credit worth US$180 million to the Government of Ghana.
Of the amount US$150 million is for the strengthening of Agriculture Mechanisation Service Centres to achieve food security in Ghana, while US$30 million is to upgrade the Potable Water Supply System in Yendi Town.
The agreements, which were reached on April 5, 2019 were signed by the Minister of Finance, Mr Ken Ofori-Atta, and Mr Pushpesh Tyagi, the EXIM Bank of India Resident Representative based in Abidjan, in Accra.
The signing ceremony was also witnessed by the Minister of Food and Agriculture, Dr Owusu Afriyie Akoto, a Deputy Minister of Sanitation and Water Resources, Mr Patrick Boamah, and the High Commissioner of India to Ghana, Mr Birender Singh Yadav.
With the signing of the two concessional Lines of Credit, India’s developmental cooperation with Ghana through bilateral concessional Lines of Credit and through Indian Lines of Credit offered through ECOWAS Bank for Investment and Development (EBID) aggregates to US$433.26 million.
Projects through LOCs
The earlier projects implemented or signed through India’s bilateral concessional Lines of Credit have been a US$15 million Rural Electrification Project in 2004; US$27 million Rural Electrification, Agricultural and Transportation Project in 2005; US$60 million Rural Electrification Project and construction of Presidential Office in 2006.
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Others are a US$25 million Railway Corridors and Argo-Processing Plant and Foreign Policy Training Institution in 2008, a US$ 21.72 million Improved Fish Harvesting and Fish Processing Project and Waste Management Equipment and Management Support Project in 2010, a US$35 million Sugar Plant in 2013 and a US$ 24.54 million Sugarcane Development and Irrigation Project signed in November 2016.
Apart from these, Ghana has also availed India’s concessional Lines of Credit offered through EBID for US$15 million Modernisation of Ghana National Fire Service through the acquisition of fire tenders and associated appliances and a US$30 million Self Help Electrification in the Ashanti and Brong Ahafo regions of Ghana (Phase I worth US$15 million has been completed and the implementation of Phase-II is in progress).
The two Lines of Credit Agreements have been signed during the year of the 150th Birth Anniversary Celebration of Mahatma Gandhi in line with the 10 Guiding Principles of India’s engagement with Africa as outlined by the Prime Minister of India on July 25, 2018 in his address to the Parliament of Uganda.
The Guiding Principles state that Africa will be at the top of India’s priorities.
India will continue to intensify and deepen its engagement with Africa, which will be sustained and regular and that India’s development partnership will be guided by Africa’s priorities.
It will be on terms that will be comfortable for the recipient country, that will liberate the potential and not constrain its future.
India will rely on African talent and skills.
India will build as much local capacity and create as many local opportunities as possible such as assisting Africa to improve its agriculture. Africa has 60 per cent of the world’s arable land but produces just 10 per cent of the global output.
According to the Indian government, it is in the spirit of reliable and steady partnership with Ghana in her developmental journey of socio-economic growth, guided by the principle of South-South Cooperation and with the 10 Guiding Principles of India’s engagement with Africa that the two Lines of Credit with the Government of Ghana, were signed with broad terms of credit at a rate of interest of 1.5 per cent per annum with a tenure of 25 years and a moratorium of five years.
The implementation of the Lines of Credit will be regulated by the guidelines and procedures as in the revised IDEAS guidelines of the Government of India dated December 7, 2015.
Ghana govt response
For her part, the government of Ghana has assured India that it would take expeditious steps to operationalise the Lines of Credit as the projects would supplement domestic efforts in realisation of her flagship programme, “Planting for Food and Jobs” which will be helpful in moving towards the vision of Ghana achieving self-sufficiency in food-grains and key crops production.
The Agricultural Mechanisation Line of Credit is targeted to assist small farm holders, who do not have resources to acquire machinery of their own, to have access to agricultural machinery implements.
The increased production of key crops will lead to increased incomes of the farmers and beneficiaries which will result in improvement in the rural living conditions.
The US$398.33 million Tema-Akosombo Railway Line Project, under the multi-modal transport corridor being implemented under Buyer’s credit offered by the EXIM Bank of India, is making a steady progress.
The Government of Ghana was also requested to expedite the processing of two concessional lines of credit announced by the Government of India during the Founding Conference of International Solar Alliance in March 2018, which were a US$ 34.80 million solar powered street lightning project using LED bulbs and US$6.3 million solar powered mini grids for island and forest zones communities through EBID.
Meanwhile, bilateral trade between India and Ghana has shown an upward trend and increased from US$2.62 billion in 2016-17 to US$3.34 billion in 2017-18. During 2018-2019, the bilateral trade amounted to US$4.48 billion with India exporting goods worth US$717.33 million, while Indian imports from Ghana amounting to US$3763.41 million.
India says it is willing to take on board fresh project proposals as per the priorities of the government of Ghana for consideration under India’s concessional lines of credit.