Gov't to proceed with $3 billion loan despite IMANI's warnings
The government of Ghana is pressing on with its 3 billion dollar loan from the China Development bank despite a strong warning from policy think tank, IMANI Ghana.
The policy think tank argues that China will be able to expend only $500 million of the $3 billion loan to Ghana.
The President, John Evans Atta Mills, in his 2012 New Year message to Ghanaians said the loan will be used to embark on massive infrastructural expansion in the country.
However, Imani Ghana is raising doubt about the willingness of the China Development Bank to grant Ghana’s biggest loan ever in the short term.
Imani’s doubts emanate from its knowledge of the strict credit requirements of the China Development Bank needed to be adhered to by government in order to secure the entire $3 billion.
Imani Ghana says the government's three billion dollar Chinese loan to develop the oil and gas industry and other infrastructure is too wild and pre-emptive
Communications Director of the policy think tank, Selorm Brantie says, “Government should not put all its eggs in one basket by thinking that the loan will be a panacea by which government's infrastructure will spread for the fiscal year 2012 to rely on. Considering how much we will have to offer as collateral and based on the track record of the Chinese Development Bank which has its own strict measures, it is quite clear that the highest we can get is nothing more than $500 million.”
Imani is worried that government's over-reliance on this facility to prosecute its 2012 economic program, especially in the infrastructure area, could lead to dislocations in the economy and frustrations on the part of its managers.
But government argues that Imani Ghana’s argument is one-sided. A statement signed by the deputy minister for information Samuel Okudzeto Ablakwa said IMANI has confused the Framework Agreements signed with the China Development Bank and China EXIM Bank in September 2010 during President Mills' visit to China, with the Master Facility Agreement (MFA) which Parliament approved in August 2011.
It further stated that IMANI’s confusion of the two documents has led it to mislead the public stating that while the framework agreement is a Memoranda of Understanding (MoU), the MFA is a firm and binding Agreement with CDB.
But the communications director of the think tank, SelormBranttie disagrees.
He explains that Section 7 of the MFA clearly spells out the binding parties, adding that, “throughout that side of the agreement we only see the borrower and the agreement is not binding on the lender. As it stands right now the lender is not bound to give the stipulated amount to the borrower.”
Imani in a statement, further states that, given the ongoing re-injection and flaring of gas could damage the Jubilee Fields and result in enormous economic losses, Government negotiated with CDB and the contractor for pre-financing critical aspects of the oil-gas project, after approval had been given for SINOPEC as contractor.
By: e.tv Ghana
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