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$15B China Deal not Loan ...Veep Sets Record Straight

Published in politics Saturday, 08 July 2017 00:00

By Frank Amponsah

 

The Vice President, Dr. Mahamadu Bawumia, has clarified misconceptions that the government is unfairly using the country’s natural resources to contract a $15 billion loan facility from the Chinese stating clearly that the agreement is a joint venture.

 

The government has come under pressure from the Minority in Parliament and some civil society organizations over its plan to leverage the country’s Bauxite deposits in the Atiwa forest to contract the money but the Vice President says “It is a joint venture; and essentially that is what the leveraging means in this context. It is a win – win situation”

He indicated that, Ghana’s ability to gain great benefits from its relations with China was as result of its vision, “the strategy to get to where we want to be, and its discipline to execute chosen development path”.

The Vice President was delivering an address at the Conference on Building Resilient Industries and Infrastructure for Economic Transformation in Africa: The Role Of China, yesterday, which was hosted By Institute for Democratic Governance (IDEG).

According to him, African countries, and businesspeople, must strategically make bold decisions about the “Africa We Want” and take the bold steps that place them in a position to maximize their share of the projected China-Africa business revenue of US$440 Billion by 2025.

Dr. Bawumia indicated that, he led a delegation to China not for aid and handouts, but upon an order from the President, Nana Akufo-Addo, for them to go with bold, yet thoughtful and innovative plans if indeed, they want to build the Ghana the people want.

He mentioned that, Ghana has been used to the old model of borrowing from China, and many analysts have not understood the new paradigm, hence keep referring erroneously to “the $15 billion Chinese loan”. 

This new model means that we are not borrowing money from china. We are proposing a joint venture with China where we bring less than 5% of our bauxite reserves and they bring up to $15-20 billion. If another investor from another country is interested, we can leverage another 5% of our bauxite in such a joint venture. This is a new model that does not add to our debt stock. It is a win-win situation for all. But we must negotiate well and eventually the agreement will be put before Parliament for approval. 

“Let me state again that what we are proposing, and the agreements we have reached so far, are not new loans but rather joint venture proposals using less than 5% of our refined bauxite reserves.” He explained.

The Vice President also pointed out that, government is using this small fraction of the bauxite reserves not for the benefit of one individual or company but for the benefit of the entire nation.

 

“…Our trip was purposeful. We came back with some leading Chinese companies and agencies of the Chinese government signaling their interest in our agenda and with agreements totaling $15 billion.”

He also explained that, Ghana has gained enormous benefits from their trip to China since the China National Building Materials and Equipment Import and Export Corporation (CNBM) signed a $2 billion facility with the private sector - led by the Association of Ghana Industries (AGI) - to provide funding for the ‘One District One Factory’ programme, adding that, China Development Bank (CDB) agreed to unfreeze $2bn loan and signaled their willingness to re-negotiate it into a concessionary facility with a grant element, an extended maturity and at a much lower interest rate”.

 

“The China Exim bank is committed to providing about $1 billion to Exim Bank Ghana to support infrastructure and business development; China Railway International Group Limited signed a Memorandum of Understanding to provide $10 billion to support the components of a massive infrastructure development programme spanning the mining, industrial and railway fields.”

 

The Vice President also disclosed that, while in China, the Ghanaian delegation engaged the Chinese counterparts in conversations bothering on the Integrated Aluminum Industry development, involving development of the Nyinahin and Kyebi Bauxite Mines and an Aluminum Refinery, construction of the  Eastern, and Central Rail Lines including its extension to Paga in the north of the country, the Boankra, Buipe Inland Ports and Paga inland terminal, 910 km of road network, Four Interchanges (Sofoline, Oforikrom, PTC Takoradi, Danquah Circle), and 10 industrial parks in 10 regions, 25,000 houses for the security services, among others.

He averred that, without accelerated investments in the manufacturing sector, the region risks missing targets, saying that lack of depth in the manufacturing base in the region means that it is losing out on significant value-added opportunities.

 

“By investing in infrastructure, for example in the power, transportation, and logistics sector, and by removing obstacles to domestic and international investments in the industrial sector, West Africa can rapidly expand the production capacity of its industries, create jobs, and expand the frontiers of economic development for all its peoples. Projects like the West African Power Pool (WAPP) are therefore critical”, he added

He said, West Africa needs to partner strategically with its most important economic allies, and China in the past two decades has shown the depth and breadth of engagement in this direction.

Positioning Ghana as a Hub for Industrial & Infrastructure Development

Under the leadership of His Excellency, The President, Nana AddoDankwaAkufo-Addo, Ghana he said, is strategically pursuing plans to take advantage of the opportunities in making Ghana the Financial, Transportation (especially Aviation) hub for the West Africa region that will support an Industrial hub for the region.

“To do this, we are implementing an Integrated Infrastructure Development Programme (IIDP) strategy that will direct investments into a modern road network, aviation, ICT, sea and inland ports, bridges, harbours, and railways. The IIDP will open up the economy and unlock the economic potential of our vast mineral resources, agricultural potential, as well as other natural resources to power our industrial growth, while leveraging same to attract intra-Community investments, he said.

 

He said, government was also pursuing a broad-based and shared growth agenda through the District Industrialization (One District, One Factory) Programme by providing incentives to private sector investors to establish viable businesses at the District level, to ensure an even, spatial spread of industries across the country, create local jobs and boost local economic growth, and reduce poverty.

Read 1163 times Last modified on Saturday, 08 July 2017 00:03

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