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Government says its newest barter trade agreement with the SINOHYDRO group from China is the best financial module that will bridge the yawning Infrastructural gap in the country, haven experimented with other forms of financing over the years to no avail.
According to the government’s communications, the barter deal which has already been approved by cabinet and awaiting parliamentary approval, is leveraging on the Bauxite deposits in the country to offer a $2 Billion worth of Bauxite, Alumina and Aluminum to the SINOHYDRO Group Limited of China, in exchange for $2 Billion worth of infrastructure in the form of roads, bridges, interchanges among others.
A Press conference held in Parliament on Tuesday, July 31, 2018, and addressed by a Deputy Minister for Information, Kojo Oppong Nkrumah, together with a Deputy Minister of Road, Anthony Abayifa Karbo, seeks to clarify lingering doubts about the deal and to reassure Ghanaians that the deal meant well for the country.
The Minority in Parliament have raised concerns about the deal by questioning its viability and value for money considerations. The group is not convinced about the claim by government that the deal will not further inflate the already precarious state of the country’s debt to GDP portfolio, but rather see it as an attempt to hide a supposed debt from Ghanaians.
But the government has defended its decision to enter into the agreement because it is fully convinced that the right processes have been followed and the necessary due diligence have been done to ensure the nation gets the maximum benefit from its natural resources by adding value to them before exports.
Government is also convinced that the discovery of natural resources in the country has not translated into equivalent Infrastructural development, hence the move by the Akufo-Addo government to develop this unique project financing arrangement which will create equity between the country’s natural resources and development.
According to a PowerPoint presentation made by Kojo Oppong Nkrumah to the Members for the Parliamentary Press Corps, the close to 57 Billion Ghana Cedis realized from mining and quarrying over the past decades, just about 12 Billion Ghana Cedis has been budgeted for infrastructure over the past decade.
The barter agreement is divided into two phases. The first phase is awaiting parliamentary approval for work to commence before the end of the year. It is estimated to cost 500 Million Dollars, while the second phase is also estimated to cost 1.5 Billion Dollars.
Ghana is supposed to commence repayment of its part of the deal after 3 years for a period of 15 years with refined products of its bauxite deposits, which will be mined by the Ghana Integrated Bauxite and Aluminum Development Authority (GIBADA).
However, the country has no refinery as yet to refine the bauxite but the Deputy Minister for Information, Kojo Oppong Nkrumah, indicated that plans were already afoot to ensure that some refineries were built before the repayment period.
According to the Ofoase Ayirebi Member of Parliament, the project creates the path to the Ghana Beyond Aid dream espoused by the president and his team as well as bring lots of benefits to the country, including 30% local content in the execution of the projects, open up the fiscal space in the budget to finance education and health among others.
Source: Clement Akoloh || afriwakeradio.com