News:
August 8, 2018
An international agreement that will see Ghana and China trade in bauxite in exchange for cash worth US$2 billion has received Parliamentary approval of the Parliament amidst concerns from some Members from the Minority Caucus.
The approval follows the adoption and approval of the report of the Finance Committee on the Master Project Support Agreement (MPSA) between the Government of the Republic of Ghana and Sinohydro Corporation Limited for an amount up to US$2billion for the construction of priority infrastructure projects.
The deal which is in the form of barter will enable Ghana raise US$2billion from China’s Sinohydro Corporation Limited to undertake various infrastructure projects that are aimed at bridging the country’s infrastructure deficit estimated at US$30billion.
Sinohydro Corporation Limited would in turn, receive refined bauxite in the form of alumina or aluminum over a fifteen(15)-year period (inclusive of a three-year grace period) from the Republic of Ghana.
Per the deal, the Government through the Ghana Integrated Bauxite and Alumina Development Authority (GIBADA) (proposed) will establish a bauxite processing plant to process the raw bauxite into alumina before shipping same to service its obligations to Sinohydro Corporation Limited’s strategic partner (Offtaker).
Presenting the Finance Committee’s report to the plenary, it’s Chairman Dr Mark Assibey-Yeboah noted that under the MPSA, the Chinese state-owned hydropower engineering and construction firm is responsible for arranging the project financing for all the priority projects subject to the mutual agreement of the parties.
Sinohydro, he added, “shall be solely responsible to enter into the financing agreement with any financial institution that agrees to provide the project financing.
The objectives of the project, according to Dr. Assibey-Yeboah are to improve road infrastructure for enhanced intra-urban, regional and national road traffic flow, pursue rural electrification, affordable housing, fish landing sites, strengthen economic and regional integration and reduce the cost of doing business in the country.
The Minority members however believed the cost involve will add up to the country’s public debt stock which currently stood at US?142.3billion as at the end of 2017.
They accused the Ministry of Finance for what they described as an attempt to ‘hide the debt’ involved in the agreement.
Ranking Member on the Finance Commitee, Casiel Ato Forson, observed that the description of the agreement as barter obscures what the minority believes is a debt threatening a potential court action.
By Christian Kpesese / ghanamps.com