Posted on: www.dailyguideghana.com
By William Yaw Owusu
Thursday, July 23, 2015
It is emerging that the refusal of the Chinese government to grant loan application put in by Ghana for the financing of road projects is going to hurt many ongoing road projects in the long run.
DAILY GUIDE learnt that apart from the three projects the Chinese have declined to finance, they are also refusing to re-finance the construction of four other projects.
The letter declining Ghana’s loan application had been signed on June 26, 2015 by Ji Chun, Regional Director of the Export-Import (Exim) Bank of China and addressed to the Finance Minister, Seth Terpker referred the government to an earlier letter of April 3, 2015 in which the issue of re-financing was discussed.
“In addition, regarding to the four re-financing road projects, please refer to our letter dated April 3, 2013. We still suggest that your ministry take other financing resource into consideration.”
The three major roads that were outrightly denied financing included Accra Ring Road Outer project, Mankessim/Agona-Swedru/Nsawam and the Dodowa/Kpong and Somanya/Akuse Junction road re-construction projects.
According to the Chinese, it was “not appropriate to utilize a Chinese concessionary loan to implement these projects,” adding “otherwise it may increase burden of your country.”
Ghana is already struggling with how to finance is mounting debt portfolio currently pegged at GHC90 million as at May, 2015.
The government is borrowing money at high interest rate to service interest on debt, a development that keeps the debt profile rising at an alarming rate.
The Asian giant suggested Ghana to “take financing resource into consideration,” in order to qualify for such a facility.
They said that per the Chinese government’s guidelines, Concessional Loan and Preferential Buyer Credit were “mainly directed towards projects with good financial benefits and repayment abilities,” adding that the road projects for which Ghana was seeking for funds “lack financial abilities.”
A lot of Chinese road projects in the capital appear to have been stalled of late and classic example is the almost-completed 37-Burma Camp-La Palm Junction highway.
The contractor on the site has not been seen working in recent weeks.
President John Mahama has said despite the large number of road projects underway, there still remained a lot to be done in the sector and added that “there is however, considerable evidence to show that no effort is being spared to fix the country’s roads.”
In his 2015 State-of-the-nation address delivered on February 26, President John Mahama had said “This year we are beginning what would be the single largest intervention in the road sector in this country.
“The project would see investments of about GH¢1 billion in roads commencing this year and ending in 2019 during my second term in office. These projects will be funded with a mix of Cocoa infrastructure fund financing and Government of Ghana budgetary support.”
He said in the same address that “this year, we will commence work on the redevelopment of the Accra-Tema Motorway into a six-lane highway with interchanges,” however, the year is fast coming to an end without any visible attempt to commence the project.
“Resurfacing works will also take place on roads in North and South Kanda, James Town, Adabraka, Mamprobi, Chorkor, Adenta and Madina,” he added.