BAWUMIA BOY CLARIFIES $15BN CHINESE DEAL

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Tuesday September 11, 2018

A Technical Economic Advisor at the office of the Vice President, Dr. Gideon Boako has said it is wrong for critics of the New Patriotic Party (NPP) government to misrepresent the facts surrounding the massive Chinese deal secured by the Akufo-Addo administration mainly for infrastructure development.

“We never said anywhere that the entire $15 billion facility coming from China was for infrastructure for bauxite barter and anyone who paid attention to details knew this.”

Reacting to the ‘needless propaganda’ over the deal which Vice President Mahamudu Bawumia has said ‘we had to think outside the box to clinch it’, Dr. Boako said “never was it part of the narrative last year after the China trip that government was seeking to enter into a $15 or $20 billion joint venture agreement only for infrastructure for bauxite,” adding “and how people juggle between the two figures leaves much to be desired.”

He said that “the entire $15 billion facility was in categories” and the whole package could not have been for bauxite barter.

According to the advisor, $2 billion facility was agreed between Association of Ghana Industries (AGI) and their sister partner in China called the CNBM, and about $6 to $8 billion facility was made for integrated aluminium industry focusing on bauxite mine and refinery through a joint venture agreement between GoG and any potential off-taker, and other related projects.

He added that another $2 billion infrastructure was for bauxite barter facility between GoG and any potential partner, saying “at that time even Sinohydro was not in the picture because we didn't know which company was going to be selected.”

 Dr. Boako also said $1 billion facility will look at ‘other projects’, and there was also an effort to free up the locked $2 billion CDB loan contracted under the previous NDC government, adding “all these constituted the bigger $15 billion package.” 

“I am a bit baffled why people choose to rely on online portal news some of which are themselves defective in terms of accuracy, but not seek to get the actual facts,” he said.

According to Dr. Boako, “in 2018, AGI and CNBM have successfully signed their pacts and started disbursing the $2 billion, $10 million of which has been advanced to a sugar factory last month.”

He said “the parliament of Ghana has also given approval for the $2 billion infrastructure for bauxite facility and the agreement signed for works to begin.”

“Works on the bauxite mines and refinery have far advanced. Government has established a holding company backed by an act of parliament this year which will enter into the joint venture agreement for the bauxite mine and refinery. In the next few weeks or months, request for proposals will be issued for prospective companies to bid. If we are lucky, the cost of the mining and refinery may even become less than the value originally envisaged.”

He added “just this week, as part of the President’s tour to China, $400 million of the locked up $2 billion CDB loan has been signed for its release for the construction of the fishing landing sites and others. What this means is that hopefully by the end of 2018, about 95% of the whole $15 billion package announced by the erudite and hardworking Vice President after his visit to China, would be realized.”

He said “and this will mean a high success rate for the biggest deal the nation Ghana has gotten from any official trip by any Vice President for so long a time,” adding “this is remarkable and must be applauded and, if not, should be scrutinised from a more informed position than just lazily seeking to criticise.”

Dr. Boako further said “the other good thing to note is that Sinohydro is only playing a role to provide infrastructure at the discretion of the government and people of Ghana and not at their discretion.  Government is not going to pay them anything until after 3 years by which time they should have completed the projects. Sinohydro is not a company that is going to mine the bauxite and in other words, Sinohydro is not a mining company.”

He said “what differentiates this from the extant arrangements in the gold and oil sectors, is that, here, government is not going to just export raw bauxite but rather add value to it through refining. The $2 billion that will be paid at the end of the day is just a small fraction of the total export value of refined bauxite we have as a country, which is estimated to be around $400 billion.”