By William
Yaw Owusu
Friday
September 28, 2018
The International Monetary Fund (IMF) has stated
that the $2 billion barter deal between the Akufo-Addo administration and
Sinohydro Corporation of China that is going to bring about massive
infrastructural development, especially in the road sector, cannot constitute a
loan.
The official response from the IMF has left the
opposition National Democratic Congress (NDC) flatfooted, as it tried to sabotage
the whole arrangement recently.
It emerged that NDC took a collective decision to
carry out the sabotage which was allegedly backed by former President John
Mahama.
According to sources, the opposition party is
pushing hard to thwart the deal so that President Akufo-Addo and his government
would fail to initiate any tangible developmental projects, especially roads,
before the 2020 general elections.
That way, they will turn around to taunt President
Akufo-Addo for failing to significantly develop the country which would give
them electoral advantage.
Official
Confirmation
Information Minister-designate, Kojo Oppong-Nkrumah,
confirmed on radio that the IMF Team met officials at the Ministry of Finance
and later the Finance Committee of Parliament and confirmed that the
arrangement with the Chinese cannot qualify as a loan.
He said the IMF determined that the arrangement is
not backed with a government guarantee after the NDC Minority in Parliament
reported the government to the Bretton Woods institution to punish Ghana for
going for a loan.
Barter
Transaction
The barter transaction is basically tied to some
massive bauxite deposits in the country where the government is expected to
repay with relined bauxite (alumina/aluminum).
The government has been insisting that the whole
transaction is barter and also declared that the constitutional provisions used
in bringing the deal to parliament do not apply to loans alone but all
international agreements.
The NDC, sensing that the $2 billion barter
agreement could serve as a catalyst for infrastructural development of the
country and possibly dwindle its electoral fortunes, dashed to the IMF’s Office
in Accra on August 10 to attempt to get the Bretton Woods institution to
classify the agreement as a loan which will end up increasing the country’s
debt stock.
Illegal
Deal
They wanted the IMF to stop the deal because they
claimed it was ‘illegal’ even though the same political grouping had helped in
passing the agreement in Parliament before the House went on recess in late
July.
The opposition party members on the Finance
Committee deliberated on the Master Project Support Agreement (MPSA) between
the government of Ghana and Sinohydro Corporation Limited for the $2 billion
for the construction of priority infrastructural projects before the committee’s
report was laid in the House for approval.
Complex
Transaction
Last month, the IMF’s resident representative in
Accra, Natalia Koliadina, in response to a letter written and signed by
Minority Leader, Haruna Iddrisu, and Cassiel Ato Forson, who is a ranking
Member of the Finance Committee, said she could not readily give an answer to
the queries raised by the NDC because of the complexity of the transaction.”
“You asked the IMF opinion on whether the agreement
between the government of Ghana and Sinohydro Corporation should be classified
as government debt under the programme, and whether it would contribute to the
stock of government debt,” the resident representative said.
“We will use the definition of government debt in
the Technical Memorandum of Understanding which has not changed since the
inception of the programme to make this decision.”
The IMF said, “Given the complexity of the
transaction, I am unable to answer your question immediately. I have been in
consultations with headquarters, including the Legal Department, and we are
going to discuss this issue with the authorities during the upcoming seventh
review mission under the Extended Credit Facility.”
DAILY
GUIDE has learnt that the first tranche of $500 million
has already hit Ghana’s accounts to allow the commencement of the projects.
Bawumia
Factor
The Vice-President Dr Mahamudu Bawumia, who led the
Economic Management Team to negotiate the agreement with the Chinese, has
already described the deal as a game-changer.
He said the NPP government wants to prove to
Ghanaians what $2 billion can do for a nation like Ghana.
Priority
Projects
The priority projects of the government of Ghana to
be funded under the MPSA comprise: rural electrification, construction of
hospitals and clinics, bridges, interchanges, roads, affordable housing,
fishing landing sites, and other projects that would be identified by the
government of Ghana.
Tamale, the hometown of Haruna Iddrisu, will be
witnessing its first interchange in history under the Chinese deal.
Finance
Committee
Chairman of the Finance Committee of Parliament, Dr.
Mark Assibey Yeboah, explained that under the MPSA, Sinohydro would be
responsible for arranging the project financing for all the priority projects
subject to the mutual agreement of the parties.
“Sinohydro shall be solely responsible to enter into
the financing agreement (s) with any financial institution that agrees to
provide the project financing,” he said when the agreement was being approved.
He also said the committee was further informed that
the MPSA is essentially a “barter” facility under which Sinohydro will
implement various EPC contracts for Ghana and the government repays with relined
bauxite (alumina/aluminum).
Already the Integrated Alumina Development Authority
Bill has been passed by Parliament awaiting presidential assent to kick-start
Ghana’s industrialization process.
“To enhance and maximise the value to Ghana of its
bauxite resources, the committee was informed that government, through the
Ghana Integrated Bauxite and Alumina Development Authority (GIBADA), will
establish a bauxite processing plant to process the raw bauxite into alumina
before shipping same to service the obligations under the MPSA,” he said,
adding “presently raw bauxite is said to trade at about $24/tonne on the
international market whilst processed alumina trades at more than $300/tonne.”
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