Ghana to secure $ 3 billion from China(Sunday, April 8, 2012 )

Story: George Ernest Asare and Benjamin Xornam Glover, Beijing, China Vice President John Dramani Mahama is due to arrive in China to formally sign a $3-billion loan from the China Development Bank designed to enhance accelerated infrastructure development in Ghana . A report published by China Daily- the most authoritative and influential English-language newspaper in China- in its Saturday, April 7, 2012 edition, said the ceremony will take place on Thursday April 12, 2012 in China. Ahead of Vice President Mahama’s visit to China this week, the China Daily newspaper quotes him as debunking criticism that the new loan is being taken on the grounds that the Chinese companies will be key beneficiaries from the infrastructure work. The paper said Vice President Mahama gave assurance that there are provisions for Ghanaian and other companies to secure 40 per cent of the contracts. "It is not like China is giving us $3 billion with one hand and with the other coming back and taking all the contracts and their money back," the paper quoted the Vice President as saying. According to the report, the loan facility which among others, would be used to develop a new gas pipeline, fishing harbors, roads and railway lines in Ghana is considered the largest loan so far to a West African nation. Other projects likely to spring up in Ghana after government has secured the loan are the Western Corridor gas infrastructure project, which comprise the construction of offshore processing plant, onshore trunk pipeline and the retrofitting of the Tema Oil Refinery (TOR) as well as the construction of a gas processing plant, which will now be sited at Atuabo. It will also include a Takoradi Petroleum Terminal to be developed by the Bulk Oil Storage and Transportation Company (BOST) and the Western Corridor “Oil Enclave” Toll Road to be developed by the Ghana Highway Authority. The paper quoted the Vice President as saying that Ghana was also in discussions with Brazil to arrange a similar but smaller facility of around $1 billion. It will be recalled that President John Evans Atta Mills during a visit to China in September 2010, signed a memorandum of understanding for the loan facility. However, since then, the processes leading to the securing of the loan have been fraught with many challenges, leading to delays in assessing the fund. Several bodies, including Imani Ghana, a data and policy analysis think tank, clashed with the ruling National Democratic Congress (NDC) over whether Ghana can secure the loan. According to Imani , its research had showed that 'it is highly doubtful that in the short term, the Government of Ghana shall be able to satisfy the strict credit requirements of the China Development Bank in order to secure the entire $3 billion mentioned in the government's framework agreement with the state-owned Chinese bank'. Reacting, a Deputy Minister of Information, Samuel Okudzeto Ablakwa rejected the IMANI's claims, describing it as 'regrettable' and 'misleading'. The opposition New Patriotic Party also raised doubt about government’s ability to secure the loan, a situation that caused Government to withdraw the agreement on the floor of the parliament, revised the agreement before relaying it before the House.. The Parliamentary Committee on Finance, and Energy, by a majority decision respectively recommended the loan agreement for approval on Wednesday, February 22, 2012,and it was subsequently approved on February 23, 2012. Also in December 2011, the International Monetary Fund (IMF) and the World Bank raised Ghana's eligibility to borrow on commercial terms from $700 million to $3.4 billion. Having gone through all these process, it appears all is set for the release of the loan not only to propel Ghana’s economy, but also enhance accelerated infrastructure development. -End-