Politics
Ghana Paying More Cash to Access Chinese Loan
Ghana has already paid a commitment fee of $54 million in order to access the $3 billion China Development Bank (CDB) loan, according to the Minority Spokesperson on Finance, Dr. Anthony Akoto Osei. Dr Akoto Osei said that only $600 million has been disbursed by the Chinese bank so far and the bank appears to be dilly dallying in the disbursement of the $3 billion signed in 2011.
So far, it has become an albatross around the neck of the Mahama administration, as the Chinese government continues to make more unpalatable demands. Dr. Akoto Osei said President Mahama should fly to China as a matter of urgency to re-negotiate the $3 billion loan.
Dr. Akoto Osei then told Joy FM that Ghana has had to cough up $54 million in commitment fees after receiving about $600 million so far. On December 8, 2009, the China Development Bank (CDB) agreed to provide Ghana with a loan of $3 billion for a package of projects the majority of which are related to infrastructural development.
The loan was signed by CDB and Ghana on December 16, 2011. In February 2012, Parliament approved the agreement at the recommendation of the then Deputy Speaker of Parliament, Edward Doe Adjaho. The Minority called it a “bad agreement…from day one.”
According to government officials’ projections of oil prices, Ghana will end up paying $6.4 billion to China for the $3 billion loan or will give away 750 million barrels of the nation’s crude oil to a Chinese company for more than 15 years. The loan agreement stipulates that 60 percent of all contracts under the loan go to Chinese companies. In addition, there is also an upfront fee of 0.25 percent of the loan and a commitment fee of 1 percent per year on the undrawn and uncanceled balance of the loan.
Principal and interest payments will be made to CDB every six months after an agreed grace period expires; and it has. Despite delays in the disbursement, government is still paying commitment fees on the loan, he claimed. The Minority Spokesperson and NPP MP for Old Tafo wants President John Mahama to travel to China immediately to re-negotiate the agreement.
He specifically called on the President to get the 1 percent commitment fee taken out. He also said, “Once we have gone for it, we should take out what is not inuring to our interest. The 1 percent commitment fee is one of them.” The former Minister of Finance also wondered, “How can you pay for something you have not received?”
He argued that no other person but the President should go because the initial agreement was signed by the late President John Evans Atta Mills. A Deputy Minister of Finance, Kwaku Ricketts-Hagan, last week told Citi FM, an Accra-based radio station, that the Chinese government was making more demands to the detriment of Ghana.
Mr Ricketts-Hagan said, “They are asking for other things I cannot tell you but they want more. That is why we have returned to the negotiation table.” The Chinese government has already agreed with the government of Ghana to receive 13,000 barrels of crude oil per day but reports now suggest that the Chinese is raising the bar to get an additional 2,000 barrels of crude from Ghana.
He also concluded, “We signed the agreement but there were some commitments that we were to adhere to and we are doing that, but they are asking for other things; it could be oil and it could be other things, but I cannot tell you more but they are issues on interpretation of the contract and that is why we have returned to the negotiation table but certainly the two parties are not happy.”
Source: Spy Ghana