General News of 2014-07-18

China is not 'Father Christmas' to dole out cash to unprepared gov't - IMANI

Founding President of IMANI Center for Policy and Education, Franklin Cudjoe, has described as shameful the time government is wasting on the procurement of the $3 billion China Development Bank (CDB) loan facility.
Speaking on Adom FM’s Dwaso Nsem, he said “I feel ashamed and I feel that we wasted four years chasing a loan we were not prepared for”.
The loan agreement was signed in 2011 by Ghana and CDB after the International Monetary Fund (IMF) increased the country’s commercial borrowing rate from $800 million to $3.4 billion the same year.
The Master Facility Agreement (MFA) was aimed at financing projects such as the Takoradi-Kumasi Western Corridor Infrastructure Project, the Sekondi Free Zone project, the Information Communication Technology (ICT) enhanced surveillance project for the Western Corridor oil and gas enclave, among others.
IMANI was unimpressed with the quality of the agreement presented by the Ghana government and predicted that Ghana would never be able to access the loan.
They were taken on by government spokespersons, some of whom vilified the think tank for daring to raise issues about the quality of proposal sent to the Chinese.
Three years later, he Finance Minister Mr. Seth Terkper in a mid-year review presented to parliament on July 16 announced that the “CDB had introduced a new condition precedent to the effectiveness of the subsidiary agreements of the two additional projects, namely a side agreement to amend some of the terms of the MFA as well as the five-party agreement and account agreement”.
He further stated that the government had resolved to access $1.5 billion instead of the $3 billion as initially planned.
Mr Cudjoe who felt vindicated by the turn of events said government failed to properly defend the purpose of the loan, adding the only viable project at the time was the Atuabo project.
CDB was not convinced about the rest of the project proposal and this has been the reason for their refusal to approve the loan, he stated.
“In this day and age where finance is critical you just don’t go around because you are a government, holding sovereign guarantee, distributing [sovereign bond] like chocolate...they won’t give you the money”, he stressed.
He further stated that the Chinese will only give out money when they are totally convinced about the purpose for which the loan will be used.
“You just wasted tax payers money sent people to China as if they were sharing money, the Chinese are not Father Christmas”.
He went on to say that even though they are always attacked for criticizing the government, they will not relent in their efforts if it continues to make bad moves and policies.