Bawumia grabs $2bn for ‘one district one factory’

The Akufo-Addo-led New Patriotic Party (NPP) administration seems to be enjoying a lot of goodwill in its early stages as it receives $19 billion from China to boost Ghana’s struggling economy.

Weeks after President Akufo-Addo managed to secure a cool €100 million grant from the German government, his vice, Dr Mahamudu Bawumia, has equally succeeded to convince the Chinese government to vote a whopping $2 billion to support the NPP government’s ‘One District, One Factory’ flagship programme.

Vice President Bawumia said the $2 billion is part of a $15 billion deal struck with the Chinese authorities to fund government’s massive economic transformation agenda.

He expressed the hope of pushing the deal to $19 billion with expected additional $4 billion under consideration.

“So far, the commitment that we got in China before leaving amounted to a total of $15 billion and there is a possibility that within the next month, when some discussions are concluded, another $4 billion would be added to that,” Vice President Bawumia told journalists at the Kotoka International Airport upon arrival from China, having led a Ghanaian high-powered delegation to that country.

According to him, the visit was used to market Ghana and the vision of the president to move the country away from aid to trade and partnerships that would lend support to his ambition to industrialize and improve the infrastructure of the country.

Terms

Under the terms of the $2 billion agreement, the China National Building Materials and Equipment Import and Export Corporation (CNBM) would provide up to 85% financing for viable projects recommended by the ‘One District, One Factory’ secretariat, which is under the Office of the President, and some Ghanaian banks.

The facility would be offered to the banks at low interest rates, in the single digit, and has a minimum of eight years for repayment, depending on the project.

Among others, CNBM is to construct the factories for beneficiary companies and equip them with the requisite and necessary equipment on a turnkey basis, to make them fully operational for the successful implementation of the programme.

The Memorandum of Understanding (MoU) was signed in Beijing, China, on Wednesday, June 21, 2017, on the sidelines of the four-day official visit of the Veep – the first by a high level government official since the NPP took office in January.

So far, Ghana Commercial Bank, Access Bank, Universal Merchant Bank and the Ghana Import and Export Bank have signed up to the compact, although other banks have the opportunity to join.

Speaking to the media after the signing ceremony, the National Coordinator of the ‘One District, One Factory’ secretariat, Gifty Ohene-Konadu, is reported to have said the facility would also cater for technical training and the provision of support services.

“The most exciting part of the financing is, Chinese will provide a huge market access for most of the export commodities which is expected to bring $2.5 billion revenue to Ghana annually,” she disclosed.

For her, “This clearly shows how the NPP government is poised to make the private sector the engine of growth of the Ghanaian economy.”

China’s Pledge

Meanwhile, the Chinese government has pledged its commitment to help rebuild the Ghanaian economy.

Vice President of the People’s Republic of China, Li Yuanchao, who made the pledge, announced his country’s preparedness to partner Ghana to undertake a massive transformation of her economy.

Speaking at a state reception in honour of Vice President Bawumia during his visit to the Asian country, Mr Li Yuanchao indicated that China stands ready to pass on knowledge, expertise and assistance to Ghana to facilitate the transformation agenda of the government.

In particular, China is committed to deeper trade and investment cooperation as well as value addition to Ghana’s natural resources. In addition, he indicated that Chinese companies would provide assistance in the railway, agriculture (‘Planting for Food and Jobs’), industrialisation, energy and transportation sectors.

“Since you were elected Vice President of Ghana, you and President Akufo-Addo have been committed to developing relations in a ‘win-win’ cooperation with China. We highly appreciate this and thank you for that…This visit has a great significance for embarking on a new chapter in China-Ghana friendship and cooperation. I look forward to a deeper and open relationship between our two countries,” Li Yuanchao stated.

Ghana’s Commitment

Tracing the historic relations between Ghana and China, Vice President Bawumia said it was time for even closer ties.

“Both President Akufo-Addo and I have been following with keen interest and have been very much impressed with the successes of the Chinese Government under the leadership of President Xi Jinping, since becoming the President in November, 2012. We note with interest the Government’s unrelenting efforts to comprehensively deepen reforms to further spur the socio-economic transformation of this country. Equally important is your effort to deepen domestic reforms in socio-economic structures of this great nation. These initiatives will no doubt offer useful lessons and guidance in Ghana’s own socio-economic development,” he noted.

He thus indicated the readiness of his office to manage Ghana-China economic relations, believing that “this will allow for quick decisions at very high political levels to facilitate economic and investment relations between our two countries. This is a practical demonstration of the seriousness that we attach to our cooperation.”

To facilitate trade and deepen financial relations between the two countries, Dr Bawumia made a proposal for the government of China to support the opening of a Chinese commercial bank in Ghana.

The two leaders later held bilateral talks behind closed doors.

A number of ministers and government officials are also expected to sign cooperation and project agreements with Chinese companies.

Delegation

Dr Mahamudu Bawumia was accompanied on the visit by a government delegation including the Senior Minister, Yaw Osafo Maafo; Trade Minister, Alan Kyerematen; Joseph Ghartey, Minister for Railways; Kwaku Ofori Asiamah, Minister for Transport; Kwasi Amoako-Atta, Minister for Roads and Highways; Charles Adu Boahen, a Deputy Minister for Finance; Mohammed Amin Adam, Deputy Minister for Energy; Mohammed Habib Tijani, a Deputy Minister for Foreign Affairs; Gifty Ohene Konadu and Reginald Yoofi Grant, Chief Executive of the Ghana Investment Promotion Centre.