Ghana to foster stronger ties with China – Finance Minister

The Minister of Finance has hinted of the new government’s commitment, to develop better relationship with the Chinese, which is aimed at developing a robust economy.

In view of this, the government is expected to meet with the Chinese officials in Ghana led by their ambassador, for the second time since he assumed office to discuss issues of mutual interest and the $3 billion China Development Bank loan (CDB).

In 2011, the Attah Mills/Mahama government secured a $3 billion loan from the China Development Bank (CDB) which is state owned, for major infrastructure development projects in Ghana.

The loan agreement was approved by Parliament in August 2011 amid controversy over the terms and conditions of the loan agreement, particularly, the collateralization of oil against the loan.

But till date, out of the $ 3 billion loan facility, close to about $1 billion has been disbursed.

Speaking to the media on Sunday February 5, 2017, the Minister Finance Ken Ofori-Atta said the ministry would on Monday February 6, 2017 hold its second meeting with the Chinese embassy since President Nana Akufo-Addo was sworn in on Jan. 7, noting that the CDB Chinese loan would be high on the agenda.

“We’re meeting for a second time with the Chinese Embassy” on Monday, and we are trying to nail down and look at an enhanced relationship with China to see how they can support the direction in which we’re now going as we build a stronger economy”

China-Ghana economic cooperation continues to gain momentum. In 2010 the bilateral trade surpassed US$2 billion for the first time. In 2013 it hit US$5.15 billion, ranking 3rd in 24 Mid & West African countries and 7th in Africa.

Therein, Ghana’s export volume to China has seen a year-on-year increase of 86.7%, reaching US$1.2 billion in 2015. China has become one of the major investment source countries of Ghana with the non-financial FDI reaching US$1.5 billion.

The Minister of Finance Ken Ofori Atta, since taking over the finance ministry, has said the budget deficit and government debt are much higher than had been expected, adding pressure to public finances.

This therefore makes it important for the government to look elsewhere for cheaper sources of funding which will not add to the public debt especially in a form of interest payments on loans.