The way gov't is collateralizing our natural resources with loan is worrying - Economist

A chartered economist, Mr Amoah Darkwa has called for more details following announcement that the Chinese government has committed 15 billion dollars worth of investment to Ghana.

Speaking to Kwame Tutu on Rainbow Radio, the economist said, on the face of it, the loan follows a partnership agreement and Ghana maybe doing a counterpart funding.

He said, Ghanaians should be asking what our commitment will be as a nation following the partnership because when we are unable to do our part, things will go bad for us.

The government of China has committed 15 billion dollars worth of investment to Ghana, Vice Dr. Mahamudu Bawumia has announced. Speaking to journalists after returning from a four-day visit to the Peoples Republic of China he said: “The Peoples Republic of China and the State and Private Sector Enterprises have together committed to support the economic transformation agenda of Nana Addo Dankwa Akufo-Addo.

So far the commitment that we received in China before leaving amounted to 15 billion dollars.’’ He added: “There is a possibility that within the next month or so there are some discussion that we couldn’t conclude and another 4 billion dollars will be added to that. Of course, we will follow these through.’’ He said: “At various meetings during the 4 day visit, leading Chinese companies and agencies of the government of China signed these MoU totaling about 15 billion. In the area of industrilisation for example the China National Building Materials Equipment Export and Import Cooperation signed a facility with the Private Sector led by the Association of Ghana Industries.’’

But commenting on the loan, Mr Darkwa said, this is not the first time we have received such a loan from the Chinese government and stressed the need for us to learn from our past and other countries.

He referred to the late Mills era where Ghana secured a loan $3bn 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. As a result, the minority in parliament (NPP) abstained from the vote but the majority had their way.

According to him, although the loan was approved by Parliament, we were unable to disburse all hence the need to learn from that past example. ‘’We should be guided by some of these factors and ask if we should be happy over the loan approved by the Chinese government,’’ he said. Mr Amoah Darkwa said, from what he has read, it seems Ghana may use its resources as collateral just like we did during the era of Mills.

This he lamented was worrying. ‘’The way government is collateralizing our natural resources with loan is worrying and problematic,’’ he added.

Meanwhile, he has indicated that government cannot roll out is flagship policies with one source of finance and will need other source of financing.