Minority in parliament has criticised the President Mahama led National Democratic Congress (NDC) government over a high interest loan facility being offered to the Electricity Company of Ghana (ECG).
As parliament approves a $60 million loan facility aimed at improving efficiency of the ECG, minority legislators have raised red flags describing the interest rate at which the loan will be given to ECG as “unfair”.
According to Ranking Member of the Finance Committee, Dr Anthony Akoto Osei, government was interested in ripping the service provider at a time it was cash strapped.
He made this known on Tuesday, November 1, during the consideration of another loan agreement between government and the International Development Association (IDA) to help enhance the service delivery of the company.
Government is borrowing the money from IDA at an interest rate of 1.25 per cent. Government will then lend the money to the ECG at a rate of 5.3 per cent.
Speaking to Class News, Dr Osei wondered why government will be indebted to the service provider and lend money to it at a very high interest rate describing the action as unfair.
“We know that ECG is not in the best shape and government is now lending to ECG [at 5.3 per cent], that is too much. ECG is in trouble partly because government is owing it money it has not paid yet.
I want to know the reason why this time they want ECG to pay over 4 per cent much higher than what government is getting it for, why?” he questioned.
The Old Tafo legislator maintained that the loan is not supposed to be offered at any rate higher than what government received and raised questions as to why government will take such a posture.