The news that the Government of Ghana is now sourcing for funds or has now secured funds for the $1.5 billion STX project, a project which received parliamentary approval in August 2010, leaves much to be desired and represents the due diligence government is prepared to forgo in its hurried attempts to go in for inflated loans at grave cost to the nation. The obvious question is this: what would motivate a government to stubbornly go for such a bad deal for its country?
After a flamboyant sod-cutting ceremony by President Mills in January 2011, we have been told by Alban Bagbin that Government is now expecting funds for the STX project from Standard Chartered Bank and two other banks in the United States. He could not even provide any further details on the nature of funding.
However, in September 2010, a month after the ratification of the agreement by Parliament, the Deputy Minister of Finance, Mr Seth Terkper, defended the STX deal claiming that the agreement came with identified sources of financing, including the South Korean government.
So one would like to know why the Government of Ghana, together with STX, is now currently looking for money from other sources after they had indicated they had money for the construction of the project. Were Ghanaians being lied to? And if so why?
The agreement, entered into with STX did not contain sources of funding and the revelation by Hon Bagbin goes to prove the allegations made by the Minority in Parliament that this deal was shady and its approval certainly premature. At best the STX deal only reaffirms the marked incompetence of the Mills-Mahama administration.
The New Statesman is of the opinion that not only should the deal be brought back to Parliament but that it should be scrapped altogether. It is a deal made in shady land and such deals may only end their promoters in the law courts and the country needlessly indebted. It exposes why we are where we are – poor and not ready to learn and grow.
It seems this government is on an agenda to pile as much debt on Ghanaians as it possible can, as well as grabbing as much as it can knowing 2012 will certainly result in a defeat for them.
Already the Centre for Policy Analysis has warned that Ghana’s total public debt which stood at US$8,551.7 million in September 2009 has surged to US$11,247.7 million in September 2010, representing a 32.1 per cent leap within the twelve month period. Our own checks show that the total debt of Ghana currently stands at US$13.45 billion and likely to hit $16 billion before the end of the year, representing 60% of our rebased economy as opposed to the 40% inherited by the NDC in 2009.
Under President Mills, the Government of Ghana has entered into contractual agreements with some “shady” companies outside the country that leaves much to be desired.
Opus 7, a clay maker, is one example of a company contracted by Government to provide a loan facility to construct 70 district hospitals at an inflated cost $40 million dollars per hospital. This is a husband and wife company with a stated capital of some $5,000.
The Daily Graphic of yesterday reported that Vice President Mahama had renegotiated a $250 million loan facility secured by President Kufuor for a dam project in the North to be now used to support the construction of the Eastern Corridor road that will link Northern Ghana to the south through the Volta Region.
Interestingly, Parliament will resume next week to seek to approve the biggest ever loan so far contracted by any government of the republic, US$1.8 billion for the total construction of the same Eastern Corridor by the Chinese! The cost of road construction has over the last two years shot up by a whopping 55% in some cases!
The acquisition of these over inflated loans smacks of grand corruption and will certainly lead this country back to HIPC, if this is not checked.
President Mills is complaining about not having money to complete major road projects started by the previous government. If he continues to spend Ghana’s precious money on new contracts with inflated costs then that Better Ghana he promised is bound to happen in the bank accounts of the selected few, while the vast majority of Ghanaians get poorer and our roads get poorer.
Incompetence and corruption are the worst mix that any government must have. Sadly, the NDC appears to be enjoying this record it has.