Revisiting Ghana beyond aid: China’s engagement perspective

After what was like a logjam in an action movie, the Parliament of Ghana successfully performed the constitutional rite of passage for the commencement of the 8th Parliament of the 4th Republic. The prodigious event also paved the way for the swearing-in into office for the second time, His Excellency Nana Addo Dankwa Akufo-Addo, after being duly elected in the December 2020 polls.

In the first term of office, a broad array of policies were initiated among which is the grand vision of Ghana beyond aid. Observers were so engrossed by his grandiloquent speech that first introduced the vision during a joint press conference with the visiting French president, Emmanuel Macron, in December 2017.

The declaration was a bold commitment, by one of Africa’s finest presidents, to changing Africa’s quandary in emphatically sounding the caution that: Africans could hardly come forth with their own policies because of the aid provided by the donor countries which retrospectively, appears to have enormously occasioned Africa’s dependency on such foreign powers.

The conundrum seems not to be receiving the requisite panacea, hence, the call for African leaders and the citizenry to abandon the aid-dependent mentality and work towards transforming their countries through competitive engagements in trade, finance and investment with the international community.

As a beacon for Africa, steps have been taken to demonstrate the Ghana beyond aid mantra. First, in a speech delivered at the 73rd UN General Assembly, Nana Akufo-Addo pointedly affirmed that, Ghana beyond aid is also a vision for Africa beyond aid.

With an African zeal he explained to the teaming world leaders that Africans will be shouldering their responsibilities by building attractive societies and nations through innovation and hard work, especially for the sonorous youth of the continent.

Second, the Government of Ghana went ahead to produce the Ghana Beyond Aid Charter and Strategy Document. It explains the policy framework, implementation drive and proposed measures for the long haul.

To achieve such a zealous vision as a country, leadership must profoundly put into force actions that go far beyond the rhetorical elocution and briefs. Indeed, as a transformational effort, Akufo-Addo in the second term inaugural speech focused on six thematic areas of development for the coming years.

Within the expected achievement, infrastructure sticks out, spreading across all sectors and indicating deadlines for the case of roads and hospitals. One may ask how such could be related to Ghana beyond aid. The reality is that it does more than one could easily envisage.

To address the infrastructure deficit, Ghana like most other African countries, has in recent years reinforced relations with China. China on the other hand is readily determined, through the regional framework of the Forum for China Africa Cooperation (FOCAC) and bilateral cooperation, to appease Africa’s thirsting demands especially infrastructure.

This is dependably assuring as it widens Africa’s source of development finance to cover those sectors that other external funding may not be willing to venture into, and internally-generated funds not adequate enough to bankroll. That is not to say that China will be fulfilling without expected gains from Africa.

They, in turn, tap into the African countries’ raw materials and natural resources to meet China’s energy and industrial needs; secure African markets for China’s products; pave the way for Chinese companies, State corporations and individuals to advance businesses in Africa; and promote the Chinese culture, influence and model as a rising power.

The above-mentioned are not far apart from the attributes of the current grandest China-Ghana engagement deal – the Sinohydro. More so, Ghana in 2018 signed Eight Cooperation Agreements and Memoranda of Understanding that cemented the Sinohydro deal and China’s elephantine One Belt One Road as overarching cooperation areas.

Although in China’s broader engagement policy through the lenses of South-South cooperation they admit that it is a ‘win-win’ and ‘developing together’ model of interdependence, Ghana as an African actor may end up being a ‘bad winner’ and China continuing being a ‘good winner’.

In that respect, the very purpose of engaging with China to meet infrastructure and other economic needs to achieve Africa beyond aid may flatly be defeated. In fact, it may end up rendering the country even more vulnerable to aid. To make matters worse, the details of the cooperation agreements and funding reporting for specific projects are quite clandestine.

Aside from the likely threats from the broader engagement to achieve Ghana beyond aid, there are other financing related specificities that may be worrying albeit possible relevance for Ghana. China’s model is such that aid financing (concessional loans, zero-interest loans and sometimes grants) is lumped and delivered together with other non-aid and commercial loans.

This was typical of the type of funding for the Bui Dam. It is believed by the Chinese that, foreign aid is more of development cooperation than donor-recipient relations and as such, the aid is implemented together with investment, trading and economic infrastructure.

That seems like a flawless approach to achieving Ghana beyond aid, and it could be well utilized for that but pause for a moment. That same approach renders it difficult to differentiate between commercial financing and non-commercial financing, makes the whole package opaque and confusing to understand and, it is usually connected also with export credit lines where a specific mode of payment is done with Ghana’s resources. As in the case of the Bui Dam where for some extended period of time, Ghana pays aspect of the financing with cocoa exports to China at a determined price.

Again, the Ghana-Sinohydro deal for instance is a barter trade archetype that could possibly be the source funding for constructing most of the roads promised for this year – excellent for satisfying political promises and urgent needs on time. But how could the country be easily weaned off aid when we trade off the natural resources that could have fetched more income if managed without being tied to long-term financing arrangement with a foreign country?

Further, it remains quite puzzling when the so-called resource (bauxite)-for-infrastructure deal is also greased with about $42.7 million grant and $35.7 million debt forgiveness for infrastructure development, and donation of 100 vehicles to the Ghana police. I will not like to assume in this write up how such could be ironed out within a mixture of commercial funding and aid, but it seems to create the impression that aid packages are being employed to lure the country into avoidable huge deals.

Even though Ghana beyond aid cannot be viewed as a short-term agenda, an arrangement like the Sinohydro should be viewed more in the long-term and could pose a threat to the same.

Lastly, the big shots of the government connected to Chinese arrangements and deals should bear in mind that the Chinese financing including aid, are tied to Chinese goods and services. The financial assistance could help in facilitating economic development but probably the direct harm to local production, indigenous commerce and employment might be overwhelmingly negative to empowering citizens and local businesses to develop beyond aid.

Ghana beyond aid is a resplendent agenda not just for Ghana but also Africa as a regional bloc. The continent seems to be advancing measures like the African Continental Free Trade Area Agreement which might contribute towards economic strength to move beyond aid.

However, the ultimate modus operandi is the bilateral relations of the African countries with other foreign powers, herein China, since that defines to the larger extent the individual State actors’ interaction within the international system.

To Ghana, leadership is committed, at least at the basic level to rising beyond aid but at the same time, engagement with China is yet to be fine-tuned to the vision.

In a way, China’s presence is worthwhile but possessing its own unique characteristics, so the onus lies more on Ghana than on China in making sure that aid and financing do not just satisfy urgent demands but protects the country’s long-term vision of ‘an economy that is not dependent on charity and handouts’ yet could engage competitively with the rest of the world, even China, for a good win.

It is also important that leadership and policymakers draw lessons from previous experiences with foreign aid to henceforth engage efficaciously with China based on their model.