$2bn bauxite deal projects need parliamentary approval – IMANI

BUSINESS GENERAL NEWS

Policy think tank, IMANI Africa, wants government to submit the over 50 projects under the $2 billion Sinohydro project to Parliament for approval separately.

Before Parliament went on recess, the House passed the Master Support Project Agreement covering the deal which offers 2 billion dollars’ worth of projects in exchange for processed bauxite.

The President on a state visit to China recently finalized the agreement, but according to the President of IMANI, Franklin Cudjoe, the nature of the deal requires a separate engineering, procurement and construction agreement for each project approved by Parliament.

Gov’t has no ‘contingency plan for risky’ $2bn bauxite deal

IMANI had earlier accused government of not having a contingency plan for the $2 billion deal.

In a seven-page critique of the agreement, IMANI said the government had no contingency plan to finance its obligations to the deal especially when the move to put up a refinery plant to process bauxite is not operationalized in time as expected.

According to the think tank, any hitch to the agreement may leave the country with abandoned projects or judgment debts.

“Without rigorous attention to every detail, Ghanaian leaders risk bungling these projects (as happened in the past and is happening in other African countries) and Ghanaian citizens would be left carrying the can,” IMANI warned.

IMANI further observed that the lack of a contingency liquidity plan “is exposing Ghana to considerable financial risk in this whole project.”

“We may wake up at some point to discover that unless we are willing to tolerate partially abandoned projects or judgment debts, we must activate the advanced payment clause in the master project support agreement (MPSA) for “early work” and thus commit to pay substantial sums to properly prosecute any part of our responsibilities under the foregoing agreement.”

Background

The government has sealed an agreement with the Chinese government to sell Ghana’s bauxite to China’s Sinohydro Group Limited and in return receive $2 billion to undertake infrastructural projects in the country.

The agreement among others will fund the infrastructure projects in Ghana, including roads, bridges, interchanges, hospitals, housing, railway development as well as rural electrification.

Critics say the agreement must be reviewed because it is not in the interest o Ghana and would instead add up to Ghana’s debt stock, a claim government had rejected.

Stop the confusion; $2bn bauxite deal is a loan – Minority insists

The Minority in Parliament had written to the International Monetary Fund over the issue.

According to the Minority, the $2 billion bauxite deal is a loan despite attempts by the government to make Ghanaians believe it is a barter arrangement that would not bloat the country’s debt stock.

According to the Minority, the agreement is similar to the $3 billion petroleum-based China Development Bank (CDB) loan agreement the country went for when it wanted to build its gas infrastructure.

 

Source: citinewsroom.com

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