Parliament needs to scrutinise $15 billion Chinese loan – Dr Joe Abbey

Business

Economist Dr Joe Abbey is pushing for parliamentary scrutiny for the $15 billion package from China to ensure that the country actually secures the facility.

Dr. Abbey’s call has been influenced by the country’s inability to secure the entire $3 billion China Development Bank loan.

There were reports that facility was frozen because the Chinese government wanted Ghana to use its crude oil as collateral, which was not in original agreement.

Government is seeking to leverage Ghana’s natural resources, specifically bauxite, through its recent partnership with the Chinese government that saw the latter pledge to commit over $15 billion to Ghana’s economy.

According to the Economic Adviser to the Vice President, Dr. Gideon Boako, government through the agreement will construct bauxite refineries, which will generate enough income to settle the loan.

“Ghana told the government of China that we are not coming here for loans.  We also told them since our tax revenues are not quite enough to be able to raise the kind of money in the short-term, we want to form a strategic alliance with China and they agreed.

“We told them we have a lot of mineral resources so we want to build the railways along the lines of the mineral resources so that we can cart the bauxite and everything,” he said.

He further explained that “if we are able to get the bauxite out of the ground and we refine the bauxite, that alone is going to generate an export value around 460 billion dollars.” 

The $15 billion package according to the Vice President Dr Mahamadu Bawumia includes the remaining the 2 billion dollar CBD loan.

But renowned economist Dr Joe Abbey told JOYBUSINESS it’s critical that the scrutiny is done by Parliament for Ghanaians to know the real cost the economy.

Impact on public debt

Dr Joe Abbey has, however, downplayed any negative impact of the Chinese financial package to Ghana on the public debt stock.

There are fears that this could quadruple the debt stock, which has reached $127 billion as at April this year. This, the Economist believes the facility was arraigned in a way that would not inflate the public debt.

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