Bauxite agreement with China is barter, not a loan – Akufo-Addo

• Posted on September 7, 2018
• by Ellsamwise King
• Comment

President Nana Akufo-Addo has defended his government’s bauxite deal with China describing it as a good one.

He insisted that the deal is a barter arrangement and not a loan as has been reported.

Addressing the Ghanaian Community in Kigali, Rwanda, President Akufo-Addo said his five-day trip to China was very successful.

“What we did in China is to sign a two billion dollar agreement to build our infrastructure with bauxite.’’

President Akufo-Addo added that “it’s a barter arrangement which means we will export refined bauxite to China without it being added to our debt stock.’’

The Minority in Parliament had written to the International Monetary Fund ( IMF) to ask whether a $2 billion Chinese deal agreed by the government in exchange for bauxite will add to the country’s debt stock.

But a reply from the Ghana office of the IMF says the issue is complex and will be discussed at its review meeting next month.

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

President Nana Akufo-Addo says “in the next three years, we will see massive infrastructure development in Ghana.’’

He added that “the successes or otherwise of this agreement will depend on us. If we apply it according to plan we will benefit from it, but if we fail to do what is right we will pay for it.”

China’s Sinohydro Group Limited is expected to provide $2 billion of infrastructure; including roads, bridges, interchanges, hospitals, housing, rural electrification, in exchange for Ghana’s refined bauxite.”

The Finance Minister has said the $2 billion of infrastructure to be provided by Sinohydro will not add to the debt stock, and will involve a moratorium period of three years to give Ghana the time to establish an aluminum refinery.

After the moratorium period, Ghana will fulfill its part of the barter agreement over another 12-year period.