Ghana duped!: US$3bn CDB loan

• Posted on January 15, 2014
• by Nana Kwesi Coomson
• Comment

The Government of Ghana led by President John Dramani Mahama should brace itself for a potential diplomatic tug-of-war with its Chinese counterpart soon as the Chinese have schemed to heartlessly continue to bleed the nation’s already struggling kitty with demands for the payment of almost USD30m as commitment fees on the China Development Bank (CDB) USD3bn every year.

The First ever Sino-Ghanaian diplomatic wrangling was witnessed last year when the Ghanaian authorities made a foray on some Chinese illegal miners in the country, leading to the arrest and eventual deportation of scores of them back to their country of origin, China.

The Chinese government made a loud protestation to their Ghanaian counterpart over what they described as lack of a human face in the arrest and deportation of their nationals, although they could not support their activities, which were creating alarming environmental degradation in the West African country.

The CDB loan, which was targeted at the transformation of the Ghanaian infrastructure, has been in abeyance for almost three years after the consummation of the agreement.

The initial plan was for the Chinese to disburse the full amount in three years in three tranches, in some of the most productive areas of the Ghanaian national economy seen as one of the biggest in the West-African sub-region.

USD1bn was to go into the ambitious gas infrastructural sector and the remaining amount will basically go into agriculture, rail and port transportation.

However, since the signing of the final agreement, the Chinese have been able to disburse only USD600m to the Ghanaian government for the gas project which is under the control of the Ghana Gas company.

This was even after much protestations from the Ghanaian government which at some point had to endure a boycott of the project by Sinopec; the Chinese company in charge of the Atuabo gas project which when completed will make the West African nation self-sufficient in gas resources for economic growth and transformation.

The project would also ensure that the country becomes a net exporter of gas.

The remaining USD2.4bn is still in abeyance despite continuous appeals from the Ghanaian authorities.

However, the Government of Ghana, which is still reeling under a struggling economy with serious deterioration in the fundamentals since last year, still has to cough-out a staggering USD30m annually to pay the commitment fees to the Chinese in compliance with the clause that mandated the Ghanaian government to pay the said fees until the whole amount is fully disbursed.

So far, Ghana has paid a cumulative amount of about USD100m to the Chinese for the disbursement of a paltry USD600m, a situation described as not only absurd, but nauseating by many experts who spoke to this paper on condition of anonymity.

This amount includes other charges and fees apart from the commitment fees that are to be paid annually until the whole amount is fully disbursed.

Many experts The Al-Hajj spoke to over the weekend said the agreement is a sell-out, with the Ghanaian government at the receiving end of the Chinese manipulations and exploitative tendencies which is becoming prevalent in the developing world, making nonsense of the so-called South-South co-operation espoused by forbears of the developing countries including the first President of Ghana, Dr. Kwame Nkrumah and his cohorts in the Chinese communist set up.

“If the Chinese have through their delays cunningly got Ghana to pay about USD100m in three years on only USD600m, then how much would our struggling economy cough-out if and when the whole USD3bn is disbursed?” A technocrat from Ghana’s Ministry of Finance told this paper on condition of anonymity.

Many experts have also argued that if it has to take the Chinese almost three years to disburse only USD600m to even the most productive and profitable sectors of the economy, then it will take more years for the remaining amount to be disbursed since the other areas are not as lucrative as the gas sector and therefore does not provide enough incentive for any investment.

The Chinese government has earlier shrugged off numerous complaints from the Ghanaian authorities over the delay in the disbursement.

A Chinese diplomatic source told The Al-Hajj that the indecisiveness of the Ghanaian government then under the late President John Mills and now led by President Mahama and the fear of the viability of the other projects is what is causing the dithering from the Chinese in releasing the remaining amount.

Many in Africa have over the years been raising voices over the emerging exploitative tendencies of the Chinese in the developing world especially in Africa.

Many economists and political scientists have argued that China is moving at full throttle to equal or overtake the Western world in the wanton exploitation of the resources of African countries especially its natural resources to satisfy its almost insatiable appetite for growth and global dominance.

President Mahama recently complained to the visiting Chinese foreign minister, Mr. Yi Wang on the unending delay in the disbursement of the CDB loan and called on the Chinese government’s intervention on the matter.

But Mr. Yi Wang quickly sought an alibi and told the Ghanaian President to wait and face officials of the CDB themselves when they jet down in Ghana in the coming days.

-The Al-Hajj