NPP REJECTED $3BN CHINESE LOAN

….You Remember 2011?

…. As they boycotted a vote on the facility in Parliament, accusing the Mills Gov’t of not doing due diligence   

 Vice President Mahamudu Bawumia’s announcement of the Chinese government’s agreement to release the remainder of a $3billion loan that it had promised to advance to Ghana in 2011 has been bereft of the opportunity cost to the country.

However, already, flak seems to be in order for the New Patriotic Party (NPP) government, because these same people, who are ready to roll out the red carpet for China in exchange for the remainder of the loan, voted against the same loan in the past.

In September 2011, when the erstwhile National Democratic Congress (NDC) government, led by President John Evans Atta Mills, entered into the $3 billion master facility loan agreement with China, the NPP loudly resisted it.

As part of the resistance, the party, which was then in opposition, got its MPs in the Minority, to vote with their feet, when the loan agreement was tabled before Parliament for approval. It took only the votes of the Majority side, composed of the NDC, to pass the agreement.

Vice President Bawumia’s gushy announcement of China’s agreement to release the remainder of the same loan, some five years after the NPP had resisted the same facility, therefore, depicts the NPP as inconsistent in its position on the loan.

In 2011, the China EXIM Bank committed to advance $3billion to the Atta Mills Government in exchange for Ghana committing to supplying, as collateral security, 13,000 barrels of crude oil per day up to 2027.

Government had intended to use the loan facility to fund projects, including the Eastern Corridor Multi-Modal Transportation, the Accra Metropolitan ICT Enhanced Traffic Management Project, and aspects of the Nsawam road, the Dodowa road and the La Beach road.

However, the NPP, which was then in opposition, took a stance against the loan facility, eventually boycotting a vote on the facility in Parliament in August of 2011.

The NPP would later hold a press conference and present a litany of reasons, including supposed concerns about annual Budget Funding Amount, for its decision to boycott the vote.

“The annual Budget Funding Amount may be used as collateral for debts and other liabilities of government for a period of not more than ten years after the commencement of this Act,” Dr. Anthony Akoto Osei, who was then the Minority Spokesperson on Finance, had said.

Dr. Osei, who is now the Minister for Monitoring and Evaluation, accused the Mills government of not doing due diligence before going in for the loan.

According to him, a proper totalling of the cost of the projects to be financed with the loan had been $3.25billion, but government had been expected to provide 15 percent counterpart funding, which translated to $450million making the total resource available to $3.45billion.

He had questioned what the $200million would be used for, insinuating that it was “a hidden booty.”

Dr. Akoto Osei had also indicated that a commitment fee of one percent amounted to $30million in the loan agreement brought before Parliament, which he said was on the undrawn balance (the balance of the loan that remains in the account of the Chinese Bank).

“Another source of concern for the Minority is the country’s current agreement with the IMF and the World Bank which precludes the country from borrowing more than $800million non-concessional loan,” Dr. Akoto Osei had said.

In spite of the boycott by the Minority and all the reasons to justify what most Ghanaians at the time had viewed as sabotage by the NPP, the Master Facility Agreement (MFA) on the loan was signed on December 16, 2011.

The signing had been done after the Board of the International Monetary Fund (IMF) had approved an enhancement of Ghana’s commercial borrowing ceiling for 2011 from US$$800million to US$3.4billion on December 14, 2011.

After the Parliamentary approval, however, the Chinese advanced only $1billion to Ghana and then stopped disbursal of the remaining $2billion, saying that the deal was not fair to them.

Government’s commitment to supply, as collateral security, 13,000 barrels per day of crude oil up to 2027, according to the Chinese, did not favor them because of slump in petroleum prices on the world market.

Even so, the NPP did not relent in its pedantic position on the $3billion Chinese loan.

In the build-up to the 2016 elections, current Energy Minister, Boakye Agyarko, denounced the Mahama government’s proposal to export natural gas to be processed by the Ghana Gas processing plant at Atuabo, from 2018, to China.

Estimated at the value of $1.5billion, then Finance Minister, Seth Terkper, had explained that the export which was to be done over 19 years was to come from only one of Ghana’s three natural gas fields, but the NPP’s Agyarko had slammed the proposal as an irresponsible mortgage of Ghana’s future.

Just some six months into the aftermath of the 2016 elections and the same New Patriotic Party which resisted the $3billion Chinese loan agreement in 2011, is celebrating the reactivation of the same loan.

Upon returning from a four-day visit to China, Vice President Mahamudu Bawumia announced: “Under the previous government, there was a $3billion master facility that was given to the government. $1billion or so was disbursed for the Atuabo Gas Plant but the remaining $2billion or so was frozen for certain reasons.

“We were able to successfully discuss and address some of the concerns and they have agreed to technically unfreeze that amount.”

The announcement was totally bereft of revelations of the offers that Dr. Bawumia used to seduce the Chinese into reactivating the loan facility, giving the impression that the conditions that the predecessor NDC administration acquiesced to are the same conditions that attach to the remainder of the loan.

The NPP Minority in Parliament boycotted the approval of the loan under these same conditions, by Parliament, in 2011.

 

Source: therepublicnewsonline.com/Fiifi Samuels

The Republic News Online

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