The Minority in Parliament is voicing concern over the $2 billion transaction between Ghana and Sinohydro, a Chinese hydropower engineering company.
The deal announced by the Minister of Finance, Ken Ofori Atta, was put in place to improve roads, minimize traffic and reduce road accidents. In exchange, Ghana would allow China access to the country’s refined bauxite.
In a statement obtained by Joy News, ranking member of Parliament’s finance committee and Minority spokesperson on finance, Cassiel Ato Forson, said that the agreement put before the House is inconsistent with what Finance Minister, Ken Ofori-Atta, announced during the Mid-Year Fiscal Policy Review in July.
In July, the Minister said: “I will like to assure this august House that the US$2 billion worth of infrastructure to be provided by Sinohydro would 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.”
But Forson says the barter agreement – approved by the Majority in Parliament – is not an agreement; it is a loan.
Read more: Parliament approves $2bn Ghana-Sinohydro infrastructure agreement
He referred to a section in the Constitution, which states that the Finance Minister must present any discrepancies in relation to:
1). “the granting of loans, their repayment and servicing,” and,
2). “the payment into the Consolidated Fund or other public fund of money derived from loans raised on institutions outside Ghana.”
“We will gladly want to draw the attention of the Honorable Minister to the fact that his so-called barter agreement is a loan and must be treated as such. Hence, he will be engaging in an illegality if he attempts to do otherwise,” the statement reads.
The statement further finds that the deal between Ghana and Sinohydro is more of a “buyer’s credit,” because the joint memorandum delivered to Parliament on the deal refers to a “deferred payment agreement,” making it a loan and not a barter agreement.
“We are of the view that the Hon. Minister cannot unilaterally decide to take the “so-called” barter agreement off the public debt.”
The Ministry argues, though, that “no revenues or resources will be encumbered as a result of the [Sinohydro] arrangement.
According to the World Bank, Ghana invests roughly $1.2 billion on infrastructure. To meet the country’s infrastructure deficit, the $1.5 billion will be required over the next 10 years, says a 2015 Africa Infrastructure Diagnostic Report.
The agreement, the Minister said, would leverage the country’s natural resources and create a new and improved infrastructure strategy.