Ghana: Growing concerns over status of bauxite-for-infrastructure deal

By Eric Olander
Posted on Thursday, 30 September 2021 11:15

Ghanaian President Nana Akufo-Addo reviewing plans for the $2 billion bauxite for infrastructure deal with the Chinese state-owned company Sinohydro. Image via The Presidency of Ghana.

Three years after Ghana's bauxite-for-infrastructure deal with China, it seems that nothing has come from it.

A fierce debate broke out this week in Ghana over the status of the 2018 bauxite-for-infrastructure deal with China and the fact that three years later, not a single road has been built.

Opposition MP Cassiel Ato Forson, the ranking member on Parliament’s Finance Committee, blasted the deal and the government over the lack of any measurable progress in delivering the promised infrastructure.

Forson voiced his criticism during an interview on the nationally-broadcast TV show PM Express: “You pledged that the Chinese have agreed to give $2bn and you are saying that you’ve not been able to draw down a quarter of that kind of amount, in fact, as of December 2020, only about one per cent of the $2bn had been drawn down. If $100m has been drawn down, it still represents about five per cent of the total $2bn. So it doesn’t convince me that the Sinohydro project is ongoing.”

The government immediately responded to Forson’s charge with a simple message: don’t worry, everything’s under control.  “The commencement was in 2019, but other batches were in 2020,” said the Director of Special Projects and Investor Relations at the Vice President’s office in an interview Joy FM. “So the [road projects] are all at different stages of completion. The $100m you’re talking about, they are just one and half years into construction.”

This project has been controversial from the beginning, largely due to concerns about the impact that extensive bauxite mining would have in the Atewa Forest Reserve where millions depend on the region’s underground water supplies.

Background on the Ghanaian Bauxite for Infrastructure Deal

  • What’s at stake? The 2018 arrangement stipulates $2bn worth of infrastructure to be built by Sinohydro in exchange for a five per cent stake of the country’s bauxite reserves.
  • Barter or loan? The Ghanaian government contends the deal is more like a barter arrangement than a standard loan agreement. But, given that the price amount to be repaid could vary depending on the price of bauxite, some have argued that the deal includes considerably more risk than a standard barter transaction.

This article was first published in The China Africa Project. 

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