Ghana’s opposition on why it blocked Chinese loan

By Lawrence Quartey
Posted on Wednesday, 28 September 2011 16:53

Ghana’s main opposition party says it did not support a US$3 billion Chinese loan in parliament because it felt the West African would be shortchanged by the agreement.

The New Patriotic Party (NPP) said it abstained from approving what could have been the largest single loan agreement ever to be signed by Ghana because the National Democratic Congress (NDC)-led government under President Evans Atta Mills refused to listen to critical issues it raised that will help to ensure value for money.

NPP said if the loan agreement had been approved it would have violated provisions of a Petroleum Revenue Management Act 2011.

It said it would have meant going against the International Monetary Fund (IMF) condition that put a ceiling to Ghana’s borrowing at US$800 million.

“It is a violation of the IMF conditionality, which the National Democratic Congress (NDC) government has agreed to be imposed on us,” the NNP minority spokesperson on Finance Osei Akoto said.

Akoto said the actual cost of the projects to be financed by the loan was $3.25 billion, but government was expected to provide 15 percent of the funding.

“In the event there is going to be excess funding of $200 million which is not accounted for anywhere, the loan document does not mention it, the Cabinet memo does not mention it and the majority side of the Finance Committee did not address itself to it in its haste to do the bidding of the executive,” he said.

He said in less than three years of President Atta Mills’ rule, Ghana’s debt had increased to $15.9 billion.

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