Former deputy Finance Minister Cassiel Ato Forson has insisted the $2 billion China Synohydro agreement with government is a loan, not barter as has been justified by the vice President Dr. Mahamudu Bawumia.
In the ensuing controversy as to whether the trade of Ghana’s bauxite for $2 billion worth of infrastructure from the Chinese company, Sinohydro Corporation, amounts to a loan or barter trade, the Vice President, Dr. Bawumia intervened to provide clarity on the agreement.
Finance minister, Ken Ofori Atta, who first hinted parliament on the nature of the agreement during the Mid-Year Fiscal Policy Review of the 2018 Budget Statement to the Parliament on July 19 said “the agreement between the Government of Ghana and Sinohydro is a barter agreement, a new financing model for Ghana, hence will not add to the public debt”
The vice president also explained the government has by an Act of Parliament set up a holding company, the Ghana Integrated Aluminum Development Authority, which will enter into joint venture arrangements with potential mining and aluminum refinery companies of its choice.
“Sinohydro will be providing the infrastructure but Ghana will choose its own partner to set up the Integrated Aluminum Development Industry in Ghana,” he clarified and explained further that the refined bauxite will be sold and the proceeds used to settle the $2 billion.
“After mining and refining, the government of Ghana will then use her share of the refined bauxite to pay off whatever cost of the infrastructure provided by Sinohydro Corporation after a period of three years”, he said.
Despite these explanations, Ato Forson argues that the deal in all its aspects has the same properties as “the petroleum-based CDB loan arrangement for the gas infrastructure” which was entered to by the erstwhile NDC administration for the construction of gas infrastructure.
In his view, the government is simply engaging in a game of double-standards “since the NPP vociferously rejected this structure while in opposition.”
The minority in Parliament has been hard on the agreement since its inception insisting it is a loan arrangement and not a barter trade but the government will not budge.
Minority accuses gov’t of “illegality”; insists Sinohydro deal is not barter In their agitation, the minority has written to the International Monetary Fund (IMF) country director in Ghana requesting for clarity on the deal.
The IMF begged for more time to get back to the minority on the matter saying the transaction is complex in nature so their request has been forwarded to the IMF headquarters for scrutiny.