The Member of Parliament for Cape Coast South, Kweku George Ricketts-Hagan, has refuted reports that the Minister for Finance, Ken Ofori-Atta, is in China to seek debt cancellation from the Chinese government.
According to him, Ofori-Atta is not in China for debt cancellation because a huge chunk of the debt Ghana owes the Chinese is in the form of natural resources, including bauxite, which was promised in the loan agreements signed.
Speaking in a CTV interview on Wednesda, the MP alleged that Ofori-Atta will tell the Chinese that Ghana does not have the technology to explore the bauxite it owes them and that, in exchange for more loans, they (the Chinese) should come and take charge of the mining.
He added that the Chinese government is the only entity in the world that is likely to loan Ghana money because, unlike other countries, the Chinese don’t care about internal happenings in a country, and they are only concerned about deals that will benefit them.
“China is the only country in the world at the moment that is likely to lend money to Ghana; the rest would not give us any money. This is because China takes independent decisions most of the time against the rest of the world. China does not interfere in the internal politics of a country; they don’t care whether the government in power is a bad one or not.
“China’s interest is in natural resources, so when you give them your resources, they will give you any amount of money you want. The bulk of the debt we owe China is actually from bauxite; we told them we would give them bauxite in the Sinohydro and other agreements.
“The time for the repayment of the debt to China is due, but the bauxite we are supposed to use to pay them has not been explored. So, in the long run, what will happen is that there will be a deal for the Chinese to come and explore the bauxite themselves, or he (Ofori-Atta) will ask them for more loans, which will mainly be for the exploration of the bauxite. This is what is going to happen, mark my words,” he said in Twi.
Ricketts-Hagan also said that the focus the government is placing on its debts to China is a “miss priority” because the value of the debt to China is far less than the value of the debt to capital markets which the government incurred through the issuance of Euro-bonds.
The MP added that the capital market debt is more critical because if it is not addressed, Ghana will continue to be downgraded internationally, which will further worsen the economic challenges the country is currently facing.
Finance Minister Ken Ofori-Atta left Accra for China on Sunday (March 19, 2023), according to Asaase Radio.
Ofori-Atta’s trip to Beijing is hinged on efforts to secure a deal for restructuring of Ghana’s bilateral debts with the Asian economic powerhouse.
Even though Ghana is seeking a US$3 billion facility from the International Monetary Fund (IMF), the need to restructure both domestic and external debts has been given as a key conditionality.
China is a key player relative to Ghana’s external debtors, holding about $1.7 billion of Ghana’s $5.5 billion bilateral debt.
According to the Ghana Business News portal, the specialized nature of their lending windows means that Ghana cannot add them to the model used to negotiate with the G20 and the Paris Club members.
Talks with China were originally slated for mid-February but they were postponed to late March 2023.
