Home / BUSINESS NEWS / China Will Have Access To Ghana’s Mineral Revenue And Electricity Sales In Default Of 4 Loans – IMF

China Will Have Access To Ghana’s Mineral Revenue And Electricity Sales In Default Of 4 Loans – IMF

Spread the love

The International Monetary Fund (IMF), has revealed details about how Ghana’s four collateralized loans from China have exposed the country to losing parts of its mineral resource revenue in addition to electricity sales.

For Ghana, Chinese loans have been a reliable funding source four major projects since the year 2000. In two decades, Accra has racked up close to $5 billion from at least 41 Chinese loans.

After several years of near-unbridled borrowing, Ghana is now debt-trapped and wading through its worst economic crisis in a generation, with a current external debt portfolio exceeding $30 billion.

This loan agreement means in the event Ghana defaults on honouring its debt obligation, China has the right to use proceeds from Ghana’s oil, cocoa, bauxite or even the sales from electricity to settle the debt.

In a lot of debt negotiations taking place within the developing world, China appears to be the most important party at the negotiation table. Although it is the largest bilateral lender in the world, it is opaque about its lending policies and how it renegotiates with distressed customers.

According to the World Bank, the planet’s poorest countries faced $35 billion in debt-service payments to official and private sector creditors in 2022, of which 40% was due to China alone.

JoyNews’ checks show the West Africa nation has contracted at least 8 collateralized loans from China with different mineral resources as security against default. As at the end of 2022, Ghana owed China $1.9 billion out of which $619 million were collateralized loans.

 

MISSING: summary MISSING: current-rows.
2007 306 Bui Hydropower Project 400 MW (CL part; Total 749.6mn) Power Cocoa Exports
2012 75 Bui Hydropower Project 400MW Additional Finance Loan 1(Total 749.6mn) Power Cocoa Exports
2012 76 Bui Hydropower Project 400 MW Additional Finance Loan 2 (Total 749.6mn) Power Cocoa Exports
2013 850 Western Corridor Gas Infrastructure Project; Jubilee Oil Field Power Oil Exports
2013 150 Integrated National Security Communications Enhancement Network (ALPHA) Project – Phase I ICT Oil Exports
2019 186 Construction of Eleven Coastal Fishing Landing Sites Project Agriculture Oil Exports
2019 211 Accra Intelligent Traffic Management System and Road Completion Transport Oil Exports
2019 550 Construction/Rehabilitation of Selected Roads and Interchanges in Ghana- Phase 1 Transport Bauxite Exports

 

According to the Fund, Ghana’s collateralized debt as of the end of 2022, was entirely held by China, this corresponds to four loan agreements signed in 2007-18 that amount to US$619 million to finance infrastructure projects. These loans are collateralized against commodity production (cocoa, bauxite and oil) and electricity sales.

“Collateralized debt is any contracted or guaranteed debt that gives the creditor the rights over an asset or revenue stream that would allow it, if the borrower defaults on its payment obligations, to rely on the asset or revenue stream to secure repayment of the debt” the IMF stated.

 

The IMF has stressed that “statutory funds will not be allowed to collateralize revenue streams and issue debt. No objection certificates will not be issued to any statutory fund by the governing authority in this regard.”

The Fund has also requested that government provides corresponding loans/ derivatives for all encumbered assets used as collaterals.

 

 

 

THANK YOU for constantly reading stories on MyGhanaMedia.com,  news publishing website from Ghana. Kindly like, follow, comment and SHARE stories on all social media platforms for more entertaining updates!

 

Please subscribe to our YouTube channel :  https://youtube.com/@mgmtv113
 

 

Source:  MyJoyOnline.com

There are four types of content published on MyGhanaMedia.com daily: curated content; syndicated content; user-generated content; and original content.

 

 

Admission is still in progress… Get yourself trained in any of our programmes to become a professional healthcare practitioner. Apply now! visit: racoh.edu.gh

 

 

 

 

 

Send your news stories to myghanamedia@gmail.com and Chat with us via WhatsApp on +233 200818719

 

 

 

 

 

About Adwenpa-Hene

we publish on Entertainment, Sports, Politics, Lifestyle, and Technology. You can also follow Us on : YouTube Channel - My Ghana Media TV, Facebook - MyghanaMedia TV , Twitter - @MyGhanamedia2 & Instagram - My Ghana Media TV. Email Address: myghanamedia@gmail.com Contact Us: 0200818719

Check Also

VIDEO: Afua Asantewaa Kicks Off Second Attempt To Break Guinness World Record Sing-A-Thon At Kumasi Heroes Park

Spread the love A Ghanaian media personality, journalist, and entrepreneur, Afua Owusu Asantewaa Aduonum, better known …

x