2bn dollars Sinohydro deal not loan agreement – IMF

2bn dollars Sinohydro deal not loan agreement – IMF

The International Monetary Fund (IMF) has quashed claims that the $2 billion Sinohydro deal is a loan granted to Ghana.

This comes after members of the Minority in Parliament wrote to the IMF and the World Bank to demand some clarity on the controversial agreement.

The Minority held that the Master Project Support Agreement (MPSA) was illegal, calling on both the World Bank and IMF to stop the deal.

2bn dollar Sinohydro deal not loan agreement – IMF

IMF managing director, Christine Lagarde

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Parliament, however, went ahead to approve the $2 billion MPSA between the government and Sinohydro Corporation Limited of China for the construction of priority infrastructure projects in Ghana.

The objective of the agreement is to improve road infrastructure for enhanced intra-urban, regional and national road traffic flow and pursue rural electrification, affordable housing and fishing landing sites.

The agreement also stipulates that Sinohydro will implement various contracts for Ghana and the state will repay with refined bauxite (alumina/ aluminum).

This, the Minority described as a loan which is “illegal” and therefore wrote to the IMF and World Bank to have the agreement stopped.

But following its recent mission visit to Ghana, the IMF has explained that the $2 billion Sinohydro deal with Ghana is not a loan.

Accra-based Joy FM reports that this position of the IMF is based on Ghana's debt limits under the country's current programme with the IMF.

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A source at the IMF is quoted as saying “the timing and nature of the deferred payment agreement will be critical for the programme”.

The IMF argues that the deal must be well monitored and designed in a way that is consistent with government’s overall debt strategy and value for money.

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Source: Yen.com.gh

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