China To Take Over Ghana’s Mineral Revenue And Electricity Sales In Default Of 4 Loans, Says IMF Report
- A report by the IMF on Ghana's external debts shows that should Ghana fail to honour obligations under the loan agreement with China, it could lose revenue from its mineral resource and electricity sales
- Details of Ghana's collateralised loans from China show that the Asian country could have the right to use proceeds from Ghana’s oil, cocoa, bauxite or even the sales from electricity to settle the debt
- China owns about two-thirds of all of Ghana's external loans, making the Asian superpower an important party in discussions about Ghana's loans
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The International Monetary Fund (IMF) has published details on Ghana’s four collateralised Chinese loans in a report compiled in connection with the $3 billion bailout programme.
The report shows that should Ghana fail to honour obligations under the loan agreement with the Asian economic superpower, it could lose revenue from its mineral resource and electricity sales.
According to the report by Joy News, in about 20 years, Ghana has borrowed close to $5 billion from at least 41 Chinese loan facilities.
China could take over Ghana’s mineral revenue and electricity sales
Per data released by the IMF, should Ghana default in paying the loans contracted from China, China would have the right to use proceeds from Ghana’s oil, cocoa, bauxite or even the sales from electricity to settle the debt.
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This is because Ghana contracted the loans by collateralising some eight national assets.
Ghana owes China $1.9 billion, but $619 million of this amount is collateralised.
China's aggressive terms over Uganda airport debt
A 2022 report by the South China Morning Post has disclosed that Uganda has once fallen victim to China's loan terms.
According to the report, the repayment terms on a $200 million loan to expand Uganda’s international airport forced the Ugandan government to repay its debt before funding public services.
"Under the loan from China’s Exim Bank to modernise the Entebbe airport, the Ugandan government is required to channel all revenue from the country’s only international airport into an account held jointly with the lender, according to the contract published Monday by AidData," reports the South China Morning Post.
Captain Smart mentions 4 state institutions China may take over if Ghana fails to pay back loans
Meanwhile, YEN.com.gh has reported in a previous story that outspoken TV personality Captain Smart predicted that Ghana could lose some critical national assets to China over a huge debt to the Asian country.
The outspoken journalist mentioned the Tema Harbour, Ghana Broadcasting Corporation (GBC), Kotoka International Airport (KIA) and the Electricity Company of Ghana (ECG) as the likely assets that Ghana could lose.
Ghana owes China billions of dollars, which represents about a third of all its foreign debts.
Captain Smart of Onua TV said a similar takeover of national assets by China has occurred in Uganda, Zambia and Sri Lanka.
Ofori-Atta visits China for debt support talks
YEN.com.gh reported that earlier this year, Ghana visited China for talks about its inability to honour debt obligations to the Asian giant.
Finance minister Ken Ofori-Atta said at the time that the visit to China was important because, amid Ghana's financial and economic challenges, China represents about a third of the $5.7 billion Ghana owes externally.
Ghana has already been granted the loan from the IMF. $600 million, which represents the first disbursement of the $3 billion loan, hit the accounts of the Bank of Ghana last week.
5 things Akufo-Addo has said about IMF bailout
Meanwhile, YEN.com.gh reported in a related story that President Nana Akufo-Addo spoke for the first time about the IMF bailout during a mammoth rally held in Kumawu in the Ashanti Region over the weekend.
According to him, it is not true that he mismanaged the economy and run to the IMF because 29 other countries have signed up for various programmes with the Fund.
He also promised that before he concludes the end of his tenure in 2024, he would have fulfilled all his promises to Ghanaians and put the economy in a much better shape.
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