General News of Thursday, 17 July 2014
Deputy Finance Minister, Cassiel Ato Forson has revealed that government will not cancel any of the projects which were supposed to be financed by the $3 billion China Development Bank (CDB) loan.
”…I can assure you that we have not cancelled any particular project; it’s about the fact that we have decided to change the source of financing,” he said. Finance Minister, Seth Terkper on Wednesday announced that government will present a request to Parliament to halve the CDB loan.
“Based on the advice from the Ministry of Finance and the Attorney General’s Department, Cabinet in June 2014, approved the government of Ghana’s capping of the facility at 1.5 billion U.S dollars and it has also recommended that the side agreements in their suitable forms should be brought to the House for consideration”, Mr Terkper told the Parliament.
The CDB loan agreement was signed by Ghana and China Development Bank in 2011, after the International Monetary Fund (IMF) increased the country’s commercial borrowing ceiling from $800 million to $3.4 billion in the same year.
But clarifying issues on Eyewitness News, the deputy Finance Minister explained that despite the capping of the loan agreement to half, all the projects will still continue.
“None of the project is going to suffer will find alternative sources of funding for them; I can confirm to you today that we have a different sources of financing that we will consider and take that to parliament and seek approval on that one,” he reiterated.
Mr. Ato Forson said the general public will be updated when the details of the new sources of financing the projects is ready.
The CDB loan facility was aimed at financing projects such as the ICT enhanced surveillance project for the western corridor oil and gas enclave project, the Sekondi Free Zone project, the Takoradi-Kumasi Western Corridor Infrastructure project, among others.
The delay in the release of the CDB loan by the Chinese government has been a source of concern for some economists who say the delay is due to government’s inability to meet the credit terms.
Franklin Cudjoe, Executive Director of IMANI, Ghana insists there is no way government will able to satisfy the credit requirements.
Responding to the decision by the Finance Ministry reduces the 3 million loan facility to half, Mr. Cudjoe said, “It is important for the ministry to eat humble pie; clearly speaking, this was not thought through.”